BB&T Washington Editor

WASHINGTON — The cost of medical care holds such an increasingly central place in healthcare policy discussions that the World Health Care Congress, held here last month found a place for a discussion concerning how payers determine reimbursement — or not — for medical devices.

Ken Patric, chief medical officer at Blue Cross/Blue Shield Tennessee (BCBS/T; Chattanooga), gave an overview of how a modern Medicare and private insurance contractor decides what and how it will cover. The process, he indicated, is not always top-down. "Most of what we do is driven by our contracts with employers, Patric said, and "making sure everything we did is medically necessary. Medical necessity has typically correlated with clinical effectiveness, he said, but that employers are more commonly interested in cost-effectiveness. "You'll find mention of cost-effectiveness in those contracts, he said, accompanied by an "expectation of medical necessity.

However, such clauses are not cast in steel, he said. "If there's something more cost-effective than is ordinarily covered, you can cover that most of the time.

One change in this approach is greater emphasis on clinical effectiveness studies, traditionally involving a comparison of the use of a device vs. treatment with no device. A device-to-device comparison, though "more difficult, is becoming more common, he said.

Patric said that BCBS/T looks at many sources, including the Cochrane Library, an extensive medical database financed by the Cochrane Collection (Oxfordshire, UK). This database is designed to improve "healthcare decision-making globally by offering systematic reviews of the effects of healthcare interventions, according to the Cochrane website. The Cochrane Library, he said, "allows anyone who wants to contribute to it to give a complete review of a device or service ... but it has to review all the world's literature. He added, "In the U.S., we don't tend to publish negative results very often, but such data are available from other nations and included in the Cochrane Library.

Despite the seeming game-changing nature of such data, BCBS/T uses "the typical hierarchy of evidence, Patric said, including clinical trials and medical opinion, calling it "amazing how many times you don't get those large randomized controlled trials.

Coverage decisions are not necessarily constrained by exhaustive evidence, Patric said, but that coverage of therapies that lack a large body of clinical evidence must be championed by someone within the organization. "Our case managers are the most important part of how we approach this, he said, citing their expertise and influence, for instance, in the coverage of negative-pressure wound therapy, despite its being backed with only limited evidence. Wound management clearly "looked better than the alternative, such as "a very expensive surgery.

"We put a lot of stock into educating our case managers, Patric said, allowing them to make some decisions without going up the chain of command.

There are other pressure points on cost.

"The growing interest in cost effectiveness is based in part the decision by the Centers for Medicare & Medicaid Services to stop paying for "never events, a group of events that recently grew substantially larger. "That caused quite a stir in the commercial side of the business and most of us are moving toward that kind of policy, Patric said.

And Patric told Biomedical Business & Technology that payers are getting more creative with incentives for patients to be more proactive in their health. "Part of what's driving that is the high deductible plan, and that more and more self-funded companies want employees to have a knowledge base and give them incentives to stay healthy and become healthier.

IOM: geriatric onslaught poised to overwhelm U.S. healthcare

As the U.S. healthcare system braces for a flood of aging Baby Boomers, the Institute of Medicine (Washington) in mid-April sounded a shrill alarm: There simply won't be enough resources or healthcare workers to cover this geriatric boom without immediate action. The country is woefully unprepared in geriatric care skills, and the current healthcare workforce is not large enough to meet older patients' needs, according to the IOM. So, the agency has crafted a blueprint to confront the looming crisis with release of a report, "Retooling for an Aging America: Building the Health Care Workforce.

"We can't wait any longer. Given the demographic shift, virtually all healthcare providers need to be prepared to manage the common medical problems of old age, Carol Raphael, president/CEO of Visiting Nurses Services (New York) and a report co-author, told BB&T. "We don't believe we'll be able to produce sufficient geriatric specialists by 2030, so it's essential that all healthcare providers be prepared to manage aging people's needs. We do need to increase the number of geriatric care specialists for those with the most complex issues and then they should train everyone else.

Raphael is a member of the 15-member IOM Committee on the Future Health Care Workforce for Older Americans, which is charged with developing an action plan to confront the Boomer healthcare flood. Her reference to the year 2030 is tied to the fact that the largest-ever proportion of older adults will increase from 12% of the U.S. population in 2005 to almost 20% by 2030. But the influx begins sooner, in just three more years, when the first of these 78 million "boomers, born between 1946 and 1964, begins to turn 65.

The committee also calls on Medicare, Medicaid and other health plans to pay higher rates to boost recruitment and retention of geriatric specialists and care aides. The group targets the year 2030 for the necessary reforms to take hold.

Today's adults may be healthier and live longer, but they also tend to have more complex conditions and healthcare needs than younger patients, the report notes. The average 75-year-old American has chronic conditions, such as diabetes or hypertension, using four or more prescription medications. The committee found that dementia, osteoporosis, sensory impairment and other age-related conditions present provider challenges that aren't often encountered when tending to younger patients.

The IOM's work in the area of geriatrics isn't new — this is the 30th anniversary of its first report on the workforce for geriatric patients, titled "Aging and Medical Education.

The current committee is calling for a three-pronged approach to a solution:

• Enhance the competence of all individuals in the delivery of geriatric care.

• Increase the recruitment and retention of geriatric specialists and caregivers.

• Redesign models of care and broaden provider and patient roles to achieve greater flexibility.

Committee chair John Rowe, professor of health policy and management at the Mailman School of Public Health, Columbia University (New York), said, "The sheer number of older patients in the coming years will require trying new models for delivering healthcare and the commitment of greater financial resources. If our aging family members and friends are to live as robustly as they can and in the best health possible, we must have a work force of adequate size and competency to take care of them.

IOM reports a shortage of healthcare workers in all fields, and that the situatio is most critical in geriatrics because it attracts fewer specialists than other disciplines and experiences high turnover rates among direct-care workers such as nurse aides, home health aides, and personal care aides. Today, there are about 7,100 physicians certified in geriatrics in the U.S. Turnover among nurse aides averages 71% annually, and up to 90% of home health aides leave their jobs within the first two years.

Study: Laparoscopy lowers hospital-acquired infection risk

Ethicon Endo-Surgery (Cincinnati) reported that laparoscopic surgery reduced the risk of nosocomial, or hospital-acquired, infections by 52% when compared to open surgery in a study of more than 11,000 patients undergoing one of the following three surgical procedures: hysterectomy, gallbladder removal and appendectomy.

Specific to individual surgeries, the study found laparoscopic surgery was associated with reduction of the risk of nosocomial infections during gallbladder removal by 66%, and during hysterectomy by 52% compared to open surgery. The study showed the reduction rates of nosocomial infections during laparoscopic appendectomy were not statistically significant.

The results of the study were presented at last month's annual meeting of SAGES in Philadelphia and also was to be published in the April edition of Surgical Endoscopy, the society's journal.

Ethicon Endo-Surgery, a unit of Johnson & Johnson (New Brunswick, New Jersey), develops devices for both minimally invasive and open surgical procedures, focusing on conditions in general and bariatric surgery, as well as gastrointestinal health, gynecology and surgical oncology.

The company-sponsored study is the first to examine infections specific to these procedures 30 days post-discharge, providing what it said is "a more comprehensive picture of infection patterns than previously available. The authors reported that 40% of the infections identified occurred within 30 days after hospital discharge.

"This study gives more definitive evidence that laparoscopic surgery reduces the risk of nosocomial infection compared to open surgery, which may lead to improved patient care and potential reductions in costs to the healthcare system, said Andrew Brill, MD, director of minimally invasive gynecology at California Pacific Medical Center (San Francisco), one of the lead investigators for the study.

CMS's proposal for IPPS in fiscal '09 seen as 'aggressive'

The Centers for Medicare & Medicaid Services released its proposed reimbursement schedule for hospital in-patient prospective payment services (IPPS) in mid-April, and the reaction from industry hinted that the agency's position is seen as quite ambitious.

CMS did little tinkering with diagnostic-related groups (DRGs) — one of the few tweaks was a new DRG for replacement of leads in implantable defibrillators — but the agency has proposed adding nine hospital-acquired conditions (HACs) to the existing list of eight for which Medicare will not reimburse. The new total of 17 HACs includes infections to surgical sites, Legionnaires' disease, ventilator-associated pneumonia and two bacterial infections, including Staphylococcus aureus.

Another feature that is drawing a lot of scrutiny is the inclusion of more measures of hospital quality as part of the value-based purchasing (VBP) paradigm. As is the case with HACs, the additions more than doubled the original list, which was 30 and is now proposed at a total of 73. Among the new entries are a measure for surgical care improvement and three measures for readmissions.

Administrators at small hospitals may feel a squeeze on administrative staffing, but CMS was prompted in this direction in part by the Medicare Payment Advisory Commission, which has cited hospital readmissions as a conspicuous cost factor.

Those in the device industry are focused more on what is left out than on what is included. In an April 16 statement, Ann-Marie Lynch, executive VP for payment and healthcare delivery policy at the Advanced Medical Technology Association (AdvaMed; Washington), said the association is "pleased that ... CMS will complete the two-year phase-in of the MS-DRG patient classification system in the coming fiscal year, but added that the proposal "does not provide an immediate adjustment to address the longstanding issue of charge compression.

Lynch said CMS uses outdated data to calculate payments and "the proposal to modify the cost reports as put forth in this rule would not result in a change until fiscal 2012. She expressed a preference for "a regression-based adjustment for supplies [to] be implemented in FY09.

As for the hospital industry, even die-hard VBP fans are wary of the large number of new hospital quality measures. Blair Childs, senior VP for public affairs at the hospital consortium Premier (Charlotte, North Carolina), said in an April 17 statement that while the organization "continues to urge Congress to give CMS the authority to establish a full-scale pay-for-performance program ... care should be taken that the timeline for implementation is not overly aggressive. Premier member hospitals served as the test sites for the pay-for-performance project that is the basis for VBP.

David Allen, a spokesman for the American Hospital Association (AHA; Chicago), told Biomedical Business & Technology that the association sees the proposal as "a mixed bag. He said that AHA would encourage CMS to "slow down [on adding measures] and to go at a more measured pace to get to a full-blown version of VBP.

Regarding the proposed additions to the list of HACs, Allen said that some questions remain unanswered, such as "whether these will enhance patient safety inasmuch as there is a question in some situations as to whether an infection was present prior to the patient's admission.

CMS will accept feedback until June 13 and said it anticipates publication of a final payment schedule by Aug. 1.

Patent reform possibly sunk by damage apportionment fight in Congress

Moving a big bill through Congress is never easy, and patent reform — on the docket on Capitol Hill off and on for several years — has behaved much like a big bill. Signs earlier this year indicated that provisions for apportionment of damages might sink the current effort at patent reform in the Senate, and a couple of recent postings on Senate websites suggest that this has happened.

One of these postings was at the website for Sen. Patrick Leahy (D-Vermont), chairman of the Senate Judiciary Committee, saying that he is "disappointed that just a handful of words have stalled the Senate's debate on this important patent legislation. Leahy laments the "thousands of hours ... spent in negotiations to address the concerns of 100 Senators, hundreds of Representatives, and dozens of stakeholders.

Leahy's statement seems to take a swipe at opponents of the apportionment provision, saying that "the time for patent reform is now but that "unfortunately, some have yet to fully grasp this fact, and have stalled meaningful reform.

Sen. Arlen Specter (R-Pennsylvania), ranking Republican on the Senate Judiciary Committee, posted a statement on his website saying that he and Leahy "differ on a number of aspects of the proposed patent reform legislation, specifically "how to assess damages in patent infringement lawsuits. We thought we had reached an agreement on this matter, but the language continued to shift. He expresses hope "that we can reach an agreement, but more work has to be done to get it right.

The vastly differing views expressed by industry and other interested parties suggest that the light for patent reform has flickered out, especially given a heavy legislative calendar in the Senate, leading to August recess and Congressional elections after the summer.

While neither Leahy nor Specter stands for re-election until 2010, activity on Capitol Hill does not set speed records in such circumstances. And with a new Congress next year, the entire effort may hve to start from scratch in January.

New armed forces institute has a regenerative medicine focus

A new institute dedicated to repairing battlefield injuries through the use of regenerative medicine is in the works, thanks to a $42.5 million government-sponsored grant. It was reported last month that the U.S. Army Medical Research and Materiel Command, the Office of Naval Research, the U.S. Air Force Office of the Surgeon General, the Department of Veterans Affairs and the National Institutes of Health are establishing the Armed Forces Institute of Regenerative Medicine (AFIRM). AFIRM will be a collaborative virtual institution working in conjunction with the U.S. Army Institute of Surgical Research.

The Cleveland Clinic and Rutgers University (New Brunswick, New Jersey) will lead one of two civilian research AFIRM consortiums. Cleveland Clinic said it is slated to receive more than $10 million of the $42.5 million award. Wake Forest University Baptist Medical Center (Winston-Salem, North Carolina) and the University of Pittsburgh will receive another $42.5 million in funding to manage a second AFIRM consortium.

The mission of AFIRM is to accelerate the development of new technologies in the field of regenerative medicine and tissue engineering to treat injured service members. The R&D of new therapies will focus on the regeneration of bone, muscle, tendon, nerve and blood vessels, as well as new methods for transplantation of limb and facial tissue and the treatment of burns, Cleveland Clinic said.

In addition to treating wounded soldiers, therapies developed by AFIRM will also benefit civilians with burns or severe trauma. Regenerative medicine uses living human cells, including stem cells, to repair or replace body tissue damaged by injury, disease or aging.

DoD artificial limb research sets new objectives for 2009

With the carnage of war comes a need for artificial limbs, and the Department of Defense (DoD) is, for obvious reasons, the primary funder of medical devices for the federal government. Thus, the Defense Advanced Research Projects Agency (DARPA) recently reported its 2009 objectives for artificial limbs.

According to a recent article in Force Health Protection and Readiness, DARPA's Revolutionizing Prosthetics initiative was launched in 2005 to replicate the strength and dexterity of the natural limb. Revolutionizing Prosthetics 2007 is a two-year program aimed at developing a neural interface for a prosthetic arm, which "increased range of motion, strength, endurance and dexterity, and is easy to learn to use.

The successor program, Revolutionizing Prosthetics 2009, "will create a neurally controlled artificial limb that will restore full motor and sensory capability to upper extremity amputee patients, according to the article. The newer prosthesis "will be controlled, feel, look and perform like the native limb, and DARPA hopes that "at the end of the four-year program, the resulting prosthesis will be ready for human clinical trials.

Researchers hope to produce an artificial limb that "will be able to function as well as a normal human arm, and have the ability to "sense the position of the arm and hand relative to other parts of the body and pick up signals for "touch, temperature and vibration.

Dingell says FDA chief not doing his job on inspections

A senior lawmaker charged last month that FDA commissioner Andrew von Eschenbach isn't doing his job and hasn't requested enough money to inspect overseas drugmakers. Rep. John Dingell (D-Michigan), chairman of the House Energy and Commerce Committee, pointed his finger at von Eschenbach and repeatedly asked him how much it would cost to do more inspections.

Dingell objected when the commissioner didn't provide specifics.

Dingell and other lawmakers said the FDA must conduct more inspections of companies sending drugs to the U.S. to ensure they are safe. Lawmakers cited deaths and allergic reactions linked to contaminated versions of the blood-thinner heparin from China and described other tainted products, including toothpaste, that were shipped to the U.S.

"You cannot do your job, you are not doing your job,' Dingell told von Eschenbach, who was a witness at the hearing before the energy and commerce panel's investigations subcommittee. "You simply are absolutely incapable of addressing your responsibilities.

Von Eschenbach said the FDA is doing more overseas inspections than ever before, although he agreed with lawmakers that still more are needed. He repeatedly said the U.S. must take other actions as well, adding that more frequent inspections wouldn't have detected the tainted heparin.

"In addition to addressing the need to increase our inspections we also need to overhaul the entire system, von Eschenbach said.

The FDA is trying to improve the safety of drug imports by increasing collaboration with regulators overseas and stationing agency employees in China and other countries, he said.

The FDA currently conducts annual inspections of about 7% of overseas drugmakers that ship to the U.S., a pattern suggesting it would take 13 years to visit them all, according to the Government Accountability Office. Domestic firms are inspected an average of once every 2.7 years.

At least 80% of all active ingredients used by U.S. manufacturers to produce drugs are imported, according to lawmakers.

The FDA said it plans to station employees in three Chinese cities — Beijing, Guangzhou and Shanghai — to inspect food and drug facilities and assist the country's regulators, von Eschenbach said at the hearing. One FDA employee will begin a temporary assignment in China in May.

AdvaMed's Ubl lauds home monitoring bill from Eshoo

Stephen Ubl, president/CEO of the Advanced Medical Technology Association (AdvaMed; Washington), praised last month's introduction of the Remote Monitoring Access Act by Rep. Anna Eshoo (D-California). "What was once only science fiction is now patient care reality. With remote monitoring technologies, a physician can evaluate and manage complex chronic diseases from remote locations and provide real-time care for patients. [But] adoption and widespread diffusion of such innovations have been stymied by antiquated reimbursement systems.

Ubl said that the act means that "physicians may finally be reimbursed for the remote care they provide for elderly, disabled and rural patients, and encourage further use of these lifesaving and life-enhancing technologies that improve patient care and reduce costs.

He said the legislation will require Medicare to cover remote monitoring that will help manage patients with congestive heart failure and cardiac arrhythmia and "work with stakeholders to develop a standard of care for using remote monitoring for those conditions.

InHealth sets $10M goal for device/diagnostics research

The Institute for Health Technology Studies (InHealth; Washington) has launched a capital campaign to raise up to $10 million in funding to advance its mission of sponsoring evidence-based research concerning the value and impact of medical devices and diagnostics. The campaign, which will extend through 2009, was reported at the AdvaMed annual meeting in March in La Quinta, California.

The campaign's "quiet phase has already secured $4.2 million in pledges. Donors include original funders Johnson & Johnson (New Brunswick, New Jersey); Stryker (Kalamazoo, Michigan); St. Jude Medical (St. Paul, Minnesota); the C. R. Bard Foundation (Murray Hill, New Jersey); BD (Franklin Lanes, New Jersey) and the Edwards Lifesciences Fund (Irvine, California).

InHealth was founded with unrestricted donations from leaders of the medical technology industry, whose vision was to establish an independent, non-profit organization to fund objective, peer-review quality research and analysis on the impact and value of medical technology.

In 2008, InHealth said it will award at least five new research grants totaling up to $1.5 million and organize new educational forums. It plans to launch the next generation of its website, designed to bring together an interactive community of those with an interest in med-tech innovation and provide news, research and information on its impact.