Growth strategy for cardiovascular services takes center stage as many reform efforts and current market forces have the potential to greatly affect the demand for CV services. For instance, the intensifying scrutiny over procedure appropriateness, increased pressure to prevent avoidable readmissions, and the shift of volumes to the outpatient setting are likely to soften inpatient CV volumes.
To assist members in forecasting the business, the Cardiovascular Roundtable has released updated Inpatient and Outpatient Market Estimators. These tools provide five- and ten-year volume projections for specific hospital regions, determined by zip codes or counties. In reflection of these new offerings, cardiovascular expert Brian Contos highlights the key drivers of growth for CV services.
Q: What are the most notable changes to the Estimators’ five-year CV forecasts relative to previous years?
Brian Contos: Speaking broadly, demand for hospital services has declined substantially in recent years. This is in large part due to a persistently weak economy, reform initiatives, and several other market forces. The observed volume declines have come to a head in the past 12-18 months for a host of reasons including:
The impact of readmission penalties: With the launch of the Readmissions Reduction Program around the corner, hospitals feel pressure to reduce inpatient admissions (specifically for those conditions under the watch glass—AMI and heart failure). Many medical patients are now treated as outpatients, either under observation status or through the use of post-discharge care (e.g., heart failure clinics).
The outpatient shift: Separate from readmission pressure, select procedural and medical cases (e.g., PCI, ICDs, chest pain) continue to migrate to the outpatient setting, resulting in a decline in inpatient volumes.
Appropriateness scrutiny: Cardiovascular providers are facing greater pressure and urgency to deliver value-driven, appropriate care. The recent highly publicized events regarding inappropriate placement of stents and ICDs, and the rising concerns over the appropriate use of diagnostic testing have brought the issue of right-sizing care to the forefront.
The above forces only scratch the surface of the breadth of drivers affecting specific service projections.
Q: What are the Roundtable’s projections for coronary revascularization, particularly in light of recent scrutiny over procedure appropriateness for PCI?
BC: Overall, we estimate a five percent decline in projected PCI volumes over the next five years.
The PCI story is a complex one. Recall the declines in the mid-2000s as a result of the COURAGE trial and late stent thrombosis controversy with use of drug-eluting stents. Shortly thereafter, we saw a recovery in volumes (e.g., as programs adopted bare-metal alternatives, with innovations in drug-eluting stents). Today, PCI volumes are once again in jeopardy, largely due to appropriateness scrutiny.
After a Maryland Cardiologist was found performing hundreds of unnecessary stenting procedures, leading to federal convictions, scrutiny over PCI appropriateness has only intensified. Studies have found that potentially 12 percent of PCI procedures are inappropriate, with another 40 percent of uncertain appropriateness. (See the Roundtable’s coverage of these developments.) However, the largest percentage of inappropriate procedures is not attributed to the most acute cases; patients with stable CAD may benefit equally from PCI or medical management. In fact, a recent study found comparable effectiveness of PCI and medical management for patients with stable CAD.
Studies indicating that PCI is potentially inappropriate for the management of stable CAD have the potential to greatly affect referral patterns as PCPs and cardiologists are beginning to manage these patients without revascularization. Adding to this referral decline are the positive effects of disease prevention happening at both the primary and secondary levels, which may obviate the need for costly invasive procedures.
On the flip side, there are positive drivers that could lead to modest increases in PCI volumes. The results of CPORT-II and other related trials may indicate the potential to expand PCI offerings without surgical back-up, possibly increasing capture of the underserved. Of course, if positive results lead to unfettered growth of new cath labs in already saturated markets, programs will more likely see a diluting of market share with little new volume generation.
Q: Demand for EP implantables has decreased fairly dramatically in the last couple of years. Do you expect this trend to continue?
BC: Overall, the EP market will grow; however, we estimate a modest 5 percent increase in ICD/CRT-D volumes over the next five years.
Historically, EP implantable volumes grew at a double-digit rate. While we still feel there is great potential in this space, in some ways this market has matured. Not unlike the PCI landscape, electrophysiology is affected by a number of similar factors leading to softening volumes:
- The poor economy has led many patients to postpone elective procedures
- A focus on preventive care is modestly affecting procedure volume
- The prevalence of generalists managing complex patients independently affecting referral patterns
- The recent Department of Justice appropriateness scrutiny related to Medicare coverage.
Placing additional downward pressure on volumes are rather significant capacity issues related to the EP specialty at large; there are not enough specialists to treat the eligible population. This insufficient supply of physicians prevents many programs from fully realizing their volume potential, especially in rural markets. Given this point, there may still be latent demand in some areas.
For instance, programs have been unable to fully penetrate certain populations. More specifically, the secondary prevention patient cohort represents patients already managed by an electrophysiologist; programs have largely captured this demand. The primary prevention patient cohort, however, is comprised of lower-acuity patients that are more challenging to identify. The challenge is twofold:
- Less-acute conditions make diagnosis/identification challenging
- Difficulty targeting referrers due to diversity of physicians managing patients.
One opportunity for growth may be applications of ICDs or CRT-Ds in less-severe heart failure. The recent RAFT and REVERSE trial data support the expansion of CRT indications to Class II heart failure patients.
Q: Now that transcatheter valves are approved for use in the United States, what do we expect to happen to the valve disease market?
BC: Valve procedures receive a more optimistic forecast of approximately 18 percent across the next five years. Given that TAVI procedures narrowly target surgery-ineligible patients, it is not likely that they will cannibalize surgery volumes in the near-term, lending to the relatively high growth projection.
We estimate the surgery ineligible population represents approximately 12,000-13,000 cases per year; and programs are investing to meet this new demand. However, recent consensus documents and CMS’ proposed coverage both indicate stringent requirements on TAVI facilities and operators. It will take a significant investment for a program to secure these volumes effectively. Given the breadth of requirements, we anticipate only 250-300 programs will actually meet standards; compare this to the almost 1,400 hospitals performing PCI.
In addition to the obstacle of facility and operator requirements, high device costs and the mapping of TAVI to traditional valve surgery MS-DRGs are expected to keep procedure margins fairly low. This may discourage some program development.
Q: Many programs have seen vascular services as a growth market. How will peripheral procedures perform over the next five years?
BC: Overall, peripheral services are expected to grow 9 percent over the next five years.
Similar to the EP landscape, peripheral procedures have historically represented very green field markets; however, certain portions of the business are reaching maturity. Broadly speaking, the proliferation of peripheral programs due to projected demand and profitability has led to this evolution.
On a more granular level, specific procedures have been more vulnerable. For example, the growth in renal artery interventions has fluctuated significantly. For several years, this procedure grew tremendously, but with appropriateness scrutiny and questions of clinical efficacy, volume trends have completely reversed. Programs have lost nearly half of volumes gained in the early-to mid-2000s.
Another procedure with historical forecasts indicating sizeable growth is carotid stenting. However, carotid stenting volumes have not kept pace with projections. Lack of alignment between FDA criteria and CMS coverage has limited reimbursement. To make matters worse, controversy over appropriateness of carotid stenting versus endarterectomy has fueled heated arguments between affiliated societies, further slowing growth prospects. Nevertheless, we estimate a 45 percent growth over five years largely dependent on better alignment between the FDA and CMS criteria lending to more favorable reimbursement conditions.
Q: What does the landscape look like for medical cardiology?
BC: Medical cardiology stands to see some of the most dramatic inpatient volume declines. Overall, we estimate a 10 percent decline in inpatient volumes over the next five years, largely attributed to scrutiny over readmissions and pressure to manage short-stay cases under observation status.
One response to readmission reduction pressure has been strategic use of observation units to avoid admission. For heart failure and chest pain patients, these units are useful in preventing index admissions and avoiding future readmission penalties. Programs are also leveraging ambulatory care settings, using clinics to reduce admissions and provide more consistent management.
Additionally, the adoption of cardiac CT at some organizations has allowed for a more rapid MI rule-out for patients presenting with chest pain. Use of this technology alone can shave off 10 hours in length of stay, ultimately allowing providers to avoid an inpatient admission.
Programs are increasingly adopting technologies and practices aimed at coordinating care and keeping patients out of the hospital—perhaps good news from an efficiency and cost perspective. However, because of the substantial caseload here—for instance, 1 million heart failure admissions a year—we are going to feel the effects on the bottom line. We project heart failure inpatient admissions to decline by 14 percent over the next 5 years, and chest pain admissions to decline 27 percent.
For more information
For additional information on the drivers of growth, Cardiovascular Roundtable members may access The Blueprint for Growth and our Transcatheter Valve Technology Briefing. To receive five- and ten-year forecasts for your region, access our Inpatient and Outpatient Market Estimators.