STATS

By Larry Burnett,  R.N.

According to the American Heart Association, heart failure is a major unresolved public health concern with more than 5 million individuals in the United States affected by this condition. 

Incidentally, some of the most expensive devices used in hospitals are cardiac rhythm management (CRM) devices, e.g., pacemakers and defibrillators, and cardiac resynchronization therapy (CRT) devices. The market for these devices continued to expand in 2006, and several major heart failure studies were released supporting their growing use.  

The most vulnerable populations are those with low ejection fractions (a measurement of heart function) where a defibrillator (CRT) has been proven as the treatment of choice.

In patients who require cardiac resynchronization therapy for heart failure, studies have demonstrated an added survival benefit with the inclusion of an expensive CRM device. Given these new findings, it is unlikely that a decrease in device implantations will occur.

Final rulings released earlier this year from the Centers for Medicare and Medicaid Services, Baltimore, provided for a slight increase in pacemaker DRGs, but further reduced implantable cardioverter defibrillator DRG payments.

This will have a tremendous impact on hospitals performing CRM procedures. A clear understanding of current data for costs, reimbursement and utilization implications of this service line allows hospital leaders to make better decisions.

While hospitals negotiate most contracts and provide space and equipment to perform these procedures, physician preference generally trumps all other considerations when it comes to device selection.

In addition, physician training in specific vendor products, working relationships and clinical expertise of vendor representatives and a physician’s history with particular devices further confound a hospital’s ability to clearly articulate its vision and direction.

Given these trends, it is imperative that hospitals look at internal and external services for cost and utilization benchmarking and continue to work with implant-ing physicians to reduce costs. There are differences of opinion about what constitutes best practices in this area, particularly given the range of devices from reputable companies with various clinical features. This further reinforces the need for hospitals and physicians to develop a joint vision.

To standardize comparisons, CardiacFocus benchmarking data includes specific device and lead pricing only. Costs are compared with the average national CMS reimbursement.

Based on the SupplyFocus database, the average cost for DRG 552 (pacemaker procedure) and DRG 115, with ICD-9 codes of 00.51 or 00.54, (CRT-D) procedures has been calculated. The charts on page 41 reflect the top quartile and decile average cost as a percent of the average CMS reimbursement. Hospitals continue to see eroding profit margins despite arduous work to reduce supply costs.

Top quartile 2007 benchmark cost (device and leads only) to reimbursement percentages for DRG 552 was 50 percent and for DRG 115 (ICD-9 code 00.51 or 00.54) was 93 percent. The implications of these data are clear, especially considering other costs that must be added to calculate total procedure cost compared with reimbursement. In addition, eliminating the new technology add-on payment in 2006 severely reduced reimbursement for CRT-D devices. 

Support for this product line in the future, especially CRT-D devices, will require not only new and different methods of cost controls, but also a true shared vision with physicians.  

Stats are taken from both SupplyFocus and CardiacFocus, which are Premier’s comparative databases of both operational and supply chain cost information and cardiac care supplies, respectively, for acute care hospitals. At present more than 700 hospitals’ data is included.

Larry Burnett, R.N., is a director of cardiovascular services with Premier’s Integrated Consulting Services based in Charlotte, N.C. He can be contacted at larry_burnett@premierinc.com.

CardiacFocus top quartile and top decile pacemaker cost as a percent of average national Medicare reimbursement for 2005–2007

CardiacFocus top quartile and top decile CRT-D cost as a percent of average national Medicare reimbursement for 2005–2007

Source: Premier CardiacFocus and Supply Focus, 2006

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