Medical Device Reps in OR Sway Healthcare Supply Chain Costs

August 25, 2016 - Medical device sales representatives may act as key resources for surgeons on the latest technological advances and how to properly use specific devices, but the close relationship may actually be driving up healthcare supply chain costs, according to a recent study in PLOS ONE.

“While surgeons view themselves as indisputably in charge, device reps work hard to make themselves unobtrusively indispensable in order to establish and maintain influence, and to imbue the products they provide with personalized services that foster a surgeon's loyalty to the reps and their companies,” wrote the authors of the study.

Medical device representatives influence what type of products hospitals purchase through marketing strategies and drive surgeon preferences for specific devices regardless of price, the study stated. Hospitals are also unlikely to stymie the impact of vendor representatives as long as surgeons rely on them for device training.

The study explained that the role of medical device representatives in the operating room has increased in the past decade. While healthcare supply chain management staff are responsible for stocking medical devices, previous studies have shown that the presence of sales representatives in laboratories over a year led to more use of the respective vendor’s products, causing higher procedural costs.

Another study, researchers reported, also found that around 61 percent of healthcare supply chain costs are spent on physician preference items. By developing brand loyalty among surgeons, vendor representatives can influence a provider’s preferences for certain products regardless of competitor prices.

Medical device companies work to boost brand loyalty by financially incentivizing providers through payments for food and beverage, travel expenses, and attending lectures, stated the study. A loss of these payments can cause providers to transfer up to seven percent of their device utilization from a sponsoring firm to a competing company, according to a cited report.

Researchers reported that relationship between medical device representatives and surgeons is especially influential compared to other providers because of the level of support surgeons need from vendors.

Out of the surgeons involved in the study, most agreed that a medical device representative was always present in the operating room and he preceded the surgeon into the operating room to ensure that the device’s equipment was ready. Some surgeons even reported that medical assistants were required to send surgical schedules to vendor representatives to guarantee that they could attend surgeries.

“This is one of the reasons why, currently, you need a rep in the operating room,” a participant said. “Who’s to say who else will know when we get to surgery in the morning whether you're opening the right implants, or whether you're opening the right trays?…It's useful to have somebody else in the room whose specific job is to have that information on hand always.”

Medical device representatives also assess and access hospital stocks as well as bring their company’s resources to help surgeons prepare and carry out surgeries involving medical devices. Some representatives said they attended surgeries to field any questions that surgeons may have, while others reported that they provide step-by-step assistance. The vendor employees also stated that they attended at least one surgery per day and were regularly on call for assistance.

“The rep is another set of eyes,” reported a participant in the study. “They know the system and the trays—and when you’re not worried, that helps you focus on the patient more because you know what’s coming into your hand is the right next step.”

However, the important role of the medical device representative in the operating room increases the influence on supply chain trends among some surgeons. Researchers found that most representatives view surgeons as “potential clients to be cultivated” and their assistance can be used to guide sales.

One participant in the study who was a sales representative said:

I often felt like I’m driving up the costs of the healthcare system…We used to sell an implant that has 99% survivorship at 15 years, which is great, right? We were told to not ever market it to anybody…If a doctor asked for it by name, we would give it to him. We want to market the newer, the better technology. I’m not certain I ever thought the newer technology was better. There certainly wasn’t data on it… I was uncomfortable with those sorts of things.

Another sales representative told the researchers that he was motivated by financial incentives to convince surgeons to use more expensive products. His mindset behind a sale was that the more expensive product did not have negative outcomes compared to other products, but it had a higher price tag, so he was going to sell it.

Additionally, the study found that surgeons are not helping hospitals reduce their supply chain costs. When medical device representatives display more expensive products, some surgeons prefer them because of their advanced features, even though similar items are available at lower costs.

“[But] once surgeons get used to using a Ferrari, they always want to drive the Ferrari,” a sales representative told the researchers. “The surgeon isn’t paying for it. The hospital is…It starts spiraling out of control.”

To resolve healthcare supply chain management challenges, researchers advised providers to develop an internal position to take over technical assistance with medical devices.

“Perhaps salaried individuals performing the usual tasks of today’s device reps—but trained on a variety of devices, with no financial incentive to promote one over the other—ought to be employed by hospitals or healthcare systems,” researchers wrote. “In this way, the value they surely impart could be preserved, comparative performance data gathered systematically, and undue industry influence curtailed.”

Healthcare organizations may also want to consider a surgeon’s assistant program to “produce that useful tier of health care providers to serve as ‘another set of eyes’ in the OR without risking compromise by industry profit motives, or the competing priority of reps’ needing to safeguard their personal bottom lines.”

While technical assistance from a vendor may help surgeons properly use medical devices, the study concluded that healthcare organizations should establish neutral financial support for educating their staff. Without a vendor’s financial motives, hospitals can start to effectively reduce their supply chain costs.

Dig Deeper:

• Why Healthcare Needs Value-Based Supply Chain Management

• Exploring the Role of Supply Chain Management in Healthcare