Exploring changing landscapes

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Candace Stuart - Portrait - 179.76 Kb
Candace Stuart, Editor, Cardiovascular Business

After a full day’s drum roll, the FDA’s Circulatory Systems Devices advisory panel recommended that transcatheter aortic valve replacement (TAVR) procedures be approved for severe aortic stenosis patients at high risk for surgery. That was the ending that I, and probably most other observers, anticipated. Of course, this is good news for patients, because the FDA typically follows its panels’ advice.

This also is likely to cheer vendors who provide TAVR-related products and the hospitals that offer TAVR programs. It will be interesting to see, post-approval, if and how being a TAVR facility affects contribution margins and ultimately profit margins for these institutions.

While the FDA review received much of the limelight that week, another development in the Beltway emerged. The Government Accountability Office released an analysis prepared for the U.S. Senate Finance Committee tracking trends in the use of implantable medical devices (IMDs) in Medicare beneficiaries. The report focused on two types of devices, orthopedic and cardiac, because implantation of those two categories of devices accounted for costs of $20 billion in 2009.

On the surface, it would seem that the effort to curb admissions and costs for cardiac devices has been successful. While admissions for orthopedic devices rose steadily between 2004 and 2009, admissions fluctuated for cardiac devices (drug-eluting stents, automatic implantable cardiac defibrillators and dual-chamber pacemakers) and posted declines after 2007. Spending for orthopedic implantable devices rose 8.1 percent annually compared with cardiac devices’ 1.2 percent annual increase.

But it is important to note that the analysts studied only inpatient procedures. As the report’s authors point out, there has been a shift from performing some cardiac procedures in outpatient rather than inpatient settings since 2007.

“This trend coincided with Medicare Recovery Audit contractors collecting overpayments for certain inpatient cardiac IMD procedures that could have been performed in the outpatient setting, possibly prompting other hospitals to change their admission patterns,” the GAO authors wrote. “Generally, Medicare pays hospitals a relatively lower rate for the same procedure when it is delivered in the outpatient rather than the inpatient setting.”

Other sections of the report noted a change in patient characteristics, with a greater proportion of patients in poor and very poor health being seen, possible because healthier patients migrated to the outpatient setting. What are the implications in these shifts? From a hospital perspective, does this presage more costs associated with sicker patients at a time when reimbursement may be shrinking?  

Please let me know what you think.

Candace Stuart
Cardiovascular Business, Editor
CStuart@cardiovascularbusiness.com