What is the Value of a Hospital Value Analysis Committee?

Bradley P. Knight, MD, FACC, FHRS, Editor-in-Chief

Bradley P. Knight, MD, FACC, FHRS, Editor-in-Chief


Many hospitals now have formal committees to evaluate new technology acquisitions. Members of these committees are typically the director of the hospital supply chain, physicians, and other administrators. The committees have names such as the “Value Analysis Committee (VAC),” “Technology Assessment Committee,” or “Executive Medical Device and Product Committee.” In some ways, these committees are similar to Pharmacy and Therapeutics (P&T) Committees that hospitals have traditionally used for years to determine which commercially available medications should be on the hospital formulary. Unfortunately, not all medical devices including pacemakers and defibrillators are best vetted using this type of process. Instead of improving patient care, the process becomes yet another barrier and source of delay between commercial availability of an approved medical device and access by physicians who feel it is in the best interest of their patients. Below are some of the false arguments commonly posed to justify the existence and influence of these Value Analysis Device Committees.

  1. Patient Safety. Hospitals argue that the main goal of these device committees is to evaluate and mitigate patient risk. They argue that FDA approval is a necessary but insufficient step, and that local issues must be considered before determining that a product is safe in a particular hospital setting. Unfortunately, safety is not a valid argument. A group of administrators should not be in a position to determine whether or not a complex device such as a new implantable defibrillator should be available at a particular hospital for one simple reason — virtually no one at any hospital is qualified to determine the safety of a cardiac implantable electronic device (CIED). Only the FDA has the information and expertise to do that. There is nothing provincial about the safety of a CIED. The main safety role of a hospital as it relates to a new device is to monitor outcomes and report any safety issues to the FDA. The FDA is then responsible for making decisions regarding product safety and post-approval recalls. The physician using the device, with his or her team, is responsible for physician training and must work with the hospital to train hospital staff to use the device safely and appropriately. This is not the role of the Purchasing Department.
  2. Device Efficacy. Again, only the FDA can determine the efficacy of most devices used in hospitals, particularly a novel CIED. The efficacy of a pacemaker is not geographically dependent.
  3. Better Ability to Manage Recalls. Hospitals point to the fact that hundreds of products that have been approved by the FDA have been subsequently recalled and that a committee-based approval process allows the hospital to be better positioned in the event of a recall. This is invalid. At most hospitals, devices are sold on a consignment basis where industry representatives maintain their own inventory and bring products to the hospital at the time of implant. The hospital has no role in managing a recall of a pacemaker or defibrillator, unless the hospital actually maintains its own CIED inventory. If a new defibrillator, for example, were to be recalled by the FDA, the burden and responsibility of identifying and notifying and managing patients would fall entirely on the physicians and their outpatient clinic staff. In fact, the only role the hospital would have in the event of a recalled CIED would be to generate revenue on any procedures these patients might need.
  4. Transparency. It is not clear how a device committee enhances transparency. The hospital is already involved in the protracted contracting process for new medical devices, and therefore, should be well aware of any new device acquisitions.
  5. Positive Experience. The fact that the committee members enjoy having a conversation with the requestors on new products and evaluation of the benefits that they bring forward is not a justification of the process. There are far better educational venues for committee members to hear about progress in the medical device industry. 
  6. Impartiality. It has been argued that those making decisions regarding the hospital purchase of a new device must be independent and impartial. Unfortunately, the gains of impartiality in this situation are more than lost by the fact that the committee members are not experts in most of the topics presented to them. The decision-making process for CIEDs should be driven by those who have expertise in the field.
  7. Cost Control. It is important that hospitals acknowledge that the sole reason for a hospital Value Analysis Device Committee is to control costs. Anything else is disingenuous. It is not that cost control is not an important goal; it is just that honesty and openness are critical to a successful partnership between hospitals and physicians. Let’s just be honest about it. Physicians understand that value assessment and cost control are important goals, but there are better ways for hospitals to work with physicians to control costs related to EP lab supplies. Beyond the issue of acknowledging that cost is the real driver is the issue of how costs are actually determined. A supply chain committee typically looks at the cost of a new device from the narrow perspective of how that device will impact the supply budget. A more legitimate cost analysis is to consider how a new device will impact the finances of the institution, and perhaps even more broadly, the costs to society. For example, a novel device like a left atrial appendage occlusion device could dramatically increase hospital supply costs, but if the new procedure generates new referrals and revenue, the net financial effect might be positive. A different type of example would be a pacemaker that has a slightly higher sticker price, but has twice the battery longevity. The small additional cost might lead to a marked reduction in long-term costs to the patient and society. A Supply Chain Committee that evaluates only the cost of the device and its direct impact on the supply chain budget, without considering other related financial aspects, is working in a vacuum.

Over the past five years, in an effort to reduce supply costs, most hospitals have begun exerting greater influence on their device procurement process by establishing formalized Value Analysis Device Committees that evaluate new technology acquisitions. There is even an online magazine called Healthcare Value Analysis and Utilization Magazine (www.valueanalysismagazine.com). Such committees are making critical decisions about which new devices are available “on formulary” at each hospital, creating additional obstacles, more bureaucracy, and time delays. This approach might be reasonable when a hospital is evaluating an item that is associated with higher costs and would be used widely throughout the hospital, such as an antibiotic impregnated dressing for central venous catheters. However, this approach is inappropriate for the evaluation of some new products, such as an MRI-compatible defibrillator that is associated with a small cost premium. For starters, these committees are absolutely not qualified to determine the safety and efficacy of a new pacemaker or defibrillator. These committees need to stop using safety and efficacy as their justification for the process. A better system would be for physicians who are experts in their field to be given decision-making authority in the hospital regarding new technology acquisitions, after putting them in a position to work proactively with their service line leadership, using predetermined budget constraints and a transparent financial framework.