Chances for a Medicare reform bill in this session of Congress among the myriad choices circulating offices on the Hill largely boil down to reaching an agreement on the type of reform and how far the legislation goes toward giving private insurers some entrance to the system. The script for reform was outlined last month by two Congressional staffers most knowledgeable about existing bills and any future legislation that may be introduced. Attendees at the Advanced Medical Technology Association's (AdvaMed; Washington) conference, "The Future of Medicare Policy for Medical Technologies," got to hear the most updated information from them on where Medicare legislation stands in both the House and the Senate.

Despite a pledge by Republican House members that it will send a bill to the Senate by sometime this month, and matched by a Senate pledge to pass legislation by Labor Day, the question remains as to what type of reform and its reach in scope and type of competition will emerge. Senate Finance Committee staffer John Blum, representing the Democratic members' viewpoints, told the group of about 150 attendees that it will be a "long, hot summer" on the hill, alluding to a battle likely to be bitter and pitting bills from the Senate and the House against each other. "Sen. [Bill] Frist [R-Tennessee] said ... that the stars were aligned for a Medicare reform bill to pass Congress, so the stage is being set between the majority viewpoint and the administration [vs.] the Democrats," Blum said.

"The prevailing consensus from the Republicans and the administration is that the bill will involve a $400 billion appropriation over 10 years, and that's simply not enough to cover a prescription drug benefit as well as cover the costs of implementing a private sector component to the program," he said. Blum added that he was speaking on behalf of the ranking Democratic member of the Finance Committee, Sen. Max Baucus (D-Montana).

House staffer Deb Williams, however, representing the Ways and Means Committee's Republican members, disagreed with Blum's forecast. She likened it to the Chinese government's view during the Vietnam war that it would sacrifice soldiers until the bitter end to win victory. "No matter what figure is put before [the Democrats], it won't be enough," quipped Williams, who added that any benefit, however large or small, would be beneficial to the nation's seniors.

The Republican proposal for Medicare reform, which is funded primarily through a proposed tax cut measure totaling $400 billion for a Medicare prescription drug benefit, includes too many additional measures, Blum said. "All the ideas for Medicare reform, from a prescription drug benefit to cost-sharing proposals for parts A and B, to disease management components and a higher involvement from private insurers, are on the table," he said. "But some will conflict with others and will have to be dropped. Most, however, agree on a prescription drug benefit."

The most-contested aspects of Medicare reform, predicted Blum, would be over the role private insurers are likely to play in a reform piece of legislation. "Sen. Baucus is concerned that the Republican proposal would encourage more private insurers to compete in the program, and there's convincing evidence from the Congressional Budget Office that private insurers won't go into rural areas," he said. The Democratic proposal, he said, is to focus on the prescription drug benefit. "We should try to fix the existing fee-for-service component and add a prescription drug benefit before welcoming in the private insurers."

Existing regulations on fee-for-service penalize hospitals that adopt or add new technologies as a service, Williams countered. "What's needed is a better, more accurate payment for the technologies that are out there," she said.

The likely legislation to endure the long hot summer will incorporate portions of both Democratic and Republican philosophies, but the battleground will land squarely in the Senate Finance Committee's hands, said Steve Ubl, executive vice president of federal government relations at AdvaMed. "From what we've seen so far, it looks a lot like last year."

Blum warned that the Republican proposal, if passed as is, would create gaps in the program. "The $400 billion isn't enough for a prescription benefit, at least nothing like you or I probably have. It will create gaps in other areas of coverage, and once seniors finally see it, they will have sticker shock. It's a stingy benefit," he said. Democrats are worried that a proposal incorporating private insurers would alter the existing definition of fair competition. "If private companies are allowed into the system, does that mean they are competing against the existing fee-for-service program, and do private insurers pay more in terms of benefits than the fee-for-service rates?" Blum asked.

Implications of drug-eluting stents debated

Drug-eluting stents are becoming a reality in the daily practices of many cardiologists, but the much-touted technology isn't getting a warm reception in the nation's hospital boardrooms. The FDA's approval of the Cypher stent from the Cordis (Miami Lakes, Florida) subsidiary of Johnson & Johnson has the effect of a "perfect storm" for healthcare providers, said Bruce Chandler, executive vice president of Saint Joseph's Health System (Atlanta, Georgia). He was one of three panelists during a webcast presentation last month on the economic implications of drug-eluting stents. The webcast, sponsored by Clinsights (New York), dealt with the societal, clinical and hospital economic perspectives of the device.

"Hospitals are experiencing staff shortages, growing numbers of uninsured patients, healthcare inflation, reduced provider reimbursement and niche competition from specialty hospitals," Chandler said. "The drug-eluting stent is an evolutionary clinical contribution, but with only one product approved so far, the effects are impacting hospitals' bottom lines," he said, citing the monopolistic hold that Cordis has on the sector until other similar products reach the market. The stent's introduction will cost an estimated $3.5 million in unreimbursed expenses for his organization alone, Chandler said. "Even though Medicare assigned DRG codes for the stents, the program is budget neutral, so [the hospital] will make up the added expenses by cutting other areas. The pass-through payment system is not an overnight process," he emphasized.

Despite the clinical and quality of life improvements the device offers, hospitals will likely limit how many stents it will implant each year due to the added expense, Chandler predicted. "It's essential that hospitals renegotiate contracts with private payers quickly to recoup losses," he said. "If there's any message to the manufacturers, I would say that it should be to remove the variable in price for the stent in the U.S. Why should the U.S. pay more for the same product than Europe or Canada? Hospitals will have to be up-front with patients about the cost of the device and the amount the government pays it for the device."

James Hermiller, MD, director of the cardiac catheterization lab and co-director of the fellowship program at St. Vincent Hospital (Indianapolis, Indiana), said that cardiologists would have to be selective in placing the drug-eluting stents in patients. "The data so far indicate that the drug-eluting stents may not save in costs, but the quality-of-life savings is high. Cath labs will have to make adjustments in labor costs, indigent care and medical education," he said. Patients with the highest risk of restenosis and those with diabetes are more suited for drug-eluting stents, Hermiller added. "Cardiologists will have to consider lesion types, patient characteristics and prior history of therapy. We use the guideline of one stent between 15 mm and 30 mm for each patient suited for a drug-eluting stent. All the other patients get bare stents. They [drug-eluting stents] are not viable in patients who need five to six stents," he explained.

David Cohen, MD, associate director of interventional cardiology at Beth Israel Deaconess Medical Center and associate professor of medicine at Harvard Medical School (both Boston, Massachusetts), pointed to three types of costs associated with drug-eluting stents. "There are the direct costs, such as hospital, medical and diagnostic costs; indirect costs, such as lost productivity and caregiver costs; and non-economic costs, such as quality-of-life issues," according to Cohen's enumeration. Clinical trials may not be the best place to obtain cost data, he noted. "Clinical trial patients are highly selected patients. Data from Medicare standard analytic files are a better cross-section of those who would be getting these stents," he said. The drug-eluting stents may be more costly, but they do improve a patient's quality of life and improve life expectancy, so it can be said they are cost-effective, he argued.

"Using drug-eluting stents will actually save money in about half of the diabetic and a quarter of the non-diabetics they are placed in, but they are cost-effective for many more," according to Cohen. "We also need to consider that drug-eluting stents will save money in cases where ordinarily a [coronary artery bypass graft] was performed. About 25% of those will receive a drug-eluting stent instead."

The session was moderated by Bob Hopkins, senior medical device analyst at Lehman Brothers (New York), who posed the question to the panelists: "Is the economic situation created by the first drug-eluting stent that [the Centers for Medicare & Medicaid Services] didn't set the reimbursement high enough, [that] hospitals aren't as efficient as they can be, or [that] manufacturers set the cost too high?"

"The reimbursement should be higher from CMS. The price is justified given the benefit of the device," Cohen responded. "We will likely have to argue with payers to increase the payment rate. Otherwise, patients will yell at us." Until the situation levels out, cardiologists will have to find the most beneficial use for the devices and be frugal, said Hermiller. "There's no question that Medicare needs to improve, but any price in a monopoly is a profit for the manufacturer, and only until there is competition will the price be reduced," Chandler said.

One thing is for sure, Hermiller said. "The next stent [to receive FDA approval] will create good will in the cath lab."

Beating-heart option shows fewer deaths

Although drug-eluting stents offer a tremendous opportunity in fighting coronary artery disease, many patients still need coronary artery bypass surgery. And researchers at New York University Medical Center (NYU; New York) found that some high-risk patients who have no other option than undergoing bypass surgery fare better when the heart is allowed to beat during the procedure. Death rates among a trial involving 913 patients were cut almost in half when the heart is allowed to beat during surgery, the researchers found. The results of the study were presented last month during the American Association for Thoracic Surgery (Beverly, Massachusetts) annual meeting in Boston, Massachusetts.

"Despite recent advances in angioplasty and stenting, coronary artery bypass surgery is still necessary for hundreds of thousands of patients a year and this study demonstrates an approach for making the surgery safer in elderly, high-risk patients," said principal investigator Eugene Grossi. Grossi, professor in the department of surgery's division of cardiothoracic surgery at NYU, presented the study results.

Patients who underwent beating-heart surgery had a death rate of 6.5% compared to 11.4% of patients who had traditional stopped-heart surgery. The results could add credence to the practice of a growing number of surgeons who use stabilizing equipment to immobilize certain parts of the heart but allow it to continue beating during surgery. The controversial technique has been limited until now to low-risk patient groups. The beating-heart technique is still relatively new. More than 80% of cardiac surgeons in the U.S. still operate using a heart-lung machine to pump blood and oxygen through the body while stopping the heart.

Grossi is no stranger to medical technology in the operating room. He is the leading researcher at NYU using Intuitive Surgical's (Sunnyvale, California) da Vinci surgical system for coronary procedures in a clinical trial.

In addition to lower mortality rates in patients undergoing beating-heart surgery, the researchers found that hospital stays were shortened by two days with the beating-heart procedure. Patients also showed a decreased risk of stroke and postoperative complications vs. those who underwent the traditional stopped-heart surgery. Strokes occurred in 1.6% of the beating-heart patients compared to 5.7% in the traditional surgery group. Beating-heart patients had fewer surgical complications as well: 92% were free of complications vs. 80% of those undergoing traditional surgery.