A network of 135 hospitals working with a UnitedHealth subsidiary guarantees purchases from Medtronic, Abbott, and gets big discounts.
UnitedHealth Group Inc.’s SharedClarity subsidiary has promised that its 135-hospital network will buy the vast majority of its heart stents from devicemakers Medtronic Inc. and Abbott Laboratories in exchange for big discounts on product costs.
The three-year deal is the first announced in the Minnetonka-based insurance giant’s attempt to combine effectiveness with affordability in the use of common medical devices.
Two types of heart stents are the first of 30 popular devices that SharedClarity plans to test, looking for the best brand. That brand would then be required for use among its member organizations.
SharedClarity was formed by three large U.S. hospital systems and UnitedHealth, the nation’s largest insurer. The venture aims to conduct independent studies on the long-term effectiveness of medical devices designed for everything from heart problems to bad knees and hips.
Companies that get SharedClarity’s blessing for their brands could enjoy benefits well beyond the 135-hospital network, SharedClarity President Mark West said in an interview. The preferred brands may eventually work their way into purchasing pools of facilities affiliated with UnitedHealth’s insurance arm, which is the country’s largest health insurer.
“I think we’ve been able to validate the model in this [Medtronic/Abbott] contract,” West explained.
While unwilling to specify exact percentages, West said SharedClarity’s hospitals have committed to buy a very high percentage of heart stents from Medtronic and Abbott. With a market guaranteed, the companies, in turn, cut their prices by “significant double-digit” amounts, West said.
In a statement released with the announcement of the stent contract, Fridley-based Medtronic said it is “pleased that the patients served by the SharedClarity member systems will receive this important treatment option.”
“Medtronic’s aim has always been to ensure that patients receive high-quality, clinically effective outcomes at the right cost,” Sean Salmon, president of Medtronic’s coronary and renal denervation group, said in the statement.
Heart stents, which are used to open clogged arteries, normally range in price from $500 for a bare-metal stent to $1,200 for a stent covered in a drug designed to stop regrowth of the blockage. The costs of stents are a relatively small part of the $18,000-$28,000 price of the procedure to implant them.
There were 644,240 heart stent procedures in 2009, with 484,530 involving the more expensive drug-coated stents, government records show. Saving hundreds of dollars per procedure adds up.
“The device manufacturers saw the value of working with us,” West said. “We were negotiating on behalf of many organizations. The other thing they valued was the growth opportunity.”
That growth could come in striking deals with thousands of health care providers in UnitedHealth’s vast insurance network, West said.
In launching SharedClarity in 2012, United aimed to independently measure the effectiveness of all kinds of medical devices without the potential bias that could come from industry-sponsored research.
The heart stents were an easy jumping-off point because Abbott and Medtronic lead the market for the devices. A clinical review team looked at the research about the two stentmakers’ products and also surveyed doctors practicing in SharedClarity hospitals. There was a consensus that the Medtronic and Abbott products worked effectively, West said.
“If there had been no consensus, the question of ‘why’ could have led us to a customized comparative effectiveness study,” he said.
West expects such customized studies to occur as SharedClarity pushes through its list of common devices targeted for analysis and possible cost reductions.
Up next for SharedClarity are stents used to open arteries in arms and legs, known as peripheral stents. The company also is analyzing dyes injected into the body for medical imaging.
Still to come are pacemakers and defibrillators, as well as artificial hips and knees.
“We have a high interest in getting costs reduced,” West said.
Jim Spencer • 202-383-6123