Hospitals Set Supply Cost-Cutting Targets, Push Physicians to Change Behavior

Patients with a new cardiac pacemaker have an advantage over patients who have received standard pacemakers: they can undergo MRI scans as a part of their care without the risk of adverse events.

But the new device costs hospitals $1,300 to $3,000 more than a traditional pacemaker and could cut into a hospital's margin because Medicare and other insurers pay the same rate for implanting MRI-compatible pacemakers as they pay for the standard pacemakers. From a clinical perspective, physicians are put in the position of having to predict which patients are likely to need an MRI and should receive the new pacemaker.

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Source: Modern Healthcare

It's one of many supply-chain decisions hospital administrators have to make where they must weigh the benefits of a new technology—such as the fact that the new pacemaker doesn't improve immediate outcomes for the patient but may have additional benefits in the long term—against its higher costs.