A new system called Sedasys, made by Johnson & Johnson, would automate the sedation of many patients undergoing colonoscopies. That could eliminate a big source of income for anesthesiologists

September 25, 2013, 7:12 p.m. ET

Robots vs. Anesthesiologists

J&J’s New Sedation Machine Promises Cheaper Colonoscopies; Doctors Fight Back

JONATHAN D. ROCKOFF

Anesthesiologists, who are among the highest-paid physicians, have long fought people in health care who target their specialty to curb costs. Now the doctors are confronting a different kind of foe: machines. A new system called Sedasys, made byJohnson & JohnsonJNJ -1.29% would automate the sedation of many patients undergoing colon-cancer screenings called colonoscopies. That could take anesthesiologists out of the room, eliminating a big source of income for the doctors. More than $1 billion is spent each year sedating patients undergoing otherwise painful colonoscopies, according to a RAND Corp. study that J&J sponsored.J&J hopes the potential savings from using Sedasys will appeal to hospitals and clinics and drive machine sales, which are set to begin early next year. Sedasys “is a great way to improve care and reduce costs,” J&J CEO Alex Gorsky said in an interview.

Anesthesiologists’ services usually cost more than the $200 to $400 generally charged by physicians performing the actual colon-cancer screenings, says health-plan CDPHP in New York state. An anesthesiologist’s involvement typically adds $600 to $2,000 to the procedure’s cost, according to a research letter published online by JAMA Internal Medicine in July.

By contrast, Sedasys would cost about $150 a procedure, according to people familiar with J&J’s pricing plans. Hospitals and clinics won’t buy the machines, instead paying a fee each time they use the device, these people say. The $150 would cover maintenance and all the costs of performing the procedure except the sedating drug used, which would add a few dollars, one of the people says.

As J&J prepares for a limited rollout, many anesthesiologists are sounding the alarm. They say the machine could endanger some patients because it uses a powerful drug known as propofol that could be used improperly. They also worry that if the anesthesiologist isn’t in the room, he might not be able to get to an emergency fast enough to prevent harm.

“Everyone is so hot on technology, but you have to balance the fiduciary duties of the company with the physicians’ interest in” ensuring the highest quality and safest care for the patient, says Rebecca Twersky, who chairs the American Society of Anesthesiologists’ committee on Sedasys.

The group lobbied the U.S. Food and Drug Administration for years in a bid to prevent approval of the device, which was finally green-lighted in May. Afterward, the group met with the FDA and J&J to discuss its concerns. Now, the society is drafting recommendations for using Sedasys “in the safest and most efficient fashion,” a spokesman says. And it is urging its more than 50,000 members to tally the number of times the machine is used and the number of emergencies that arise to develop a national database measuring the device’s safety.

During testing, none of the 1,700 patients sedated by Sedasys required rescuing, says Steven Shafer, editor-in-chief of the medical journal Anesthesia & Analgesia, who helped J&J develop the machine. He says that the machine’s use is limited to healthy patients who aren’t at risk for problems and that the machine has mechanisms to monitor patients and make rapid adjustments, such as boosting oxygen.

“These are all things an anesthesiologist would do,” says Dr. Shafer, a professor of anesthesiology at Stanford University.

The dispute over the machine could be a harbinger of health-care battles to come. Intensifying efforts to control spending present a commercial opportunity for health-product makers, but the new technologies threaten to disrupt physicians’ livelihoods.

J&J is also developing a device that could cut anesthesiologists out of another popular procedure: surgery to insert tubes into the ears of children seeking relief from infections. J&J hopes that ear, nose and throat doctors will be able to insert its device with the push of a button, avoiding having to put the kids under anesthesia in a hospital.

Health-care number crunchers have frequently targeted anesthesiologists for savings. Their median annual salary of $286,000 is ninth among all physicians and third among nonsurgeons surveyed by PayScale.com, a salary data and software firm.

 

Cost-cutters sometimes seek to supplant anesthesiologists with nurses or physician assistants, arguing that such midlevel professionals can deliver routine care more cheaply than doctors. But anesthesiologists have proved to be formidable opponents of such efforts by raising safety concerns. In a bid to curb what it considered unnecessary medical costs, In 2007 Aetna tried to limit the use of anesthesiologists during routine colon-cancer screenings by paying for their services only for high-risk patients, but it was forced to shelve the plan.

Anesthesiologists say they provide a vital, sometimes life-saving service. Patients under anesthesia can suddenly stop breathing, or their hearts may abruptly stop beating. Anesthesiologists check patients to make sure they can withstand surgery, then monitor them during the procedure and provide split-second aid if anything goes wrong. To do so, they spend four years in training after completing medical school.

The gastroenterologists and regular nurses who perform colon-cancer screenings lack this specialized training and can’t focus solely on the sedated paitent’s health, many anesthesiologists say.

Johnson & Johnson

J&J’s Sedasys machine

Colon-cancer screenings are considered effective tools to detect tumors in the colon and rectum and help head off a disease that is the second-leading cause of U.S. cancer deaths. The gastroenterologists who conduct colonoscopies can choose from a variety of drugs to sedate patients. Propofol, which can result in a level of sedation as deep as general anesthesia, is widely used because it both takes effect and wears off quickly.

Anesthesiologists are often brought in to administer propofol because it can cause patients to abruptly lose blood pressure or suddenly stop breathing.

In 2009, $1.3 billion was spent on 12.5 million of such gastroenterology probes, according to a RAND Corp. study paid for by J&J’s Ethicon Endo-Surgery unit, the maker of Sedasys. The study suggested that $1.1 billion of the spending was for low-risk patients who didn’t need it.

Anesthesiologists began challenging Sedasys while the FDA was reviewing the device. Their professional society sent the FDA two letters expressing concerns. Stanford Plavin, president of Ambulatory Anesthesia of Atlanta, testified at an agency hearing in 2009 that the machine would present a danger.

“There’s really no substitute for physician-centered care,” Dr. Plavin said in an interview.

The FDA initially rejected the device, saying in 2010 that more data comparing the use of Sedasys to care by anesthesiologists was required to assess the safety of the machine.

But this past May, the FDA approved Sedasys for use on healthy patients 18 years of age and older who require mild or moderate levels of sedation during the colon-cancer screenings. Under the terms, an anesthesiologist or anesthesia-trained nurse must be “immediately available” on site but doesn’t have to be in the room during the procedure.

Anesthesiologists say they worry that Sedasys will be used on risky patients who should have an anesthesia professional present in case of an emergency. “If a patient ends up dying because of preventable circumstances, that’s not going to be acceptable because we are trying to save money,” says Richard Cano, an anesthesiologist in Ames, Iowa.

J&J says it will train doctors and nurses to use Sedasys, making sure that only appropriate patients are treated with the machine and an anesthesiologist or nurse anesthesist is on site.

To further protect patients, the company says it plans to introduce Sedasys slowly, in select hospitals and clinics starting early next year and in collaboration with anesthesiologists, nurse anesthesists and other doctors.

“This is truly a first-in-kind medical technology that has the potential to redefine the way sedation is administered,” it says.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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