Cost containment is central theme for some health care companies

Everyone is searching for a way to cut health care costs.

Health care companies that manufacture drugs, make medical equipment and create IT software, for example, are constantly looking for methods to minimize their cost of operations, creating savings that can be passed along to customers and clients.

During the current long slow slog through the back end of a recession — and with decreasing Medicare reimbursements driven by dramatic health care reform — cost containment has assumed a new meaning.

Many Nashville-area health care companies would include monetary efficiency as a component of their products or services. But for some, cost containment is a central theme.

For example, Cool Springs-based Diatherix Inc. has fine-tuned a technology for testing patients for infectious disease, reducing infection rates and thus the number of days that patients have to stay in isolation and the amount of antibiotics they have to take, saving money for both patients and facilities.

“If we’re not into the economics of health care, then we are a burden on the system,” said Dennis Grimaud, Diatherix chairman and CEO. “What we’re looking to do in the private sector is provide for a faster and more efficient diagnosis,” he added. “That can save the patient money.”

Grimaud (pictured here) said the prescribing of the wrong medication and excess time spent in isolation rooms add to health care costs.

“All those components are taken into consideration,” he said.

Ohio-based Kettering Medical Center realized a savings of $3.7 million during the past year — the result of using Diatherix.

“This diagnostic technology allows us to diagnose patients faster, and the faster we can provide treatment, the faster our patients heal,” Dr. Carol Quinter, director of Kettering Laboratory Clinical Services and technical director of Diatherix Laboratory at Kettering Medical Center, said in a release. “This technology is a game changer for the health care industry. Hospital savings are directly tied to reducing patient infection rates, decreasing the days patients need to be kept in isolation and prescribing fewer antibiotics.”

In 2010, Kettering Medical Center partnered with Diatherix Laboratories to establish the only onsite hospital laboratory in the country utilizing the company’s diagnostic technology, which is called TEM-PCR.

“When we began our partnership with Kettering, we were anticipating a financial impact of roughly $225,000 [in savings] in the first year, so we are incredibly pleased with the $3.7 million results,” Grimaud said. “Our technology has been so successful at Kettering because the administration, physicians, scientists, nurses and pharmacists all embraced this innovation and were open to change. As a result, they have experienced a dramatic improvement in patient outcomes and utilization of hospital resources.”

Scotte Hudsmith, CEO of Franklin-based Parental Health, understands cost efficiencies. His company’s MISTY platform allows seniors to remain independent as long as possible, thus minimizing their expenses and, often, those of their adult children.

“By far, cost containment is the biggest thing we do,” Hudsmith said.

Hudsmith said providers of health care technology increasingly are stressing cost efficiency.

“Everyone we talk to knows they have to have a human service component and a technology component to get the efficiencies and to actually serve the market,” he said.

Doug Ghertner, president of Brentwood-based Change Healthcare Corp. — whose Transparency Messenger platform helps users  make cost-effective decisions on pharmacy, medical and dental purchases — was a keynote speaker at the recent Business Health Agenda 2012 event in Washington, D.C. The presentation Transparency and Reference-Based Pricing: Changing the Decision-Making Experience focused on how employers, health plans and vendors can work together to create a platform that allows employees to make decisions based on critical quality, convenience and cost information.

Ghertner said recent research from Towers Watson reveals that an employee’s share of health care premiums is increasing at about 9 percent per year, while wages are increasing at only about 1.5 percent per year.

“This creates significant motivation for individuals to help manage their growing burden of health care costs,” he said. Ghertner said “various stakeholders” within the industry are making efforts to reduce health care costs while “enhancing the quality of care and outcomes.”

“A lot of this is driven by policy initiatives resulting from the Affordable Care Act, such as physician and other provider collaborations to better manage patients and the costs of episodes of care in accountable care organization structures and bundled payments methodologies,” he said.

In the end, evidence-based patient outcome is the key, said Diatherix’s Grimaud.

“In today’s environment, health care economics plays a very important role in patient care,” he said. “The reason is the cost of new technology is being looked at by health care payers and providers. Can I afford it? What impact does it have on my institution? Is it evidence-based?”