ACC.15: Turning TAVR’s growth into hospital profits

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 - Money Climb

SAN DIEGO—Transcatheter aortic valve replacement (TAVR) programs are picking up steam in the U.S. And they can be fiscal as well as clinical successes, but it requires physicians and administrators working together to maximize efficiencies.

The U.S. and Europe account for 89 percent of TAVR cases worldwide, said Michael Mack, MD, of the Heart Hospital Baylor Plano in Texas, at a March 16 session of the American College of Cardiology. The most rapid growth has been in Germany, but the U.S. gained momentum after 2012 with the FDA’s approval of a TAVR valve. In 2013, the U.S. had 350 TAVR centers—more than half the total worldwide.

But are those centers a good business proposition? G. Michael Deeb, MD, director of the Multidisciplinary Aortic Clinic at the University of Michigan Health System in Ann Arbor, provided the hospital’s perspective on a TAVR program. Hospitals need to weigh the upfront investment against the downstream benefit with an eye on the bottom line, he said. That includes looking at fixed costs, capital expenses and operational costs.

“The hospital strategy for this is to enhance the market share in the field,” Deeb said. “What I have to know is, can I augment this one particular program without having a negative impact on the other?” That impact could be budgetary or logistical. For instance, building a TAVR program might require reallocation of existing staff or new hires.

Hospitals and physicians need to work as a team, sharing accountability and common goals and understanding the risks each perceives in the undertaking. The hospital will look at the potential for direct and indirect profits. “Will there be that halo effect?” Deeb posed, listing open surgeries, heart catheterizations, imaging and other services as examples. “The basic question is, how can we position ourselves as a hospital to maximize the finances of TAVR?”

Physicians need resources, access to the administration and flexibility to address problems. His program schedules a weekly meeting attended by structural heart physicians and administrators. A TAVR program also requires the hospital to support a dedicated heart team, personnel, a database and infrastructures such as a hybrid operating room.

The capital investment can be high, with multimillion-dollar hybrid operating setups and valves costing about $30,000—10 times or more higher than the price tag for a surgical aortic valve, he said. “If you are putting inventory on your shelf, that is a major investment.”

His center saw a 17 percent increase in surgical aortic valve replacement (SAVR) procedures after the first full year of the TAVR program but that trajectory dwindled over time as patient volume shifted from SAVR to TAVR. “What you really want to do is make direct, not indirect, profits. How are you going to do this?”

Their solution involved an emphasis on efficiencies. For instance, make sure the hybrid room is in use, if not with TAVR, then with other hybrid procedures, and develop a flex team with multitasking cath and OR personnel. “When we first started there were so many people in that room I could not turn around,” Deeb said. “Now we divided it by about six.”

They analyzed the entire procedure to identify inefficiencies and determine how to stagger cases. As a result, they improved caseload from two procedures a day to five, with physicians done by 5 p.m.  

He urged the audience to understand reimbursement and coding. For instance, a patient admitted for heart failure who then receives TAVR will be documented with a diagnosis related group (DRG) payment designation of heart failure. If that patient is discharged, recuperates at home and is readmitted 30 days later for TAVR, he or she can be billed with the TAVR DRG.

The program can save costs by eliminating postsurgical intensive care for appropriate patients, using conscious sedation techniques and by avoiding practices that might increase length of stay, he said.

The hospital will look at direct margins per inpatient day to determine if TAVR is worth the investment. In their case, they reported an increase in margins for TAVR of nearly $350 between 2011 and 2014. SAVR margins also rose by about $500.