Home Heart Health News Pacemaker 'sales reps' present at heart surgeries, health insurer boss says

Pacemaker 'sales reps' present at heart surgeries, health insurer boss says

15 min read

Surgeons are performing heart procedures, such as pacemaker implants, with the help of health technicians who are employed by the device manufacturers and have sales targets, industry insiders have claimed.

Key points:

  • Medical technician says cardiac-device manufacturers regularly supply technicians to assist in implantation of their brand of pacemaker
  • Bupa's general manager says manufacturer-linked technicians with sales-based incentives are being used in operating theatres
  • Medical Technology Association of Australia says company reps in theatres "need to comply with Australian standards"

More whistleblowers from within the medical-device industry have come forward with concerns about the practices of device makers following an ABC investigation into secret payments linked to pacemaker purchases at private hospitals.

Dr Dwayne Crombie, general manager of Australia's largest health insurer, Bupa, has confirmed reports manufacturer-linked technicians with sales-based incentives are being used in theatres.

He said some of these individuals were technicians and some were "more at the sales rep end", and could be in a position to influence specialists' choices.

"We're told that many of those reps are almost incentivised on commission basis to get their products sold," Dr Crombie said.

"Having commissioned-based selling of products at that kind of close range to someone like a surgeon, I think it's inappropriate conduct."

One technician in the industry, who did not want to be identified, has told the ABC cardiac-device manufacturers regularly supply technicians to assist in the implantation of their company's brand of pacemaker.

He said the technicians were experts on their company's products and were considered best placed for this work.

They often worked regularly with the same doctors, he added, and established a relationship with those specialists.

However, the problem was they were also given sales targets for their company's particular device, he said.

The technician told the ABC device makers would then allow a surgeon to use that technician to assist in the next procedure on their operating list for the day, even if it didn't involve one of their devices.

"I couldn't understand how indemnity-wise this was legitimate," he said.

Karen Carey is a health consumer advocate who has had three pacemakers and a heart transplant.

She sits on the Medicare Benefits Schedule Review Taskforce and was a member of the group that recently reviewed the prices on the Federal Government's Prostheses List.

"What happens now is that the manufacturer is providing technicians into operating theatres to either give expert advice or to provide specific instruments," she said.

"That is equivalent to a rebate, both services are usually provided at no cost."

Ms Carey said it wasn't necessarily a bad thing for patients because of the expertise of the technicians.

"They're also providing significant expert advice, particularly with new devices," she said, but added the arrangement was not transparent.

"What we need is to identify all of those costs and to fund them appropriately."

Company reps 'need to meet standards'

The Medical Technology Association of Australia (MTAA) said technicians were an invaluable medical resource for surgeons and operating-theatre staff.

MTAA's chief executive, Ian Burgess, said he could not comment on suggestions the technicians had sales targets.

"The reality is that company representatives in theatre need to comply with the Australian College of Operating Room Nursing standards," he said.

"They need to be re-accredited every two years and show evidence of that training to the hospital before they can go into the theatre."

In a statement, the Australian Private Hospitals Association's chief executive, Michael Roff, said patients were asked if company representatives could be present in their surgery, and technicians were not involved in the actual operation.

"[The association] has never heard of an instance where a company representative has been present in a theatre when their product is not being used," Mr Roff said.

"Company representatives go through a process of credentialing or identification and a formal sign-in process."

Critics are also worried the practice extends beyond pacemakers and includes other implantable devices like hips, knees and replacements.

Industry concerns about 'up-selling'

Dr Crombie said his company, Bupa, was already over budget this year for its spending on prostheses claims and blamed it on "up-selling" practices.

He had expected his budget to drop after the Government last year reduced the official Prostheses List prices that private hospitals pay.

"It's unusual to see a trend quite like that, we hadn't seen that before," Dr Crombie said. "So clearly [device makers] are more successful at finding other ways to keep revenue up."

He said device companies had successfully applied to the Federal Government to have some devices moved up the Prostheses List schedule so they attracted a higher minimum price.

"They've reclassified some products that managed to get some more money on the [Prostheses List] schedule, and so the total cost to me, and ultimately to the customer, has actually gone up this year despite the fact we did get some savings," he said.

"We've also had a lot more utilisation from doctors and hospitals."

Ms Carey said she had first-hand experience of up-selling practices.

"[It's] giving a patient a premium device when a much cheaper device would have done the job adequately," she said.

"My mother, she was in her mid-80s, she had a pacemaker inserted for a very simple, slow heartbeat, and the cardiologist inserted a $35,000 device when a $10,000 device could have treated her absolutely adequately.

"The cardiologist said to my mother, 'We gave you the Rolls Royce there, you're very lucky'. So you had $25,000 that he's just totally wasted.

"I think it happens across a whole range of devices."

Up-selling claims 'fanciful'

Mr Burgess from the MTAA said claims of up-selling and Bupa's suggestion device makers might be making money on the updated Prostheses List were "fanciful".

He said there had been a 13 per cent reduction in benefits paid in the first quarter of 2018.

"That simply fails to understand the process whereby a doctor chooses what is the most appropriate device for his or her patient, and that is based on the clinical circumstances," he said.

"This year's private health insurance premiums were the lowest in 17 years.

"Those [Prostheses List] cuts are challenging for the industry, they hamper our industry's ability to invest in research and development and they have resulted in job losses."

Dr Crombie said he believed the current system of having a fixed price on the Prostheses List was "weird", and they would support a system similar to the Pharmaceutical Benefits Scheme (PBS), where manufacturers put in commercial submissions or tenders.

He said it wasn't just a case of health insurers crying poor.

"Medical technology companies all do pretty well, if you look globally," Dr Crombie said. "If the price of a product isn't commercially sensible, the person who bears the pain is ultimately the consumer."

Secret pacemaker payments

It comes after an ABC investigation found private hospitals and clinics were getting between 5 and 50 per cent of the value of the devices as rebate payments in cash, or in-kind, for using a particular company's brand.

Under one agreement, a clinic attracted rebates of up to 50 per cent for purchases that added up to more than $3 million.

Legal experts and industry insiders said this payment was better described as a kickback, could be costing the health system millions, inflating insurance premiums, and ultimately impacting on public-hospital patients.

Mr Burgess said the medical-device industry supported a price-disclosure model and a government working group was looking at options.

"If we move to a tendering system that would simply constrain their choice and doctors would be forced to use a limited range of products," he said.

Mr Roff, from the Australian Private Hospitals Association, said a price-disclosure system was an option "worthy of examination".

"However, the development costs and lifespan of medical devices is different to pharmaceuticals, so it would need to be a modified system."

A spokesman for Health Minister Greg Hunt said a new taskforce comprising of consumer representatives, private-health insurers and device manufacturers, had been established by the Government to investigate ways to deliver further price reductions to patients, price referencing and price disclosure.

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