Measuring ROI Based on Procedure and Reimbursement Rate

Transcription

1 Measuring ROI Based on Procedure and Reimbursement Rate Dee Whittington RN BSN CNOR Clinical Supply Consultant Gregg Lauder MBA CMRP Senior Capital Director

2 Topics to Cover Analyze the true cost of potential capital purchase based on financial margins Role that reimbursement plays in measuring ROI for potential capital purchase Avoid prioritizing purchases based on nonfinancial factors

3 Banner Health Banner Health is one of the largest nonprofit health care systems in the country, serving Alaska, Arizona, California, Colorado, Nebraska, Nevada and Wyoming. Headquartered in Phoenix, Ariz., the Banner Health system includes: 23 hospitals, long term care centers, facilities specializing in the needs of children, and an array of other services, including family clinics, home care services and home medical equipment services. Banner Health facilities are located in:

4 Banner Health's vision: We will be a national leader recognized for clinical excellence and innovation, preferred for a highly coordinated patient experience, and distinguished by the quality of our people.

5 Todays Healthcare environment is increasingly challenging. Service, quality and financial goals are not always functioning towards the same sustainable goal. Reduced Volumes, an increase in self pay and charitable debt patients and healthcare reform, the payment and delivery systems add stress on an already pressured industry.

6 Healthcare Practices and Trends Management traditionally has focused on price. Price negotiation is still important, but today, more importance is being placed on utilization, strategic sourcing, logistics management, and supply chain strategic planning Yesterday Today

7 Historical Decision Factors Physician Preference Clinical Preference Market Competition Community Need Product Cost Service and Maintenance Costs Where the technology is in the lifecycle What innovative upgrades are forthcoming Vendor Relationships GPO or Contract Structures/Commitments

8 So where do we go from here Fine tune current process to negate subjective input CTAP (Banner s process) Develop Matrix that measures Objective data Engage Key stakeholders in process Decision Engagement Accountability

9 9

10 Strategic Decision Factors Reimbursement ROI What programs are sustainable or produce profit margin Role of the ACO and reimbursement Longevity/Life Cycle Replacement/complimentary Are there modifiers for reimbursement Strategic programs Affiliation with Market leading specialty IDN s MD Anderson Cardon s Children's Center Patient Improvement Outcomes with Evidenced Based Technology

11 The Decision Matrix Return on Investment Better Neutral Worse Worse Neutral Better Strategic, Lifecycle, Patient EBO

12 Clinical Technology Assessment Process (CTAP) The CTAP is designed to define and administer the process and protocol that adhere to the Banner Health Capital Equipment Standards Policy The CTAP provides a mechanism to review existing and emerging clinical technologies and applications, devices, and equipment to determine the viability of the selected technology and determine if the technology should be incorporated as a standard within Banner Health. 12

13 CTAP Team Structure There are 2 components of the CTAP Clinical Technology Advisory Group (CTAG) A high level, core enterprise team. The CTAG is the oversight group that administers the CTAP. This group is a constant in the process User Groups These may be permanent or adhoc. The permanent user groups are called Product Standards Teams (PST), which are already utilized for supply and equipment standardization recommendations. These teams are made up of end users from each major service line with representatives from each Banner facility When needed, Adhoc Teams will be assembled and assigned for the length of the assessment project. Members will be clinical and business experts in a particular clinical technology or group of clinical technologies. Each Adhoc team will have standing reps from MM and Technology Management consistent with the user group supply teams that exist today 13

14 We need to use to right product for the best outcome. Using an elephant gun to kill a fly is a little overkill

15 Example of process Service Line: Cardiovascular Specialty: Cardiac Catheterization Lab Optical Coherence Tomography (OCT) Current Providers: St. Jude Volcano Terumo Competing Technologies: Intravascular Ultrasound (IVUS), Cardiac X ray Angiography, IV MRI, InfraReDx Spectroscopy, Image Guided Therapy (IGT) Application: OCT helps identify structures associated with vulnerable plaque both in location and the progression of lesions. OCT shows promise in pre and post placement of stents and detection of complications after PCI

16 Optical Coherence Tomography (cont.) Risk of Obsolescence: Moderate depending on the adoption rate and further clinical evidence when compared to IVUS. FDA/Regulatory: No FDA and/or Regulatory related issues Patient Selection Criteria: There are no standard selection criteria for patients in the literature. Current Standard of Care: Cardiac x ray angiography to visualize the coronaries and IVUS to determine the proper selection and placement of stents Projected Costs: Capital Investment: OCT Lab Equipment Consumable Costs: Radiotracers and injection materials Reimbursement: No specific reimbursement for OCT. Predictions are that reimbursement will that of IVUS which is currently reimbursed on an outpatient CPT level of $96 per usage.

17 Technology Overview: Optical coherence tomography (OCT) is a catheter based intravascular imaging technology that uses near infrared light instead of ultrasound or fluoroscopy to visualize the coronary vasculature. First leveraged for ophthalmology, the recent 510(k) FDA approval of St. Jude Medical s OCT system in May of 2010 has extended its capabilities for cardiovascular imaging. Currently, OCT has the highest imaging resolution of any available technology on the market, able to visualize tissue down to the 10 to 15 micron range; ten times the resolution of competitive products such as intravascular ultrasound imaging systems (IVUS). Greater precision in imaging through OCT allows physicians to make more informed decisions for medical therapy, especially in regards to percutaneous coronary intervention (PCI), by providing a better understanding the complexity of plaque composition in the coronary vasculature. OCT technology consists of a high speed imaging engine, a computer with keyboard and display, a probe interface unit (PIU), and a coronary imaging probe, which emits infrared light. Visualization through the manipulation of light frequencies allows OCT to produce high resolution, two dimensional tomographic pictures of coronary vessel walls and structures. To obtain a scan of the specified vessel segment, physicians must first insert a catheter containing a single optical fiber into the arteries of a patient s arm or leg. This is followed by a quick automatic pull back of the catheter s inner member. Operating under the concept of low coherence interferometers, a beam splitter splits light into a reference arm and sample arm that in turn channels the light into a moving mirror and the targeted tissue. When the light returns to the detector, the computer translates measurements of the echo time delay and signal intensity of the backscattered light into cross sectional images. This information is then stored in the console for real time and off line analysis by interventional cardiologists.

18 Clinical Considerations: OCT has the ability to visualize detailed structures of vulnerable plaque unseen by previous imaging modalities; identification of plaque type may lead to early detection of atherosclerosis associated with sudden cardiac episodes resulting in death. Given OCT s ability to detect stent overexpansion and post stenting vessel injuries, research supports further clinical adoption of OCT for guidance of stent placement during PCI and follow up risk assessment of thrombosis and restenosis. Massachusetts General Hospital has launched the first OCT registry in August 2010 to study adverse events associated with vulnerable plaque and risk assessment of stent placement; results expected soon; may bridge barriers to clinical adoption by addressing concerns over lack of user experience.

19 OCT: Strengths and Limitations Strengths High imaging resolution allows for better visualization of calcified areas without challenge of acoustic shadowing like IVUS Guidance and surveillance of stent implantation for more detailed image of stent position High speed image acquisition through real time imaging Minimal training required for usage; training focuses on image interpretation Limitations Limited penetration of tissue depth More susceptible to imaging artifact Cannot see through blood must inject contrast agent during procedure Need for standardization of image display, imaging protocol, image interpretation and terminology

20 Financial Considerations: Although adoption has been limited to 10 to 15 hospitals across United States, OCT may experience moderate growth in the next 5 years, estimated at an annual growth rate of 60 percent. The greatest challenge to market penetration of OCT is the lack of reimbursement structure. Without appropriate reimbursement from the Center for Medicare and Medicaid Services (CMS), users cannot realize revenue to combat the high cost of OCT. Like IVUS, this cost revenue imbalance remains a major obstacle to commercial adoption for hospitals accustomed to the lower price burden per procedure of traditional angiographic modalities

21 Strategic/Operational Considerations: When considering future Medicare reimbursement rates, some predict that OCT reimbursement will follow that of IVUS, which is only reimbursed on an outpatient CPT codes level at $96 per usage. Strong marketing, training initiatives by device companies may push further adoption of OCT at a few academic medical centers in the next few years, but further multi centered clinical trials are needed to transition OCT from the research to clinical use Although ease of use is a strong asset of OCT, physician and staff training play an integral role in preventing adverse events and improving patient outcomes. Training efforts should focus on image interpretation, as newer tomographic images may be unfamiliar to physicians accustomed to other imaging modalities. OCT s high resolution for guidance of PCI and its ability to detect plaque types as a preventative indicator of sudden cardiac episodes may lead to cost saving opportunities for hospitals down the line as physicians look to improve the quality of patient care and prevent re admissions. Without relevant studies however to support this hypothesis, data to make an informed decision for purchasing OCT technology over other lower resolution imaging modalities is lacking.

22 Next Steps for OCT: Gauge physician support for OCT versus other imaging modalities for stent selection, placement and detection of complications, and characterization of vulnerable plaque. Evaluate how this technology fits into a regional based cardiovascular services program and if determined to be a required technology, how it should be adopted. Determine institutional ability to finance the purchase of complete OCT systems. Recruit or train physicians and allied healthcare staff in OCT technology

23 Capped Pricing Model I realized that my role at Banner Health was not to try to tell a physician which products to use. My real role was to try to manage the cost of the products coming in to Banner. The benefit of capped pricing is that you can allow as much physician choice as you want, and the hospital is going to pay the same price for the same product no matter who the vendor is. 23 Doug Bowen, Vice President, Material Management Banner Health A Team Approach to Cost Containment HFM Magazine, April 2008

24 Conclusion Analyze the true cost of potential capital purchase based on financial margins Reviewing where you have been can show a clear picture of where you need to go. BH has provided examples of progress to align strategically with healthcare realities Role that reimbursement plays in measuring ROI for potential capital purchase It is clear that to be sustainable ROI is the forefront of the decision matrix Avoid prioritizing purchases based on non financial factors With ACO models it is imperative to strategically utilize tools for objective planning of purchases

25 Thank you