Last week, the American College of Cardiovascular Administrators (ACCA) held its annual meeting in Chicago, IL. While sessions on physician integration and health reform served to kick off the meeting, several sessions on transcatheter valve devices provided a look into current experience and future potential--both good and bad--for this still investigational field. On the heels of ACC, where clinical results of the hotly anticipated PARTNER trial were released, much of the discussion at ACCA focused on future reimbursement and profitability for these procedures.
Debate Continues Around Reimbursement and Profitability of TAVI
Leaders in the medical device industry, hospital executives, physicians, and consultants gathered in the Grand Hyatt in Washington DC today at InHealth's 2011 Health Technology Summit. The purpose of the meeting was to discuss the macroeconomic climate in health care and how its pressures will determine the future of clinical technology innovation. Many of discussion points centered on the balance between value and volume. This balance, while rooted in the shifting payment methodologies in the delivery system, also emerged as a dynamic within the medical device industry. Academics, analysts, and industry reps emphasized that the 'new normal' in health care would make the demonstration of value pervasive through all aspects of the delivery system.
Dr. David M. Cutler, the Otto Eckstein Professor of Applied Economics at Harvard University, started of the day with a keynote address that introduced medical technology innovation within the context of the health care system this country has built across the past few decades. He began recalling the story of a heart attack suffered by President Dwight Eisenhower. The President suffered a heart attack while in office in 1955, and after the event was on bed rest for six weeks to recuperate. In the decades following the President Eisenhower's attack, the advances in clinical technology has enabled revascularization (through angioplasty and stenting, as well as coronary artery bypass grafting), such that patients suffering a heart attack recover faster, live longer, and have overall better outcomes. Dr. Cutler emphasized that though the cost of treating a heart attack has climbed dramatically, there is a clear, demonstrable benefit in health and longevity. Today, Dr. Cutler articulated, the advancements made in technology have lead to increasing complexities and, in correlation, the overuse of care. For that reason, the challenge for healthcare is to coordinate that complexity more effectively.
InHealth 2011: Value Versus Volume
This past week, an ambulatory surgical center in San Francisco performed the city's first outpatient, robotically-assisted knee replacement. The surgeon, Dr. Kevin Stone, used MAKO Surgical's RIO robotic system to perform a partial knee replacement. The MAKO robot system (which we've covered on the Pipeline previously here, and here), is fitting nicely into this overall story of outpatient joint replacement.
A topic of heated discussion in orthopedics research, outpatient total joint replacement is still a long way off from widespread adoption. At this time, only a small number of physicians are performing total joint replacement (TJR) surgeries on an outpatient basis, and these procedures are thereby taking place on an extremely limited scale. Only a small percentage of patients are potential candidates for a hospital stay below 24 hours, and instead of trying to segment out those patients, most institutions are focused on shortening length of stay (LOS) for all joint replacement patients.
Where outpatient joint replacement may make more sense is in the minimally invasive, bone sparing procedures used on younger patients, the exact same cases for which MAKO is being adopted. The technical challenges and need for precision in partial knee replacement make a strong case for robotic assistance, and has thereby generated great excitement for MAKO's platform (Just last week MAKO announced the establishment of 11 new sites from Health Management Associates, Inc.). MAKO, however, has yet to be widely adopted. The current install base is approximately 70 sites in the country, and with limited clinical data to affirm the robot's value proposition, many remain skeptical of the steep investment it takes to acquire the technology.
These limitations will likely continue to make both robotic and outpatient joint replacement a niche practice at the national level. Advances in these areas, however, would be troubling to hospitals for whom orthopedic surgery is a strong source of revenue. If outpatient TJR could be performed on a large scale, this change would have far-reaching implications for hospitals, which might see increased competition from ambulatory surgery centers and physician private practices. For now, this does not appear to be much of a risk.