The outlining of the new federal budget for fiscal 2007 has produced a variety of reactions, plaudits from the few seeing increases, brickbats from those feeling gored by the proposed reductions – the latter, of course, making loud complaints. Among those expressing particular alarm are providers of imaging services in physicians offices and freestanding centers. The cuts involve what is called the “technical component” payment, that is, what is paid for all services pertaining to performing the imaging procedure, including technician and equipment costs. It will impact various advanced modalities, from MRI to positron emission tomography, in non-hospital settings, and these providers say the reductions will cause them significant difficulty.

Among these, Radiologix (Dallas) – which reports that it derives about 25% of its imaging center income from Medicare – said that if the cuts had been in place during calendar year 2005, they would have reduced the company’s revenue by about $13.3 million. Randy Fuller, hospital segment manager for GE Healthcare Financial Services, told BioB&T that the reductions, “from our standpoint, are not totally unexpected.” He described the cuts as an attempt to “level” the playing field between hospital and non-hospital centers, but will mean “from 3% to 4% to 5% off the bottom line” for the non-hospital providers. “It’s a fairly significant impact on most of those providers,” he said, adding that they will need to find creative ways to deal with it.

The large providers will be best able “to manage their way out of this,” he said, by broadening their offerings, but he added that “the lower end of the market is going to be pretty challenged.” These include “providers not doing very well to begin with and those that don’t have a lot of market presence to leverage to increase their position.”

Fuller noted the large benefit of diagnostic systems such as MRI and computed tomography to better assess medical problems and avoid unnecessary biopsy procedures, but also that the larger costs of these modalities have drawn the attention of the Centers for Medicare & Medicaid Services (CMS; Baltimore) and other reimbursement systems. GE Financial, he noted, keeps assessing these conditions as “an area we’d love to help them with. We can look at how we could support them and their needs.”

Some specifics of the cuts:

• The Deficit Reduction Act provided for the technical component to be capped at the lesser of reimbursement under the Medicare Part B physician fee schedule or the Hospital Outpatient Prospective Payment System (HOPPS) schedule. Currently, the technical component of these non-hospital imaging services is reimbursed under the Part B physician fee schedule, generally allowing for higher reimbursement than under the HOPPS. Under the DRA, these facilities will be reimbursed at the lower of the two schedules as of Jan. 1, 2007.

• The DRA also codifies the reduction in reimbursement for multiple images on contiguous body parts previously announced by the CMS.

• CMS in November said that it would pay 100% of the technical component of the higher priced imaging procedure and 50% for the technical component of each additional imaging procedure for imaging procedures involving contiguous body parts within a family of codes when performed in the same session. Under current methodology, Medicare pays 100% of the technical component of each procedure.

CMS will phase in this rate reduction over two years, so that the reduction will be 25% for each additional imaging procedure in 2006 and another 25% in 2007.

Asian imaging sector to see strong growth

Frost & Sullivan (F&S; Palo Alto, California) outlined research from its report on growth prospects for digital X-ray modalities in Asia last month, suggesting that the market for the two types of digital X-ray – digital radiography (DR) and computed radiography (CR) – would reach about $700 million by 2012, compared to $313.6 million in 2005. Digital X-ray, the conversion of X-ray to digital images without the use of film, “produces digital images directly after X-ray exposure,” said F&S; research analyst Subha Basu, who made the presentation over via both conference call and webcast. CR captures X-rays onto cassettes, “which are then read by a laser,” he said.

“Some of the hot topics for the Asian markets include reimbursement rates, where medical facilities in China, especially, are encouraged to incorporate digital X-rays instead of film,” Basu said, noting that a population of more than 1 billion people and 15,000 hospitals requires “workflow efficiencies and throughput.”

In light of the large population, he noted that the Chinese government reimburses radiologists at higher rates for digital images, because it allows more people to be examined per day. In the Asian markets, Basu said it is common that local distributors use foreign-made digital detectors in order to leverage their distribution networks.

“This provides ample sales avenues for extensive local sales distribution networks while also bypassing international trade costs associated with foreign commerce,” he said. “Healthcare facilities also benefit by having high-end and low-end ranges of digital X-ray solutions that can cater to each hospital’s individual needs.”

Part of the need for the transition to digital X-ray is being driven by dense populations in Asian countries. These “booming markets,” according to Basu, have been “constantly increasing in the last five years.” This naturally leads to high utilization of healthcare services, and it is typical for some facilities to have as many as 100 patients a day for “simple X-ray procedures such as chest and extremities.” Another factor he pointed to is expectation of more advanced service and technology by wealthy clients in many Asian countries, and willing to pay higher prices to get the advanced care.

Countries that are part of the population boom, including China, South Korea, Japan, Hong Kong and Taiwan, “all have the capital and the digital X-ray infrastructure to readily adopt DR or CR,” Basu said. “These technologically advanced countries already have electronic information management systems . . .installed in medical clinics and hospitals,” he noted. “Additionally, [the] respective governments are willing to invest in the cost of DR or CR systems for long-term ROI and cost savings.”

Among the major challenges to Asian countries’ adoption of digital CR is the fact that governments are the largest buyers of technology, which “makes the transition to digital environments more challenging,” Basu said. Depending on a government’s particular healthcare policies, that will affect how technology is acquired. However, he noted that China’s particular healthcare policies have “fueled large sales across Asia,” as that country seeks to move toward international standards.

A second challenge to adoption is the fact that “increased [information technology] infrastructure is required in most Asian countries to fully implement” DR or CR technology. That requirement for improved infrastructure will also impact the adoption of other digital imaging modalities, including computed tomography (CT), MRI or positron emission tomography (PET), Basu said.

Still another challenge is the reality that most patients and administrative activities are “still managed in paper form,” he said, so they will require “lengthier lead times” for adoption in order to incorporate electronic data storage.

Finally, the “high initial prices” of DR and CR are a barrier to widespread market penetration. “As you can imagine, the currency trade ratios made the economic impact of digital solutions nearly five to 10 times more expensive in Asia than in Western countries,” Basu said.

Drivers of the newer technologies include the wider adoption of digital X-ray and “lower production costs and greater distribution networks” for these systems. This results in some average selling prices two to three times cheaper for local vs. foreign systems, he said. Another driver is Japan’s influence over the region through its own practice of “constantly buying or upgrading CR medical systems each year.”

Among the leaders in DR cited by Basu are GE Healthcare (Waukesha, Wisconsin), Siemens Medical Solutions (Malvern, Pennsylvania) and Philips Medical Systems (Andover, Massachusetts). Leaders in CR include Fujifilm Medical Systems USA (Stamford, Connecticut) and Eastman Kodak (Rochester, New York).

CDC develops rapid test to detect avian flu strain

The FDA last month reported the approval of a new laboratory test, developed by the Centers for Disease Control and Prevention (CDC; Atlanta), to diagnose H5 strains of influenza in patients suspected to be infected with the virus.

The test, named Influenza A/H5 (Asian lineage) Virus Real-time RT-PCR Primer and Probe Set, provides preliminary results on suspected H5 influenza samples within four hours once a sample arrives at the lab and testing begins. Previous tests require at least two to three days to render results. If the presence of the H5 strain is identified, further testing is conducted to identify the specific H5 subtype (e.g., H5N1), according to the FDA.

“We’ve been working on developing the test for some time, because having a rapid diagnostic test for H5 is vital for a public health response and identifying the potential cases of bird flu or influenza viruses of Asian lineage,” Jennifer Morcone, a CDC spokeswoman, told Biomedical Business & Technology. In a follow-up e-mail, she said the test had been in development over the past two years.

Morcone added: “This tests detect the presence of a very small amount of the H5 virus or the Asian lineage influenza A virus material from a clinical sample of nose or throat swab with very high sensitivity.” She described the sensitivity as being able to detect “as low as 100 copies of virus genes, or even less.”

Since December 2003, more than 160 human cases of avian flu caused by the H5N1 strain of influenza have been reported in Thailand, China, Vietnam, Cambodia, Indonesia, Turkey and Iraq. More than half of the people infected with the H5N1 virus have died, with nearly all cases believed to have been caused by exposure to infected poultry. The concern is that H5N1 will evolve into a virus capable of human-to-human transmission and lead to an influenza pandemic.

Morcone told BB&T that the test tests only for the H5 virus, but not down to the “N1” level, or the particular strain of the H5 virus. However, prior to development of the CDC’s test, a clinical sample would have to be taken and grown in culture, with the results taking “several days to weeks, depending on the test.”

The test is available now, Morcone said, and the CDC is deploying it through the agency’s Laboratory Response Network (LRN).

MRI used to ID transplanted heart rejection

Carnegie Mellon University (Pittsburgh) researchers, led by Chien Ho, PhD, have developed what they call a “promising tool” that uses MRI to track immune cells as they infiltrate a transplanted heart in the early stages of organ rejection.

The preclinical advance, published online in the Proceedings of the National Academy of Sciences (PNAS) on Jan. 23, could provide a non-invasive way to detect transplant rejection by tracking macrophages as they gather inside a transplanted heart, the university said.

Ultimately, the procedure, which allows scientists to view individual macrophage cells – or those cells that typically ingest foreign materials inside the body, such as bacteria – could potentially be used to track stem cells within the body after they have been injected and as they make their way to repair an injured organ, Ho told BB&T.

“We report for the first time the ability to monitor single immune cells in a live animal using MRI,” Ho, a biological sciences professor at the university, said in a statement. “This could revolutionize the management of transplant patients.”

Ho, who directs the Pittsburgh NMR Center for Biomedical Research, said “Successful translation of this work to the clinic ultimately will reduce the number of biopsy procedures and should greatly improve the quality of life for cardiac transplant patients, especially children.

Perhaps more importantly, the university said, the research could be used to enable physicians to provide “highly personalized care” in order to prevent transplant rejection.

While organ transplantation is the current “gold standard” for addressing end-stage organ failure, transplant patients always risk losing the new organ due to rejection, the university said.

Frequent biopsies are required for the first year after transplant, and it is a highly invasive procedure. The university said that such biopsies “involve threading a catheter through the jugular vein to the heart’s right ventricle and snipping out several fragments of tissue.” That tissue then has to be evaluated by a pathologist to identify immune cells, such as macrophages, and any other pathological changes in the new heart that might indicate it is being rejected by the body.

Premenopausal diabetics need screening

A new study published in the February issue of Diabetes Care shows that premenopausal women who have Type 1 diabetes should strongly consider preventive screening for osteoporosis, according to the researchers. The study found that those women exhibited lower bone density and more fractures than women who did not have diabetes, even though those with diabetes were more likely to take bone-active osteoporosis medications and vitamin D supplements. Both groups of women exercised a similar number of hours per week.

According to lead researcher Elsa Strotmeyer, PhD, assistant professor in the department of epidemiology at the University of Pittsburgh, the study was only in women and it looked at bone density in Type 1 diabetic women compared to non-diabetic women who are at the same age. “There have been several prospective studies that have found that Type 1 diabetic women who are older have a greater risk for fracture, so we hypothesized that this might be due to lower bone density at an earlier age in these women,” Strotmeyer told BB&T.

Previously, as was noted in the study, “The impact of the menopause transition on osteoporosis in Type 1 diabetes is now well established.”

The 67 women in the study were aged 35-55 years with Type 1 diabetes and 237 without diabetes. “All participants were part of a volunteer subgroup from the ProHealth Study, a prospective study to determine whether menopause occurs at a significantly younger average age among Type 1 diabetic compared with non-diabetic women,” the study said.

According to the paper, “Total hip, femoral neck, whole-body and spine BMD were measured by dual X-ray absorptiometry. Calcaneal broadband ultrasound attenuation was assessed with quantitative ultrasound.” All of the equipment used in the study was from Hologic (Bedford, Massachusetts), Strotmeyer said, including the Dexascan for bone mineral density.

AAA screening wins some coverage

Congress has passed legislation that includes Medicare patient coverage of a one-time ultrasound screening for abdominal aortic aneurysms (AAAs), frequently called “the silent killer,” with burst aneurysms taking about 15,000 lives annually in America without any warning symptoms. Key provisions of the Screening Abdominal Aortic Aneurysms Very Efficiently Act (SAAAVE) were part of the final budget reconciliation package signed by the president.

The legislation was first introduced in 2004. Patients at risk for AAA will receive the benefit as part of their “Welcome to Medicare” physical. The covered patient population includes men age 65 and over who have smoked more than 100 cigarettes in their lives, plus women with a family history of AAAs. Coverage will begin in early 2007. The SAAAVE Act was sponsored by Christopher Dodd, (D-Connecticut) and Jim Bunning (R-Kentucky) in the Senate, and John Shimkus (R-Illinois), Ron Lewis (R-Kentucky) and Gene Green (D-Texas) in the House.

“This is a tremendous step forward and a great victory for patients at risk for life-threatening abdominal aortic aneurysms,” said Robert Zwolak, PhD, professor of surgery at Dartmouth Medical School (Hanover, New Hampshire) and chairman of the National Aneurysm Alliance (Washington) and instrumental in pushing for the legislation.

Medtronic (Minneapolis) – which through its charter affiliation with the National Aneurysm Alliance has been providing free screenings for AAAs since 2004 – also lauded the bill. The company said that over the past two years, more than 18,000 people have been screened at 135 locations around the country, and more than 400 potentially life-threatening AAA conditions have been detected.

“We need to remain vigilant in addressing this problem because so many lives are at stake,” said Scott Ward, president of Medtronic Vascular (Santa Rosa, California).

Study: Market growing for needle-free alternatives

The market for needle-free injection systems and safety syringes continues to grow – with some sectors growing in excess of 20% annually – and should reach $2.49 billion by 2009, according to a new study from Kalorama Information (New York), a division of, a provider of industry-specific market research reports.

The study predicts that the costs associated with needlesticks – costing institutions more than $3,000 per injury even when no infection occurs, coupled with other factors, such as patient fear of needles and the resulting lack of compliance – are strong enough drivers to grow the market by a compounded annual rate of 11% over the next four years. Estimates indicate that as many as 80% of the incidents could be prevented with the use of needle-free devices and safety syringes.

“With newer injectable drugs coming to market and incidences of diseases requiring injectables, such as diabetes, escalating worldwide, the need for safer devices will continue to grow the market,” said Joseph Constance, the report’s author.

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