on December 21, 2010 |
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Topics: Spine, Orthopedics, Service Lines, Spine, Neurosciences
The front page of yesterday's Wall Street Journal contained the story of a handful of spine surgeons in Louisville, Kentucky that have been among the highest performers of surgery on Medicare patients while at the same time receiving millions of dollars in royalties from the medtech industry. The story was picked up quickly, rolling down the avenues of countless industry sites and health policy blogs. Having several aspects that fit nicely into the contemporary dialog of health care--overutilization of premium services, influence of industry, high-costs alongside lucrative practices--it's not surprising that this story would generate such buzz. At the same time, it's useful to unpack the pieces presented and consider the general state of spine care in this country. To that end, our Technology Insights team has looked closely at the story at have highlighted the central threads it reveals:
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Spine surgery has risen considerably in volume and cost
One of the most interesting pieces that The Wall Street Journal uncovered was the huge expense that the government has incurred from spine surgery. Their analysis showed that spine fusion went from costing Medicare $343 million in 1997 to $2.24 billion in 2008, a 400 percent increase after being adjusted for inflation. Looking at that rate relative to volume growth over the same time period is especially striking. Through the national inpatient data set, total volume growth has grown by just over 100 percent across those years, suggesting that the per-procedure cost increases have been considerable: growing nearly four times as fast as overall volumes.
The faster rate of cost growth relative to volume growth has also been analyzed by the government. The Agency for Healthcare Research and Quality (AHRQ) published a study earlier this year that demonstrated the cost of spinal fusion grew at twice the rate of volumes from 2004 to 2007. Many factors can be attributed to these increases, but certainly the increased use of expensive implants must be considered a major factor.
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Spine supply costs have grown in multiple directions
The Wall Street Journal article quotes Dr. Charles Rosen as saying "you can easily put $30,000 worth of hardware into a patient when during a fusion surgery." This is indeed possible; we've seen supply costs for spine grow due to the range and volume of products used as well as the stubbornly steep price for all devices.
When fusion was first being performed, the instrumentation largely consisted of rods and screws; today it is not uncommon for a surgeon to use interbody fusion devices (cages), bone void fillers, bone morphogenic proteins, and other osteobiologics, while still using the same rods and screws from years past. Meanwhile the per-unit cost of the devices continues to rise.
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Though relatively small, the role of surgery in spine care remains murky
Alongside the rise in volumes, increase in costs, and expansion of technology, the clinical application of surgery remains controversial. The Wall Street Journal cites several studies that undermine the use of surgery in certain cases, and this debate will continue for the foreseeable future.
It's important to keep in mind, however, that the overall rate of surgery relative to the patient population is pretty low. Many programs mention that less than 1 in every 10 patients seen in their facilities will ultimately receive a surgical intervention; these programs are actively building protocols and care pathways to manage back pain patients conservatively--through pain management or physical therapy--and to incorporate surgery only in a smaller subset of patients.
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Payers are giving more scrutiny to coverage for spine surgery
With all these factor playing a role in the market for spine care, it's no surprise that insurers are taking a closer look at coverage policies. The Wall Street Journal article mentions the recent decision by Blue Cross Blue Shield of North Carolina to not provide surgery for patients with degenerative disc disease. That decision was among the most restrictive, but other payers have instituted measures to restrain spine surgical growth. Whether through pre-validation, education, or restrictions on designated centers, there are a number of methods that programs can use to conserve spine surgeries to only the most appropriate patients. We covered it earlier this year in the Pipeline, and continue to follow the developments in the payer market to the best of our ability.
None of these trends in spine care are unique to Kentucky. We in Technology Insights have worked with countless programs on the development of new spine programs, managing the costs of existing ones, and operationalizing key aspects (such as pain management) for evolving comprehensive programs. The questions are challenging and controversial, but we are here to help navigate them.
