Cost increases, reimbursement decreases provide quandary for hospitals

 - Tim Casey
Tim Casey, Executive Editor

As the healthcare industry undergoes massive change, hospitals and health systems are attempting to adapt to the pressures associated with keeping costs down while providing high quality care. They are seeking alternative, creative ways to improve patients’ health while also running an effective business.

Still, as a study presented at the American Heart Association/American Stroke Association international stroke conference last month shows, they sometimes suffer because of a lack of choices.

Between 2005 and 2014, the cost of alteplase  increased 111 percent from $30.50 for 1 mg to $64.30 for 1 mg. During that same time period, reimbursement from the Centers for Medicare and Medicaid Services (CMS) only increased 8 percent.

The problem is, alteplase is the only FDA-approved drug for patients with stroke from a blocked blood vessel and the standard of care for acute ischemic stroke patients, so hospitals and physicians do not have much of a choice but to prescribe the medication. The increased cost of alteplase also far outdistanced the 30.2 percent increase in the consumer price index in that time frame.

Lead researcher Dawn Kleindorfer, MD, a professor in the neurology and rehabilitation department at the University of Cincinnati in Ohio, and her colleagues used publicly available CMS data.

They found that the base payment for alteplase-treated stroke admissions increased from $11,173 in 2006 to $12,064 in 2013. Meanwhile, the alteplase cost increased from 27 percent of the payment to 53 percent of the payment during those years.

Kleindorfer explained in a slide presentation that CMS uses hospital charges to set payment amounts and is supposed to assume the same markup on all drugs when setting payments. However, she said that was not the case and that cheaper drugs have a much higher markup than more expensive medications.

She suggested that stroke physicians lobby CMS to increase diagnosis-related group payments to hospitals for alteplase-treated stroke admissions.

“The reason the cost has gone up so much is unclear,” Kleindorfer  said in a news release. “The reason that reimbursement has not kept up with the cost is complicated but has to do with the way it’s calculated and the fact that Medicare/Medicaid is cutting hospital reimbursements across the board. What we need to do is ensure that the reimbursement covers the cost of caring for these patients so that hospitals don’t lose money while providing this proven beneficial treatment.”