R. Duane Davis, MD MBA
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1 R. Duane Davis, MD MBA
2 Reasons that health systems want a flourishing lung transplant program Profitability $35-90 K/ case transplant admission- almost 10 million in profit Potential Growth demand >>> supply- but may be able to substantially grow the supply Life years added Down stream revenues Research/Academic
3 Regulatory Requirements UNOS CMS Revenues Professional Technical Medicare Cost Report
4 Expenses Physician and Surgeon Coordinators Social Work Psychology Pharmacist Administrators Data Secretaries/schedulers Donor Call
5 UNOS requirements-- s.pdf Program Director Primary Transplant Surgeon least 15 lung or heart/lung transplants at least 10 lung procurements current working knowledge of all aspects of lung transplantation, defined as a direct involvement in lung transplant patient care within the last 2 years Primary Transplant Physician Outcome triggers for review No volume criteria functionally inactive if no transplants in 6 months
6 1. Transplant programs must have transplant surgeons and transplant physicians available 365 days a year, 24 hours a day, 7 days a week to provide program coverage, unless a written explanation is provided that justifies the current level of coverage to the satisfaction of the MPSC. 2. Transplant programs must provide patients with a written summary of the Program Coverage Plan when placed on the waiting list and when there are any substantial changes in the program or its personnel. 3. A transplant surgeon must be readily available in a timely manner to facilitate organ acceptance, procurement, and transplantation. 4. A transplant surgeon or transplant physician may not be on call simultaneously for two transplant programs more than 30 miles apart unless the circumstances have been reviewed and approved by the MPSC. 5. Unless the MPSC provides an exemption for specific reasons, the primary surgeon or primary physician cannot be designated as the primary surgeon or primary physician at more than 1 transplant hospital unless there are additional transplant surgeons or transplant physicians at each of those facilities. 6. Additional Transplant Surgeons must be credentialed by the transplant hospital to provide transplant services and be able to independently manage the care of transplant patients, including performing the transplant operations and organ procurement procedures. 7. Additional Transplant Physicians must be credentialed by the transplant hospital to provide transplant services and be able to independently manage the care of transplant patients
7 Transplant surgeon Transplant physician Clinical transplant coordinator Transplant team--center must identify a multidisciplinary transplant team (composed of individuals from medicine, nursing, nutrition, social services, transplant coordination, and pharmacology) and describe the responsibilities of each member of the team. CMS is becoming more prescriptive Annual volume of 10 transplants Implications for starting up a transplant program A center s (risk-adjusted) expected 1-year patient survival and 1-year graft survival will be compared to its observed 1-year patient survival and 1-year graft survival, based on the following non-compliance thresholds O - E >3. O/E > sided p <0.05.
8 Centers whose number of patient deaths or organ failures exceed 150 percent of what would be expected for their mix of patients are flagged. Multiple flags within a year period trigger CMS action. Centers have 210 days to explain the mitigating factors that led to their low survival rates. If programs can improve by the end of that period, they are allowed to continue operating as usual. In other cases, CMS will acknowledge the mitigating circumstances and grant exceptions. The centers that can t improve quickly or convince CMS to grant an exception are given three options: shut down voluntarily, shut down involuntarily enter into a systems improvement agreement, or SIA. Estimated cost between $1-4 million
9 If looking at a job, know their outcomes SRTR.ORG
10
11 Professional Transplant procedure related Procurement--$3500 E &M services evaluation ECMO both procedure and daily management Technical where the real $$ exist Evaluation, pre-transplant, transplant and post transplant Amount of profit is dependent upon Contracts somewhat tied to outcomes data and competition Case mix managed care> Medicare>>Medicaid Cost LOS usually a good surrogate for expense Most profitable admissions cardiac and lung transplant, pediatric bone marrow Medicare Cost Report Transplant DRG does not include the cost of the organ Complicated but general rules all expenses incurred for evaluation and procurement of donor organs are included and reimbursed by CMS at the % of Medicare beneficiaries
12 RVU changes was now SLT no CPB SLT CPB DLT no CPB DLT CPB Pneumonectomy Be involved or at least be informed regarding contract negotiations Procurements include the dry runs
13 Why?? Large amount of administrative time Outreach Non-billable clinical activity How?? Depends on relationship with the hospital Employee straightforward Non-employee ( Stark Laws) need legal input Purchase service agreements Co-management
14 Procurement Dry runs we have a 30+% rate OPO non-compensation This can be part of the Cost Report
15 Expenses Physician and Surgeon Coordinators Social Work Psychology Pharmacist Administrators Data Secretaries/schedulers Donor Call
16 One surgeon/one pulmonologist programs don t work Have to be > 10/year to stay out of CMS hell 30/year is probably the size threshold Team resources are justifiable Volume sufficient for system learning Profitability threshold
17 Orlando Regional Healthcare System, Inc. (CON #10027): The financial impact of the project will include the project cost of $1,781,632 Year two incremental operating costs of $3,615,786. Does not include physician and surgeon salaries in this estimate
18 3rd leading cause of death >138,000 per year 2000 lung transplants/year Large centers perform 100 Organ utilization of 17% Knowledge gap in the community is tremendous with respect to the applicability of lung transplant as a treatment for end-stage lung disease
19 Size of the program is proportional to the ability to obtain organs Procurement surgeons/professionals tends to be the limiting factor Competing demands and interests Under valued Direct compensation Alternative ways of spending time Intellectual/quality of life financial
20 Almost all of the team will be expenses to the program Pulmonary if they do enough proceduresbronchoscopy, biopsy, airway intervention will be profitable otherwise no Alignment across the various constituents Medicine/Pulmonary CT Surgery Hospital
21 Referrals, evaluations, listing can/often is rate limiting Coordinator Schedulers MD review Outreach Referral relations Web presence-- SRTR.org
22 Know your costs Know your margins Variable contribution margin (VCM) should be your focus but total margin (indirect cost) will be used Beware the costs of new technology that add little value Willie Sutton rule go where the money is
23
24 Transplant is highly regulated and consequences of underperformance are real Fully publically reported Highly profitable for the hospital, less so for the MD s It takes a team!! all parties are important and need to be valued
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