Even more interesting is that increasingly, clinicians are on board with the need to contain device costs: They understand that there is a relationship between device costs, electrophysiology lab profitability, and their ability to have access to the technologies they need to provide the best care possible.

I believe this reflects a widening gap between the manufacturers’ interests and the hospitals’ interests, and this gap reflects a difference in the concept of value: Manufacturers are laser-focused on speeding up innovation and shortening product life cycles, so that the growth in volume combined with increased prices can maximize revenue in this lucrative space. To the manufacturer, value is a direct reflection of the speed of innovation and the technological sophistication of medical technologies (that’s the car that does 150 mph rather than 110). Ironically, procedure outcome is somewhat detached from this (it still takes 30 minutes to get to work). Clinicians used to be on board with this concept of technology value, and hospitals followed along.


Most large hospital systems in the U.S. are not doing well financially right now. Ascension posted an almost $900 million loss in Q1 of 2022, down from net income of $957.32 million in Q1 of 2021. Kaiser Permanente posted a loss closer to $1 billion, down from net income of $2 billion in the same quarter last year. Staffing costs are up, as hospitals are increasingly dependent on contract workers such as travelling nurses. Staffing shortages reduce procedure volume (and income), supplies are becoming more expensive, and service line management profitability is a challenge. At the same time, the pandemic cost hospital systems dearly, and they are still trying to dig themselves out of this financial hole. As a result, a May 8 Wall Street Journal article reported that large health systems like HCA and UHS are asking insurance companies and employers for higher payments for procedures, which will undoubtedly result in higher consumer premiums.

The manufacturer concept of value simply does not fit this situation. Hospitals simply cannot absorb higher device costs without evidence of substantial outcome improvement. In fact, they are looking for solutions that reduce their device costs. To hospitals, technology value means technology that allows them to provide better care to more patients at a lower cost (i.e., they need to get to work faster without paying more for the car).

Few exhibitors in San Francisco came with this solution, and certainly not the industry giants. Thankfully, there were valuable presentations about new methodologies and approaches, such as pulsed field ablation, and there are always lots of smaller companies who have no choice but to align themselves closely with hospital interests — and offer cost-effective solutions in areas such as patient monitoring.

About the author: Lars Thording is the VP of marketing and public affairs at Innovative Health LLC.
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