The CFA Perspective

John W. Meyer, LFACHE

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As Market Entry Barriers Decrease, Is TAVR Right for Your Hospital? Part One of Two Parts

Posted by John W. Meyer, LFACHE

5/16/19 9:15 AM

Are You ReadyOver the last few years, we have continued to blog to keep readers up to date on the evolving state of cardiac valve surgery and the development of transcatheter aortic valve replacement (TAVR) specifically.  As both clinical research results and regulatory changes push TAVR for all into the forefront, hospitals on the cusp of entering this market will need to reevaluate their positions before deciding to move forward. 

On March 16, 2019, the NEJM published online the results of two TAVR versus surgical AVR (SAVR) trials in low-risk patients, which effectively ended the debate.  At the ACC meeting in March 2019, one of the principal investigators stated that “TAVR is no longer just an alternative therapy, it is the preferred therapy.” [i]

On the heels of these and other similar results, everyone is waiting for CMS to issue its final, updated national coverage determination (NCD), proposed on March 26, 2019.  The pending updated TAVR NCD is predicted to reset minimum volume requirements and effectively lower the threshold for entering into and maintaining a TAVR program (see the proposed CMS decision memo).  These changes alone, will induce many more hospitals to enter this market.  CFA has a number of clients on the verge of making their decision to move forward.  Should the volume threshold be lowered by CMS, as proposed, we offer the following summary of critical considerations for implementing TAVR as Part One of a two-part blog post

  • Organizational commitment – Expanding the hospital’s structural heart program capabilities to include TAVR will require a commitment on the part of both the organization and its medical staff. This is a significant undertaking in terms of infrastructure, organization and management, physician leadership, staffing and training, and ultimately, financial investment and hopefully, a return-on-investment.  While this new service should expand its cardiovascular capabilities, enhance the hospital’s reputation and potentially increase market share (for both TAVR and SAVR), these are never givens, but have to be earned in a competitive marketplace.

  • Know your numbers – It is vital that any hospital contemplating TAVR know its current volumes of both SAVR patients and those referred elsewhere for potential TAVR procedures in order to achieve the required minimum volumes. (Refer to CMS New TAVR Coverage Decision Memo:  A Gift to Low-Volume Cardiac Surgery Programs? posted 3/29/19 for volume requirements).  Going forward must include a breakdown of current SAVR, as well as potential TAVR, factoring in patients deemed “inoperable” due to adverse risk and/or physiological considerations.

  • Infrastructure requirements – While the hybrid OR procedure room is the “optimal” site for TAVR, many hospitals will enter the market by using existing cath labs with upgraded levels of imaging equipment. This approach obviates the multi-million-dollar investment required to plan, develop and build out a hybrid OR.
    • Staffing assessment will need to be made to match expected volume with existing staffing patterns to ascertain both need and TAVR training requirements. At program initiation, some hospitals will tend to “overstaff’ the procedure, which can be refined over time.
    • Valves, delivery systems and related inventory will need to be purchased. Vendors typically require hospitals to purchase the valves up front, adding overhead costs.
    • Mandatory participation in the Society of Thoracic Surgeons (STS) and American College of Cardiology (ACC) Transcatheter Valve Therapy (TVT) Registry is required by CMS and has both a participation/licensing fee and ongoing staffing cost.

  • Multidisciplinary approach – Ultimately, any structural heart program should optimize its efficiency and effectiveness through multidisciplinary decision-making processes involving both cardiology and cardiac surgery. Input from all disciplines in evaluating candidates for therapies and interventions can be institutionalized into a cardiac valve clinic situation, or less formally through close communication between referring cardiologist, cardiac surgeon and other team members.  Realistically, referring cardiologists will tend to “pre-select” TAVR candidates and send them on to the preferred interventionalist.  In larger volume programs with formalized cardiac valve clinics and programs, dedicated nurse practitioners are often charged with coordinating the multidisciplinary meetings, clinics and processes necessary to achieve the desired clinical outcome.  Newer, smaller volume programs will be challenged to have existing staff multitasking with various targeted groups to achieve the same ends.

  • Trained operator(s) – While both interventional cardiology and cardiac surgeons can be trained to performed percutaneous valve procedures, it is the cardiologist that controls the patient and ultimately controls the procedure. The primary operator will need to be trained in the new procedure and achieve a certain level of proficiency and experience before initiating a new program.  Specific roles, and any turf issues will need to be addressed before the program can proceed.  Obviously, the skill of the individual operator will be critical to building a high-quality program over time.

  • Clinical philosophy and approach – Whenever clinicians initiate a new procedure, they tend to take a conservative approach in both patient selection and clinical protocols. As patient selection criteria, risk assessment and clinical application is further refined through clinical trial results, a focus on the treatment protocols seems logical.  Initially, when these procedures were new (and riskier), the use of general anesthesia or transesophageal echocardiography was used.  As experience progressed, many hospitals began using a so-called “minimalist” approach with protocols that call for conscious sedation and local anesthesia, eliminating sternotomy, cardiopulmonary bypass, and tracheal intubation. Thus, conscious sedation dramatically reduces procedure time, time in the ICU post-procedure, and patients’ hospital stay, resulting in lower costs, better health outcomes, and greater patient satisfaction.  Ultimately (and at the appropriate time) focusing on reducing overall procedure cost is a critical factor, as these are expensive procedures where reimbursement levels may not cover costs, particularly at low volume levels.

It is important to recognize that while AVR represents about 75% of all cardiac valve surgeries, transcatheter mitral valve procedures are now in active clinical trials and, if ultimately proven successful, will have similar impact (and generate the same issues) as those found with TAVR; further increasing the importance of transcatheter technologies on cardiac programs in general, and the overall importance of this market segment.

Some lower-volume cardiac surgery programs can be expected to benefit from the decreases in required volumes for combined SAVR, overall catheterization procedures, PCIs and going-forward TAVRs under the proposed NCD.  If adapted, these changes will significantly impact entry into this new market.  

Structural heart services[ii] including TAVR (and also transcatheter mitral valve repair and replacement) are complex and demanding services.  Beyond the question of “can we meet the current and/or proposed standards,” comes the larger, more complex question of “should we enter this market?”  With the latter question, each hospital will have to assess its own corporate strategy, internal existing/potential volumes, referral patterns and practices, payer mix/procedural cost/reimbursement, capital investment, operational capabilities, competition within the marketplace, physician leadership and capabilities, and other pertinent questions similar to those raised above. 

In Part Two of this blog post, we will address in more detail many of the issues raised above, including program planning, development and implementation needs; assessing prospective financial performance, physician and staff training, infrastructure needs and other related topics.

If you are interested in learning more about low-volume cardiac surgery programs strategies, please download our updated and expanded white paper (please see Low-Volume Cardiac Surgery Programs:  Grow, Consolidate or Divest:  Self-Preservation Strategies and Excellence Expectations).  If you are interested in cardiac services strategic development, service expansion and/or other programmatic needs for cardiovascular or other services, please contact CFA at (949) 443-4005 or by e-mail at cfa@charlesfrancassociates.com.

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Footnotes

[i] Allar, Daniel, Cardiovascular Business, May/June 2019, page 32, quoting Michael J. Reardon, MD, Houston Methodist Hospital, ACC19.

[ii] See also Valve Surgery Trends and Implications, posted June 28, 2018, and Mitral Valve Surgery Trends and Implications, posted March 14, 2019.

Quarterly Cardiovascular News Update and Implications

Posted by John W. Meyer, LFACHE

5/2/19 6:38 AM

 

Occasionally, CFA will highlight a few significant news articles on cardiovascular topics -- clinical or organizational.  Reprinted below are four interesting news items we feel worthy to highlight.  For full information, the links to the original news sources are included.  We have included our interpretation of the organizational implications of each item.

  • TAVR/TMVR market projected to reach $8B by 2023

The global market for transcatheter treatment of the mitral and aortic valves is expected to double over the next five years, according to a new report from BCC Research. The industry analysis projects an increase from $4 billion in 2018 to $8 billion in 2023, at a compound annual growth rate of 14.8 percent.  Transcatheter mitral valve repair (TMVR) accounted for just 12 percent of transcatheter aortic or mitral procedures in 2017, according to the report, but are expected to grow faster over the next few years than the more established field of transcatheter aortic valve replacement (TAVR). In 2023, BBC research predicts TMVR will account for 22 percent of the segment while TAVR will claim the other 78 percent—down from 88 percent in 2017. But market barriers exist as well, according to BCC Research analyst Ritu Thakur Dangi, BAMS, who authored the report. The high cost of heart valves, concerns over the surveillance and long-term durability of artificial valves, reimbursement issues and regulatory approval processes could hamstring growth, she told Cardiovascular Business.

  • ‘Really not close’: TAVR trumps SAVR in two trials of low-risk patients

Two trials evaluating transcatheter aortic valve replacement (TAVR) in low-risk patients haven’t just shifted the TAVR versus surgical AVR discussion. They’ve completely flipped it, said experts here at the American College of Cardiology’s scientific sessions.  “It used to be that TAVR was really a therapy that was appropriate for patients who were not good candidates for surgery,” said Martin B. Leon, MD, lead author of the PARTNER 3 low-risk TAVR trial. “We think that’s turned around and that probably TAVR should be the therapy considered and surgery should be used in patients that are not good candidates for TAVR.” Leon presented results of the randomized trial March 17 at ACC.19, a day after they were published online in The New England Journal of Medicine.

Implications – TAVR/TMVR continues to be a growth area for select providers who can produce sufficient volume to justify the clinical/organizational/financial commitments required.  As CFA has written, providers with small structural heart programs that rely on SAVR will continue to see the erosion of valve surgery volume as patients migrate to regional TAVR/TMVR centers of excellence – unless/until federal regulatory and reimbursement policies change.  Also see our blog, Low-Volume Cardiac Surgery Programs:  Mitral Valve Surgery Trends and Implications, posted 3/15/19.

  • Coronary Artery Calcium Scanning Is not a magic 8 ball

Vimal Ramjee, MD, senior staff cardiologist at the Chattanooga (Tennessee) Heart Institute, writes enthusiastically in Cardiovascular Business Practice Management  that, while he doesn’t have a “magic 8 ball,” Although no test can predict the future, the coronary artery calcium scan (CACS) is near the front of the pack in this regard. Why? Because a coronary artery calcium score outperforms all other risk factors used today in predicting future cardiovascular events. Clinically it’s a winner, so it’s no surprise that the latest American College of Cardiology/American Heart Association practice guideline on managing cholesterol added a class IIA recommendation to include CAC testing for intermediate-risk individuals who have an uncertain need for primary prevention statin therapy (J Am Coll Cardiol, online Nov. 8, 2018). Though CACS was already widely used, its formal inclusion in the guideline will likely increase its use in cardiovascular and primary care practices nationally.”

Implications – CACS is proving to be an effective and extremely important screening and diagnostic tool as part of an organized marketing campaign for hospital CV programs.  CFA has experience with hospitals that have dramatically increased brand awareness, regional/local patient referrals, physician in-office visits, and down-stream cardiology diagnostic and treatment business from these efforts.  Also see our blog, CT Coronary Artery Calcium Scoring Revisited:  One Hospital’s Successful Cardiac Screening Program, posted 12/6/18.

  • Cardiovascular surgeons, invasive cardiologists are top revenue-generators for hospitals

The average cardiovascular surgeon drives nearly $3.7 million in net revenue each year for a hospital system, the most among 18 physician specialties included in a survey of hospital chief financial officers. Invasive cardiologists weren’t far behind, ranking No. 2 at almost $3.5 million per year.  The survey, conducted by the physician search and consulting firm Merritt Hawkins, featured responses from 62 hospital CFOs or financial managers, who provided data on 93 separate hospitals. When pooling all physician specialties, the average revenue generated was almost $2.4 million, the highest of the seven times this survey has been conducted and a 52 percent increase from the most recent report in 2016 ($1.56 million). Invasive cardiologists were one of the groups that made a big jump, driving $2.4 million in hospital revenue in 2016 and almost $3.5 million in 2019. “These results suggest that value-based delivery models have not reduced the volume and/or the cost of physician specialty care, and that such efforts may be trumped by both the continued prevalence of fee-for-service payment models and, in particular, by increased utilization of physician services driven by population aging,” according to the report.

Implications – All hospitals recognize the importance of cardiovascular services to their bottom line.  Increasingly, competition for cardiovascular surgeons and invasive cardiologists is intensifying, given their overall monetary contribution and scarcity in the marketplace.  Programs are built around these specialists and they remain the primary critical building block for success in virtually all marketplaces.  Recruiting and retaining the right physician continues to be a critical and increasingly challenging endeavor for any program.

  • San Antonio hospital makes changes to heart program after low Society of Thoracic Surgeons score

After being ranked as one of the lowest performing hospitals in the country for adult heart surgeries in August 2018, University Hospital in San Antonio is retooling its heart care program, according to San Antonio Express-News.  In August, the Society of Thoracic Surgeons gave the hospital one star, its lowest ranking, for overall performance in aortic valve replacement surgery as well as for combined aortic valve and coronary artery bypass surgery. The hospital's scores improved slightly in January after data from the first half of 2018 was included — it was bumped up to two stars for aortic valve replacement surgery. However, University Hospital remains among the lowest ranking hospitals for heart surgery.  The hospital's heart surgeons did note there are certain factors, such as socioeconomic and insurance status, that are not included in STS ratings. University Hospital is a safety net hospital and thus may accommodate more uninsured patients or patients with more comorbidities. But the surgeons have acknowledged they are unsatisfied with the scores.

Implications – While price transparency may be the au current issue, the bedrock of quality outcomes and its transparency is also a critical issue for hospital cardiovascular programs.  One could argue that it shouldn’t take a one-star STS rating for any hospital to recognize it has a quality outcomes problem and spur it on to action, but the increasing transparency in outcomes means that every hospital must begin to aggressively address overall performance in quality outcomes as well as pricing.  Low volumes, particularly for some specific types of cardiac surgery (particularly structural heart surgery), contributes to this challenge.

If you are interested in learning more about any of these important issues or in cardiac services strategic development, service expansion and/or other programmatic needs for cardiovascular or other services, please contact CFA at (949) 443-4005 or by e-mail at cfa@charlesfrancassociates.com.  

 

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