The Temptation of a Single Vendor Cardiac Device Contract

Dear Readers,

There is increasing pressure on hospitals to reduce supply costs. Due to their high cost, implantable cardiac devices are frequently targeted by hospital administrators. Because hospitals recognize that pacemaker and defibrillator companies will offer significant cost savings when promised a high proportion of the institutional business, it is common for administrators to offer an exclusive contract, or at least a high percentage commitment to a single vendor.

Although it might make sense for a small hospital with few implanting physicians to sign an exclusive contract with a device company, there are several reasons why such an approach would have a negative impact on most medical centers.

1. Unique Products for Individual Patients. Although most implanting physicians, and even vendors, would agree that pacemakers and defibrillators have become more of a commodity over the past twenty years, important differences remain between devices and programmers. There are some devices that are unique and only offered by one of the major vendors. For example, Medtronic is the only company that currently has an FDA-approved, MRI-compatible pacemaker. There are also advantages at the time of generator replacement to stay with the same company. Therefore, a hospital with an exclusive contract would have difficulty guaranteeing that each patient receives what is the most appropriate device for that patient.
2. Product Recalls and Patient Risk Mitigation. One of the most important reasons not to use the same company for all cardiac devices is the inevitable problem of a large-scale product recall. The Sprint Fidelis defibrillator lead recall is just one example of why a hospital should not put all of their eggs in one basket. It is better to spread the risk of device problems throughout a large patient population by using various companies. Some companies have even had to halt shipment and pull hospital inventory because of quality concerns. It would be very difficult for a hospital with an exclusive contract to manage a situation where the sole company with whom the contract is held is suddenly unable to provide product.
3. Competition and Support. Device company representatives are invaluable during device implantation and follow-up. They provide a mobile inventory and a wealth of advice. Competition between companies creates a healthy environment that promotes reliable service.
4. Discretionary Product Billing. Judgment calls are made periodically by a device representative regarding whether or not to charge the hospital for something opened but not implanted. For example, during a cardiac resynchronization therapy device implant, the initially selected coronary sinus lead sometimes cannot be implanted because of the patient’s anatomy. A second, or even third, coronary sinus lead must then be opened to achieve a successful result. A representative from a company with no competition may be more likely to charge the hospital for those additional leads that were not implanted.
5. Physician Preference. Many physicians have developed his or her own device preferences, beginning during fellowship training. When problems occur at the time of implantation, or at the time of device troubleshooting during follow-up, the importance of an individual physician’s experience with the devices and programmer of a particular company cannot be underestimated.
6. Device Clinic Staff Preference. The preferences of the nurses and staff in the device clinic can be as important as the preferences of the implanting physician. Familiarity of the device programmers and remote monitoring systems by those who manage the patients in the device clinic is critical to quality and efficiency of care.

7. Clinical Trials. Clinical research and discovery are missions of academic medical centers and many non-teaching hospitals. A working relationship with a company is important when site selections are made for research studies evaluating new technology.
8. Support for Training Programs. Many academic medical centers do not provide financial support for their Clinical Cardiac Electrophysiology Fellowship training programs. In spite of increasing scrutiny of physician relationships with industry, these same hospitals often permit industry sponsorship of fellowship training. Although there should never be a quid pro quo, it seems very unlikely a company with no relationship with a hospital would be supportive of its training programs. Companies are also a source of incomparable fellowship educational programs and simulation laboratories.
9. Trainee Experience. It would be a great disadvantage to an EP fellow to be exposed to only a subset of the products available for patients with heart rhythm disorders. It is important for any heart rhythm specialist to be familiar with the device programmer of all of the major device manufacturers in order to effectively troubleshoot device problems and take care of patients.
10. Physician Autonomy. As hospitals continue to usurp the decision making authority of physicians, the ultimate losers will be patients. Hospitals that have tried to use hospital contracts to prevent physicians from using a product that he or she thinks is in the best interest of the patient have historically lost in the court of law.

It is tempting for hospitals to offer an exclusive contract, or award a very high percentage of their business, to a particular cardiac device company in an effort to reduce supply costs. However, this is short sighted. Implantable pacemakers and defibrillators are unique to medicine. They are the only totally implantable, life-sustaining devices that require regular interrogation, monitoring, and reprogramming over years, sometimes decades, after implantation. Physicians must retain their ability to select whichever device they consider the most appropriate for an individual patient and to have access to all of the major vendors.