Is “free” really free? Ethical implications of short-term discounts and giveaways to hospitals

Problem statement

Patients requiring surgery that results in the creation of an ostomy for fecal or urinary diversion will not only face physical and emotional challenges but also additional financial costs for the appliances and supplies required for the care of the ostomy. ¹ The financial cost associated with having an ostomy will vary depending on personal needs and how often the appliance is changed, which could range from several times a day to once in 7 days. There is a wide range of appliances available and cost can vary ranging from $5 to $30 or more for individual appliances. ²

In Canadian hospitals, ostomy supplies and appliances are secured through competitive procurement processes. Given the competitive atmosphere for manufacturers of ostomy supplies, some hospitals are provided with a substantially lower price on appliances, and in some cases, the supplies are provided to hospitals at zero cost. However, as folk wisdom states, “There’s no such thing as a free lunch.” In the long run, unless manufacturers cut revenue expectations, someone has to pay. So the question is, do hospitals have a moral responsibility to consider the long-term financial impact of their procurement choices on patients or should hospitals simply focus on the sustainability of hospital operations and go for the best price during procurement?

Discussion

“What are the pros and cons of free ostomy supplies for hospitals?” This question was raised to a group of Nurses Specialized in Wound, Ostomy, and Continence (NSWOCs). The unanimous answer of 17 clinicians was that there are no cons, and the pros included universal access to all manufacturers and freedom to choose catering to the patients’ needs rather than contractual obligations.

But, is the word free clouding judgement about the impact of decisions outside of our hospital walls?

In a similar situation, in the 1960s and 1970s, formula manufacturers routinely provided free formula to hospitals and community health services with the hope that new mothers would continue to use it after discharge. However, once it was determined that this practice significantly decreased the likelihood of successful breastfeeding in the long run, the practice was curtailed and outright banned in many communities. ³ Could administrators have a similar obligation with free ostomy supplies?

It is well known that having an ostomy has an impact on the quality of a person’s life ^2,4 For example, Health Utility and Quality of Life Index of a person with uncomplicated ostomy is 0.75, which is comparable to disability after hip fracture (0.8) or first reoccurrence of breast cancer (0.7). Moreover, the same measure for a person with a complicated ostomy is 0.58, which is compared to severe heart failure (0.6). ⁵ On top of this, the financial costs will have an impact on the quality of supplies purchased, along with the services that may be available depending on location and transportation. The annual cost of ostomy supplies, per patient, is estimated at between $1,200 and $2,300 (some of which may be offset by a patient’s private insurance).

The elimination of ostomy appliance cost concerns to hospitals also have a significant influence on the way in which practitioners address patients with new ostomy needs. When all ostomy appliance providers supply their products to hospitals free-of-charge, patients have an opportunity to exercise their choice for appliances from a broader range of options. Presumably, clinical suitability and value would also drive their decision. In theory, the choice of ostomy appliances, with appropriate information from the healthcare provider assisting in the application of and care for the ostomy, can demonstrate the patient’s reflections on the financial and comfort aspects of the appliance. But, if only some vendors provide discounted supplies, will the price materially influence choice? Also, if the procurement of ostomy supplies no longer has an associated cost to hospitals, then a natural question is: where is that cost being absorbed?

Companies require revenue to survive, so what solutions have they come up with to compensate for the free supplies? Some may assume that free supplies for the hospital will drive consumers’ costs up. Interestingly, in the United States in the early 2000s, free samples from drug companies were banned from hospitals and clinics with the hope of decreasing consumer costs. ⁶ Those activities did not bring substantial savings or reduction in costs for consumers. ⁷ But how likely is it that vendors will lower prices? Given these considerations, do the hospital and/or NSWOCs have a responsibility to inform patients of the cost to maintain the chosen appliance going forward? Should stewardship be prioritized over patient autonomy and a hospital’s commitment to enhancing the health of the community that it serves?

From one perspective, it can be seen that if the cost of the supplies will impact the patient’s ability to manage his or her own health needs, and mitigate any deterioration in their health, then it will be important for healthcare practitioners to speak with patients about the cost. This information will be essential to ensure that patients are able to maintain their autonomy and ultimately make a decision that reflects what is important to them, including any financial considerations. Additionally, engaging in conversations with patients to support their ability to make decisions and advance their autonomy will ultimately enhance the health of the community that the hospital serves.

Moreover, ensuring that patients receive this information is reflected in two key parts of the Code of Ethics for members of the Canadian College of Health Leaders. Firstly, when healthcare providers engage in dialogue with patients and families about the values underpinning their preferences and choices, it aids in the identification of the needs of the community. ⁸ Further, the healthcare practitioner can support patients as they meet their ongoing healthcare needs.

An argument can be made that a company’s plan to compensate for revenue loss for free ostomy supplies should not be a consideration for hospitals or healthcare practitioners. However, if the company’s plan for recuperating the cost of free ostomy appliances and supplies directly conflict with the values of the institution, or introduces an actual or perceived conflict of interest, then the hospital should be aware of this. This also aligns with the Code of Ethics for the Canadian College of Health Leaders, as these kinds of considerations aim to conduct activities in cooperative ways such that linkages are improved. ⁹

In an effort to be competitive in a market where ostomy appliances are supplied at no cost to the hospital, supply companies often give incentives, such as free conference registrations or monetary bonuses, for signing patients up for their sampling program. Depending on the nature of the bonus or incentive, this may be an actual or perceived conflict of interest. The ethical defensibility of accepting these incentives is directly addressed in the Code of Ethics for members of the Canadian College of Health Leaders. Section F.2 requires health leaders to assure that relationships are not compromised by conflicts of interest. ⁹ While there are many benefits to attending conferences about patient care supplies at no cost to the healthcare provider, it is important to mitigate any actual or perceived personal gains, as well as impact to clinical judgement and professional relationships.

Administrative recommendations