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The Cath Lab is Full of Cost-Saving OpportunityGary Clifton, Vice President, Terumo Business Edge

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Article reprinted with permission from Cath Lab Digest April 2018, Vol. 26, No. 4 ©2018 HMP

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10 C A T H L A B O P E R A T I O N A L E F F I C I E N C I E S : E X P E R T A D V I C E A P R I L 2 0 1 8

We are clearly on the precipice of what is, and will be, a de-fining time in the delivery of

healthcare in the United States. We are not alone in our journey, as many health-care systems around the world are strug-gling with how to deliver more with less. Healthcare and its associated costs are a major topic of discussion in the United Kingdom, as they struggle with a severely underfunded National Health Service (NHS). Japan’s National Health Insurance (NHI) has enacted measures to close its funding gap in an effort to continue pro-viding government-funded healthcare to all its citizens. And India, arguably the largest potential healthcare system in the world, is currently discussing providing government-funded healthcare to an ad-ditional 500 million citizens. Yes, that’s “million”! And these are only a few of the many countries struggling with large economic challenges in healthcare.

So, where is the discussion leading? We must get this figured out and start looking at the data. In the U.S., our sin-gle biggest cost in delivering healthcare is labor, estimated to be between 50-60% of a hospital budget, followed by

facility service contracts and products. When surveyed, healthcare leaders con-tinue to point to reducing unwarranted care variation as a goal for reducing costs and improving quality. A Google search is replete with offerings and academ-ic discourses on why this is important and how it can be achieved. As notable statistician W. Edwards Deming stated, “Uncontrolled variation is the enemy of quality” (from his book, Basic Statistical

Tools for Improving Quality). So, if there is so much evidence as to the why, why are we not seeing a greater effort in our processes and care delivery of the cardiac cath lab patient? (Because it’s not easy and everyone has a day job.)

The issue is clear: hospital staff need to become part of the solution. For hospitals, their costs have officially exceeded their reimbursements in 2016.1 Hospitals con-tinue to face increased pressure to boost efficiency and increase productivity, while at the same time, they continue to bar-gain with health plans and face declining payments.2 In many hospitals, the cardiac service line is the top revenue-generating service line; certainly, it is one of the top three. But maybe not always the most profitable. The cath lab is undoubtedly one of the more dynamic procedural/pa-tient care areas in the hospital and faces challenges with profitability. Let’s look at some potential reasons why. How can we address the cath lab specifically?

First, in Figure 1A-D, provided by Archway Health, we can see the distri-bution by state for the average episode

payment by Medicare. Even more com-pelling is the interquartile range and what is obviously significant variability. For the purposes of comparison, we have provided both inpatient and outpatient percutane-ous coronary intervention (PCI). Herein lies both the problem and the solution. How can we define what variability is in how a procedure is being delivered state to state, lab to lab? We would contend the answer lies in care variation or lack of de-fined care pathways that deliver not only on quality outcomes, but cost efficiencies.

In Figure 2, Archway Health has bro-ken out where costs are attributed in a 90-day PCI bundle based on FFS (Medicare fee for service). Data were tak-en from 10/1/15 to 9/30/2016. As you can see from the graphic, the majority of the costs (70%) are attributed to the pro-cedure itself. In a similar analysis of the inpatient PCI bundle for 90 days, greater than 50% of costs were attributed to the procedure. Therefore, if we are to have any hope of controlling costs for PCI, we must find ways to reduce care variation by creating predictable care pathways that

The Cath Lab is Full of Cost-Saving OpportunityGary Clifton, Vice President, Terumo Business Edge

Gary Clifton, Vice President, Terumo Business Edge

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Figure 1. Distribution by state for the average episode payment by Medicare (courtesy Archway Health).

When surveyed, healthcare leaders continue to point to reducing unwarranted care variation as a goal for reducing costs and improving quality.

A

C D

Inpatient Variation –State Average Episode Payment

Outpatient Variation – State Average Episode Payment

BInterquartile Range for Inpatient

Interquartile Range for Outpatient

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The Cath Lab is Full of Cost-Saving OpportunityGary Clifton, Vice President, Terumo Business Edge

11C A T H L A B O P E R A T I O N A L E F F I C I E N C I E S : E X P E R T A D V I C EA P R I L 2 0 1 8

can manage the routine delivery of PCI in the most predictable, quality outcome-driven, cost-efficient manner possible.

In a recent publication by Amin et al3, the authors describe and profile costs at a very detailed level for their insti-tute (Barnes Jewish Hospital, St. Louis, Missouri). Amin et al then identify the use of a patient-centered protocol and the subsequent care pathway that facili-tated the rapid adoption and utilization (0-77%) of same-day discharge (even in complex patients), with no adverse out-comes, a high patient satisfaction rating, and significantly lower costs (approxi-mately $7,000).3 It is important to note that costs were obtained from the hos-pital’s finance department and included direct variable, direct fixed, and total costs (Figure 3). Knowing your costs is the first goal in assessing any program for cost ef-ficiency. It is not enough to know just your product acquisition costs; there is a need to look at the entire value stream of the procedure and the care pathway as the patient moves through the system.

ConclusionThere is a compelling need for cardiac

programs to continue to explore and pursue the necessary avenues to address care varia-tion. A patient-centered approach, utiliza-tion of reduced length-of-stay models such as same-day discharge, and greater attention to use of transradial access and the impor-tance of mitigating acute kidney injury are but a few of the more impactful measures a lab can employ to reduce costs, increase pa-tient satisfaction, and improve quality out-comes. Payers will continue to attempt to lower the cost of healthcare and providers will continue to feel the pressure. n

References1. Preliminary 2016 medians skew lower

as revenue and expense pressures hin-der profitability. Moody’s Sector In-Depth.May 16, 2017. Available online at https://www.moodys.com/research/Moodys-Preliminary-FY-2016-US-NFP-hospital-medians-edge-lower--PR_366813. Accessed March 7, 2018.

2. Pearl R. Why major hospitals are losingmoney by the millions. Forbes. Nov 7, 2017. Available online at https://www.forbes.com/sites/robertpearl/2017/11/07/hos-pitals-losing-millions/#1ad074da7b50. Accessed March 7, 2018.

3. Amin AP, Crimmins-Reda P, Miller S, etal. Novel patient-centered approach tofacilitate same-day discharge in patientsundergoing elective percutaneous coro-nary intervention. J Am Heart Assoc. 2018Feb 15; 7(4). pii: e005733. doi: 10.1161/JAHA.117.005733.

If we are to have any hope of controlling costs for PCI, we must find ways to reduce care variation by creating predictable care pathways that can manage the routine delivery of PCI in the most predictable, quality outcome-driven, cost-efficient manner possible.

Figure 2. Medicare FFS 90-day bundle data: 10/1/2015 - 9/30/2016 (courtesy Archway Health).

Figure 3. Costs associated with same-day discharge (SDD) in elective PCI. (A) Distribution of various costs across SDD groups. The box plots show the distribution of the color-coded buckets based on SDD status (filled boxes - SDD, empty boxes, NSDD). Significance values were obtained using the Mann-Whitney test. Pie charts at the top show the estimated cost saving (defined as 100xper-patient cost difference/per-patient cost in the no-SDD group). (B) Association of cost sav-ing with proportion of SDD PCIs. These 2-year, quarterly data span from third quarter in 2013 up to 2nd quarter in 2015. Each dot represents a combination of the SDD rate (x axis) and estimated cost saving (y axis). Regression coefficient was obtained using ordinary least squares regression. Results of the regression analyses indicate that for every additional 10% SDD resorted to in a quarter the cost savings increased by an additional 7.7%. NSDD indicates No SDD; PCI, percutaneous coronary intervention; and SDD, Same-day discharge.Reprinted with permission from Amin et al. J Am Heart Assoc. 2018 Feb 15; 7(4). pii: e005733. doi: 10.1161/JAHA.117.005733.

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