Challenges and Opportunities for Cardiac Cath Labs: Focus on Health Economics of the Cath Lab

For cardiology practice or cardiovascular service line directors and administrators, the shift from volume to value is now very much a reality, particularly those considering signing up for Bundled Payments for Care Improvement advanced programs. In this article, we share some insights on the challenges and opportunities for cardiac cath labs for CV administrators and cardiovascular physicians.

This article is sponsored by Terumo Business Edge.

Heart disease remains the leading cause of death in the United States in 2018. Despite a decline in mortality from myocardial infarction, the incidence of heart disease is on the rise. By 2035, more than 130 million adults in the US (45.1 percent) are projected to have some form of CVD, and total costs of CVD are expected to reach $1.1 trillion, with direct medical costs projected to reach $748.7 billion and indirect costs estimated to reach $368 billion. These costs are unsustainable in the long run, and government and commercial payers are not only recognizing the unsustainable nature of these costs but are also definitively implementing programs to check these high costs of care. Cardiac cath labs continue to be challenged with an ever-rising wave of reimbursement changes.

Hospital margins are poor. There are a myriad of reasons for this. First, reimbursement rate increases are generally below inflation rate. Second, there is continued upsurge in staffing and technology expenses that hospitals are forced to invest in. Third, as the aging population increases, government payers with very low reimbursement rates are covering a larger proportion of overall business. Government payers comprised 55 percent of gross patient revenue in 2006 but increased to 61 percent in 2016. Fourth, private insurance carriers are gradually lowering their coverage or changing policies and practices around coverage for services such as outpatient imaging. Lastly, hospitals are also seeing contracting with insurers get more difficult, as these payers want to pull back on reimbursement rates. For these reasons, hospital margins with both governmental and private payers are continuously declining. Rural or community hospitals face the brunt of these pressures, especially in markets experiencing Medicaid cuts or where commercial payers are on the ebb and mergers and acquisitions of hospitals are anticipated. In this setting, how efficiently a cathlab is run could make a big difference to the overall CV service line and the hospital. Nationally, cardiovascular care contributes 20 percent to 60 percent of the operating margins for hospitals. Therefore, profitable cathlabs could be a large driver for overall hospital margins.

Despite declining reimbursements, hospitals demonstrate inefficiencies resulting in rising costs of delivering care in the cath lab. Inefficiencies in the cath lab obstruct workflow and cost hospitals hundreds of thousands of dollars each year. Poor patient flow is one of the biggest drivers of hospital inefficiency. Dealing with a large number of patients moving in and out of the hospital, and from one department to another, inevitably leads to patient flow issues. Hospital readmissions and longer lengths of stay, incomplete medication reconciliation, inadequate communication methods and duplicate documentation requirements, which prevent clinicians from spending more time with patients, are all contributors of higher hospital costs.

Cardiac cath lab optimization impacts a large patient population, improves quality of care and patient outcomes and reduces the total cost of patient care. There may be no other area of clinical medicine that better aligns the interest of today's healthcare requirements for success. The transradial care pathway program is perhaps the most focused, achievable and significant opportunity healthcare systems can pursue to achieve success today. A study of Medicare claims data linked to the nearly 280,000 patients who underwent PCI between July 2009 and December 2012 in the US NCDR CathPCI Registry showed that a modest 30 percent shift from femoral-access PCI to transradial-access with same-day discharge for stable patients undergoing elective PCI could save US hospitals about $332 million annually. In this study, transradial-access PCI was also associated with fewer complications than a transfemoral approach, consistent with prior randomized and observational data. The healthcare marketplace is evolving and studies such as these fundamentally transform how we practice and change the delivery of PCI care.

Optimizing care in the cath lab alone is not sufficient. Cath labs and hospitals need to brace for the shift from inpatient to outpatient PCI as well. There has been a constant upward trend in the shift from inpatient to outpatient PCI and hospitals are observing a constant shift in patient volume from inpatient to outpatient care, which has lower and capped reimbursement. Hospitals are not efficient in taking care of these outpatients could experience lower margins. Furthermore, mergers between insurance providers and large employers are also occurring at a rapid pace. Amazon is venturing into the healthcare industry by partnering with JPMorgan Chase & Co. and Berkshire Hathaway to launch an independent healthcare company that is free from profit-making incentives and constraints. A merger between CVS and Aetna, Cigna with Express Scripts, or Walmart, the world's largest retailer, with Humana could all result in large shifts in patients at primary care practices, traditional providers and even cath labs.

The healthcare marketplace is transforming and care pathways and solutions that focus on standardizing the clinical delivery of care and improve patient outcomes and quality will bring profitability to cath labs. Organizations need to proactively prepare for these healthcare challenges of federal health policy and competitive marketplaces in a realistic and practical manner to better sustain these looming challenges.

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