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Specialty care at the crossroads: Electrophysiology practice in the managed-care era
Specialty Care at the Crossroads: Electrophysiology Practice in the Managed-Care Era David S. Cannom and Joseph Ruggio The economics of the managed-care era have declared that there is an over supply of specialists. Especially vulnerable to the changing marketplace are electrophysiologists whose technology is poorly understood by managed-care plans. To be successful, electrophysiology (EP) practices must develop strategies to contend with the new reality. Over the past decade, electrophysiologists at Good Samaritan Hospital (Los Angeles, CA) have worked with the leadership of a large managed-care organization (Family Health Plan [FHP]) to develop guidelines for clinical EP procedures that optimize clinical outcome and cost for EP procedures. The important elements of a successful guideline are that it be a distillation of the best current medical literature and that it be carefully followed and routinely improved. Using the guidelines developed for radiofrequency ablation, FHP found that it was cheaper ($21,166 v $26,448) for FHP patients drug-
resistant to supraventricular tachycardia to undergo ablation than to be treated medically. This was for 14 months of care. In addition to the development and implementation of guidelines, a number of factors are important in developing a successful managed-care approach. The physicians should be the "high qualitylow cost" provider, with demonstrable excellent clinical outcomes, low complication rates, and competitive pricing. In addition, there must be an efficient shortstay system, with a premium on personal service to the patient and family. Also important is a strong hospital partner as well as sophisticated marketing and contracting support. A new marketplace paradigm is upon us that calls for a change in practice style from that of a decade ago if electrophysiologists are to survive in the managed-care marketplace. Copyright © 1996by W.B. Saunders Company
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ists divest themselves of procedures performed by primary care physicians remains a point of contention.l,2 Health care policy and recommendations for the stoichiometry of primary care and specialty physicians should be based on the incidence, prevalence, and morbidity/mortality of diseases that need to be treated. Disease management and evidence-based medicine will mandate adjustments in the ratios of primary care to specialists, scope of services, use of expensive technology, and use of hospital resources.3,4 Electrophysiology (EP) services are a prime example of the best and worst of technological advances in clinical medicine. The specialty has evolved from its early days of costly and risky technology in search of an application to its current position as a mainstay in the diagnosis and treatment of patients with tachyarrhythmias. The role of implantable cardioverter defibrillators (ICDs) and radiofrequency (RF) ablation in this era of evidence-based, outcomedriven, cost-containment, medical practice remains unclear. For this reason, we have under-
REVOLUTION in the way medicine is financed and, in turn, practiced is occurring in the United States. Most affected, besides the patients, are the specialists. Cardiac specialists are especially vulnerable, because in large part of the overtraining of cardiologists for the past 20 years. It is projected that some 14,000 cardiologists will be available in the year 2000, whereas only 7,000 to 8,000 will be needed, creating a surplus of between 50% and 100%. This means that one of every two cardiologists will either leave practice or retrain in another clinical area. This flight from the specialty has already begun on the West Coast and has created despair and uncertainty among those choosing to stay on. Now, without adequate preparation or retooling, primary care physicians are expected to provide services previously under the purview of specialists. Without the requisite training or experience, patient care could be compromised. This paradigm shift may well be in the best interest of society at large. The more that high-quality care can be definitively rendered at the point of origin, the more delays in diagnosis and cost will be reduced. This shift can most effectively be accomplished by supplying primary care and "general specialists" with carefully constructed guidelines, ongoing support, and specialty retraining. Whether there will be cost-reductions as special-
From the Good Samaritan Hospital, Los Angeles, CA. Address reprint requests to David S. Cannom, MD, Los Angeles Cardiology Associates, 1245 Wilshire Blvd, Suite 707, Los Angeles, CA 90017. Copyright © 1996 by W.B. Saunders Company 0033-0620/96/3805-000755. 00/0
Progressin CardiovascularDiseases, Vol XXXVIII, No 5 (March/April), 1996: pp 401-406
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taken an investigation into the efficacy and cost-effectiveness of these procedures. We wish to report on our preliminary data regarding RF ablation for patients refractory to conventional drug therapy, using specific guidelines developed to guide treatment in a managed-care setting. We will also suggest strategies for the electrophysiologist, hospitals, managed-care organizations, and health care delivery systems to survive and even prosper in the managed-care environment. DEFINITIONS
Although no one agrees entirely on definition, the American College of Cardiology proposed the following in 1993: "Managed care entails interventions to control the price, volume, delivery site, and intensity of health services provided, the goal of which is to maximize the value of health benefits and the coordination of health care management for the covered population.'5
The critical elements of this definition are those of control of cost and access to service. In this equation, key elements for the provision of health are shifted from the doctor to the health plan. It is the plan that determines who receives care, where it will be given, and how much will be paid for it. The physician still determines what care will be rendered, how, and by whom. In the managed-care staff model plans, the physicians are all employed by the plan, whereas, in preferred-provider organizations and independent practice association (IPA) network models, the plans contract with individual physicians or groups to provide the care. The specialist then must develop strategies to contract with the plans for providing services commensurate with the organizations' service requirements for credentials, proficiency, location, quality, and
areas of the United States in which managed care is still considered another California curiosity. However, on a cautionary note, once managed care takes hold in a community, its growth can be very rapid given the huge financial incentives for the managed-care provider. Therefore, it is imperative for physicians working in underpenetrated markets to become familiar with and perhaps maximize the advantages that managed care can represent for high-volume, cost-effective clinicians. There are already 2.34 million Medicare recipients in risk contract plans. 7 The fact that Congress plans to cut 250 billion dollars from planned Medicare growth in the next 7 years will force legions of Medicare recipients into managed-care plans all over the country (Table 1). MATERIALS AND METHODS The EP practice at the Good Samaritan Hospital (GSH; Los Angeles, CA) prospered in an intensive managed-care environment for the past decade. At the GSH, three full time electrophysiologists perform 1,200 cases in a dedicated biplane laboratory. Included in this number are 350 annual ablations and 100 new ICD implantations. Four full time EP nurses are employed, and three nurse coordinators work with the physicians. The hospital also supports a large cardiac catheterization (4,600 cases) and cardiovascular surgical program (900 cases). Ten years ago, the hospital Board of Trustees and involved physicians jointly decided to enter the managedcare environment aggressively. At each step, whether building facilities or pricing a contract, the cardiologists and the Board have agreed on the elements of strategic planning. Managed-care providers refer approximately 60% of the cases of the GSH EP practice. Although we have contracts with some 85 managed-care providers, we have developed much of our marketplace strategy with Family Health Plan International, Inc (FHP). FHP has 875,000 patients in Southern California. Its Chairman of Cardiovascular Services (Joseph Ruggio) has been a national leader in developing operational systems that monitor indications, costs, and outcomes. We see the critical features of the GSH-FHP
cost.
The states in which managed care has the highest penetration are California (38.3%), Oregon (37.5%), Maryland (36.2%), Arizona (35.8%), and Massachusetts (35.2%). Within California, there is a wide variability in penetration varying from Sacramento at 78% to OxnardVentura at 54%. 6 The commonly held assumption is that managed care or some variation in this theme, which has shown its ability to reduce health care costs, will inexorably infiltrate those
Table 1. Overview of the New Order
Driven by low cost and high quality, patient-friendly Emphasis on guidelines, disease management, evidencebased Careful tracking of costs and outcomes Emphasis on long-term relationships Relationship of HMO to hospital as important as that to physicians Emphasis on prevention and risk reduction Emphasis on early definitive interventions to reduce longterm costs
EP PRACTICE IN THE MANAGED-CARE ERA
model as the trend-setting model for our region and likely for the rest of the of the country. FHP cardiologists have developed referral guidelines for referral and management of every procedure that clinical electrophysiologists perform, including EP studies, l e d implantations, tilt testing, pacemaker implantation, and RF ablation. A strict methodology is followed resulting in a set of printed guidelines for physicians (both primary and tertiary) as well as case coordinators. First, an extensive review of the literature is undertaken in a given area and a position paper is written. Then, a number of national experts are consulted where there are areas of ambiguity. Based on these deliberations, FHP develops an internal reference set of proposed outcomes for its enrollees including clinical outcomes as well as costs and quality-of-life data. Entire patient groups are followed up in a sophisticated computer system, and guidelines are revised if outcome data suggest that an improvement has been identified. Careful attention is paid to the results of the large randomized national trials, and we anticipate guideline modification when the results of the Antiarrhythmics Versus lmplantable Defibrillators (AVID) trial, the Coronary Artery Bypass Graft Surgery (CABG-PATCH) trial, the Multicenter Automatic Defibrillator Implantation Trial (MADIT), and the Multicenter Unsustained Tachycardia Trial (MUSTT) are known. An example of an FHP-developed guideline is that developed for RF catheter ablation for Wolff-ParkinsonWhite (WPW) syndrome. The categories defined (in 1992) include the following: 1. Class I: Procedure of choice if patient has hemodynamic compromise during an episode of supraventricular tachycardia (SVT), a rapid rate ( > 200 beats per minute), or syncope during SVT. 2. Class II: Patients who wish a trial of medicine and have a clinical recurrence or patients who wish to come off medicine entirely or for occupation-related reasons. 3. Class III: None. These indications are clinically reasonable and remarkably similar to those recently published by a joint American College of Cardiology-American Heart Association task force. 8 Over the past 2 years, these guidelines have been in place and 32 patients have been referred for RF ablation. The total hospital cost to FHP (not charges but what.was actually paid) has been $6,859 (Fig 1), whereas the total fee per case to the electrophysiologist was $3,206. Included in this contract is the provision that if an ablation fails, the second procedure will be performed at no cost to the plan (this has been called the "double or nothing" feature). FHP has carefully monitored the outcomes of the patients undergoing ablation and compared them with those of a series of patients with similar clinical problems who did not undergo ablation. Using its sophisticated proprietary cost-tracking system, FHP found that it cost the plan (over 14 months) $21,196 for the RF ablation patients (including procedure and follow-up) compared with a cost of $26,448 each in a group of 62 patients with the same diagnosis during the same time frame who did not undergo RF ablation (Fig 2). Thus, the health plan saw a substantial savings in its RF patients when compared with that of traditionally treated patients. It is important to note that
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$16,000 $14,000 $12,000 $1o,ooo $8,000 $6,ooo $4,000 $2,000 $0 --
M
m
Fig 1. Shown are hospital charges and receivables for RF ablation in Southern California as determined by FHP. Average hospital charge for RF ablation in Southern California is $15,988. The GSH billed $13,748 but was actually paid $6,859 per ablation as determined by prenegogiated contract. [], average reference billed; ~, GSH billed; II, GSH paid.
this initial group of patients receiving RF therapy was made up of those who were most refractory to medical therapy and who had multiple outpatient and inpatient evaluations for their dysrhythmia. As such, they should be considered to be a higher risk, more refractory subset of patients whose predominant but not exclusive problem was WPW syndrome. Similar data are available for other procedures, although the RF experience is the easiest to analyze. It is critical to emphasize that every case is carefully discussed with a GSH electrophysiologist before referral, even if the guidelines are clear and especially if the patient falls into a gray zone. DISCUSSION
It is clear that RF ablation is curative therapy for the majority of patients with atrioventricular
$30,000
$25,000 $20,000 --~
III /
$15,000
$10,000 $5,000 $0 Fig 2. The total cost of medical care for 32 SVT patients undergoing ablation ([]) and 62 SVT patients not undergoing ablation ([]) at 14 months at follow-up, This information was collected via the FHP computer system, which tracks all patient costs. The ablation group total cost, which includes the procedure and any further outpatient visits, was $21,196 at 14 months. A comparable group of 62 patients with SVT who were not ablated had a cost, at 14 months, averaging 26,448. The rehospitalization cost (11) in the nonablation group (primarily emergency room visits) came to $4,431.
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nodal reentry tachycardia (AVNRT) or an accessory pathway. 9,1° The success rate at GSH for RF ablation for 400 WPW procedures and 285 AVNRT patients is 92%, with a 4% recurrence rate (D.S. Cannom and A.K. Bhandari, unpublished data). Factors influencing referral for RF ablation include: patient comfort and safety, access to an experienced operator and center of excellence, recurrence rate of the dysrhythmia, occupation complications, and cost. Early in the RF era, FHP referred only patients who were not controlled by medical therapy, as indicated in the subset here, or who had been cardioverted. However, the cost and outcome data presented in this study suggest an earlier and more definitive role for RF ablation. Although this approach has been adopted for WPW and some AVNRT, it may also represent a viable strategy for other SVT categories such as atrial flutter and poorly controlled atrial fibrillation. The role of EP testing and RF ablation in patients with asymptomatic WPW is much less clear. It is estimated that from 25% to 50% of such patients will remain asymptomatic and free of sudden death throughout their lifetime. Routine EP testing and consideration of RF ablation seems unnecessarily dangerous and costly in this subgroup. Critical to the optimal use of technology is the development of carefully constructed practice guidelines. With regard to cost, our data seem to present a compelling argument for overall cost-effectiveness. The costs related to RF ablation are "front loaded," whereas initial costs are high, subsequent costs are low. This reduces the "total cost of care" when compared with conventional medical therapy. In the vast majority of cases, RF ablation effectively eliminates the lifelong costs of medical therapy. The GSH-FHP partnership in electrophysiology has been a successful one for both parties for a decade. For FHP, it has provided a strategic alliance allowing reliable and predictable quality and cost in an evolving cardiovascular subspecialty. Using the techniques outlined above, FHP can predict how many cases within a given patient population it is likely to refer each year and at what cost to the plan. By carefully tracking outcome data for 10 years and incorporating the requisite improvements, it can assure itself of high clinical quality. By
CANNOM AND RUGGIO
having a long-term relationship with the provider hospital that is committed to managedcare contracting, it can assure itself of low cost and high quality. And, to the GSH electrophysiologists, this long-term relationship provides a steady flow of patients in an increasingly competitive marketplace. Thus, this model of the "high-quality-low-cost" partnership seems to work for both provider and specialist. It has also permitted FHP to do without a full-time electrophysiologist who might be underused given the clinical volumes. This model seems to be what other managedcare providers are attempting to accomplish without the refined guidelines, outcomes, and cost data crucial to success. The FHP model has taken a great deal of creative physician input and extensive staff time to accomplish. An unanswered question is whether this model is best for the patient. One of the complaints of the managed-care system is that it has a natural tendency to undertreat the complicated or unusual patient. A series of very public lawsuits against health-maintenance organizations (HMOs) in California by patients who were denied bone marrow transplantation or cleftpalate surgery have put the HMOs on the defensive. Some have publiclY admitted that they do not treat the unusual patient as well as the "worried well." The use of guidelines is an advantage for such unusual patients (including EP patients). In this way, the organization has standardized its care plan for this difficult group and has entrusted that optimal cost-effective care will be rendered by those clinicians responsible for this care. The contracted electrophysiologist then becomes a key member of the treatment team. It is a challenge to create a clinical electrophysiology service that will appeal to the managed-care provider. Most large cities have many qualified electrophysiologists and the buyer has a wide choice. Based on our experience in Southern California, the following elements are critical (Table 2): 1. The EP service provided must be of the highest quality. The plans will have ready access to outcome and complication data and will only contract with those services providing the best and most consistent care. This means that the provider must
EP PRACTICE IN THE MANAGED-CARE ERA Table 2, The Old and New Paradigms Fee for Service Model Good EP Timely service Full range of service Adequate communication Splintered care Poor follow-up Lack of knowledge of total cost of care
HMO Model Highest quality EP Excellent communication with patient and referring physician Same-day service and short stays Responsiveness to guidelines Sensitive to cost implications Reduced fee for service or capitation High-profile helps
have complete data on procedural success and complication rates. These rates must be comparable with the best in the literature. Certain traits describe such a service. Having a dedicated laboratory that performs EP all day ensures better nursing and ancillary help. Also, because success rates in some procedures are volumedependent, the large (>1,000 case/F) laboratory should do better than the small (< 200 case/yr) service. 2. The EP service must be timely, and lengths of stay short. Here, too, it is an advantage to have many attendings and a dedicated laboratory. We routinely finish all the cases that need to be performed on a given day, even if that means finishing late in the day. We have also shortened our number of drug trials in VT patients to one at the most. We keep our transvenous ICD patients only 1 postoperative day if possible. Short length of stay is the variable that assures low cost to the health plans, but achieving it is difficult. Our clinical nurse coordinators are a critical element in assuring an efficient and timely hospital stay. 3. A strong hospital partner who is committed to succeeding in the managed-care environment is critical. This is the variable that is missing in those programs that do not succeed. With competitive pricing and allocation of support staff to the EP service being so critical, physicians must view hospital administration as a trusted partner. Hospitals must also keep data to convince themselves that such programs are paying their way. 4. A patient-friendly environment is also im-
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portant. From the admitting desk, to the floor nurse, to the EP nurses and physicians, the environment must be patientfriendly. A patient may have driven 150 miles past 10 qualified hospitals to get to the contracting facility. Creating this atmosphere is challenging but pays large rewards when patients are asked to evaluate their experience at a referral institution. 5. The electrophysiologist must be responsible to the managed-care guidelines and sensitive to the cost implications of a divergence from an agreed on clinical plan. It is simply unacceptable to perform a procedure or place a device in a patient without prior agreement. Some electrophysiologists find such a loss of control in clinical decision-making intolerable. It is better to attempt to change guidelines than to violate them. Guidelines are a tool to assist in medical management, particularly when services are to be consistently delivered to a large patient population. As a tool, their inherent limitations are acknowledged, and individualized patient exceptions can be expected. 6. The office staff and administration of the EP practice must understand managed care and its goals. It must have contracting support that will cultivate and support its managed-care colleagues. This philosophy must be enforced throughout the office from the collections office to the procedure schedulers. 7. The electrophysiologist and office staff must practice aggressive cost-management and establish simple pricing structures. These include developing both competitive case rates and fair capitation pricing. Other strategies are being developed to work with other large managed-care entities. In South Florida; Southern California; Chicago, IL; and Dallas, TX; single-specialty IPAs have been formed to contract for large groups of managedcare patients over a large geographic area. Such organizational structures involving many medical groups and hospitals are very difficult to establish and even harder to manage. Another institutional strategy that will become increasingly important over the next few years is the
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development of a true center of excellence in cardiovascular medicine. Again, this is difficult to establish because the insurers' demands for treatment algorithms, outcome data, and full service scope are beyond the capacity of most facilities. We have seen both Delta Airlines and Aetna Insurance as well as the Health Care Financing Administration demonstration projects in cardiovascular surgery move in this direction with both greater patient satisfaction and demonstrable savings. Not all clinical decisions are obvious, and it is important to develop consensual thinking within the framework of the managed-care provider. Also, patients with SVT are certainly easier to analyze in terms of cost-effectiveness than are patients with ventricular arrhythmias. More
precise guidelines of the type referred to in this study await the outcome of the large, prospective randomized trials such as the AVID trial. The new order is on us, and, with all-change, there is enormous anxiety and opportunity. In the field of clinical electrophysiology, over the next few years there will be big winners and big losers. The culture of medicine is undergoing a sea of change and there is no guarantee that all physicians, especially electrophysiologists, will succeed. We have outlined what we believe to be a successful strategy oriented towards optimizing care in a highly penetrated managedcare environment. Key components necessary to ensure high-quality, cost-effective care in this high-tech evolving discipline are long-term strategic relationships.
REFERENCES 1. Becket E, Hsiao W, Dunn D, et al: Relative cost differences among physicians specialty practice. JAMA 260:2397-2353, 1988 2. Gold M, Chuk K, Felt S, et al: Effects of selected cost-containment efforts: 1971-1993. Health Care Financ Rev 14:183-225, 1993 3. Hiller AJ: Fulfilling the promise of disease management: The long road from concept to reality. Manage Care Med 2(5):35-43, 1995 4. Goldschmidt P, Bertram D: The influence of certainty of outcome on choice between treatments. Manage Care Med 2:14-47, 1995 5. American College of Cardiology: Cardiovascular specialist's guide to managed care (5-part monograph). American College of Cardiology Monograph Series. Bethesda, MD, American College of Cardiology, 1993, p 13
6. Hiltzik MA, Olmos DR: The health care revolution-Remaking medicine in California (five-part series). Los Angeles Times, August 27-31, 1995, sections 1-5 7. Beronja N: Navigating the Private Sector. Medicare Managed Care: The Sleeping Giant? Cardiology 24:9-12, 1995 8. Zipes DP, DiMarco JP, Gillette PC, et al: ACC/AHA Task Force Report on Guidelines for Clinical Intracardiac Electrophysiological and Catheter Ablation Procedures. J Am Coil Cardiol 26:555-573, 1995 9. Caulkins H, Sousa J, EI-Atassi R, et al: Diagnosis and cure of the Wolff-Parkinson-White syndrome or paroxysmal supraventricular tachycardias during a single electrophysiologic test. N Engl J Med 324:1612-1617, 1991 10. Jackman WM, Wang X, Friday KL, et al: Catheter ablation of accessory atrioventricular pathways (WolffParkinson-White syndrome) by radiofrequency current. N Engl J Med 324:1605-1611, 1991
resistant to supraventricular tachycardia to undergo ablation than to be treated medically. This was for 14 months of care. In addition to the development and implementation of guidelines, a number of factors are important in developing a successful managed-care approach. The physicians should be the "high qualitylow cost" provider, with demonstrable excellent clinical outcomes, low complication rates, and competitive pricing. In addition, there must be an efficient shortstay system, with a premium on personal service to the patient and family. Also important is a strong hospital partner as well as sophisticated marketing and contracting support. A new marketplace paradigm is upon us that calls for a change in practice style from that of a decade ago if electrophysiologists are to survive in the managed-care marketplace. Copyright © 1996by W.B. Saunders Company
A
ists divest themselves of procedures performed by primary care physicians remains a point of contention.l,2 Health care policy and recommendations for the stoichiometry of primary care and specialty physicians should be based on the incidence, prevalence, and morbidity/mortality of diseases that need to be treated. Disease management and evidence-based medicine will mandate adjustments in the ratios of primary care to specialists, scope of services, use of expensive technology, and use of hospital resources.3,4 Electrophysiology (EP) services are a prime example of the best and worst of technological advances in clinical medicine. The specialty has evolved from its early days of costly and risky technology in search of an application to its current position as a mainstay in the diagnosis and treatment of patients with tachyarrhythmias. The role of implantable cardioverter defibrillators (ICDs) and radiofrequency (RF) ablation in this era of evidence-based, outcomedriven, cost-containment, medical practice remains unclear. For this reason, we have under-
REVOLUTION in the way medicine is financed and, in turn, practiced is occurring in the United States. Most affected, besides the patients, are the specialists. Cardiac specialists are especially vulnerable, because in large part of the overtraining of cardiologists for the past 20 years. It is projected that some 14,000 cardiologists will be available in the year 2000, whereas only 7,000 to 8,000 will be needed, creating a surplus of between 50% and 100%. This means that one of every two cardiologists will either leave practice or retrain in another clinical area. This flight from the specialty has already begun on the West Coast and has created despair and uncertainty among those choosing to stay on. Now, without adequate preparation or retooling, primary care physicians are expected to provide services previously under the purview of specialists. Without the requisite training or experience, patient care could be compromised. This paradigm shift may well be in the best interest of society at large. The more that high-quality care can be definitively rendered at the point of origin, the more delays in diagnosis and cost will be reduced. This shift can most effectively be accomplished by supplying primary care and "general specialists" with carefully constructed guidelines, ongoing support, and specialty retraining. Whether there will be cost-reductions as special-
From the Good Samaritan Hospital, Los Angeles, CA. Address reprint requests to David S. Cannom, MD, Los Angeles Cardiology Associates, 1245 Wilshire Blvd, Suite 707, Los Angeles, CA 90017. Copyright © 1996 by W.B. Saunders Company 0033-0620/96/3805-000755. 00/0
Progressin CardiovascularDiseases, Vol XXXVIII, No 5 (March/April), 1996: pp 401-406
401
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taken an investigation into the efficacy and cost-effectiveness of these procedures. We wish to report on our preliminary data regarding RF ablation for patients refractory to conventional drug therapy, using specific guidelines developed to guide treatment in a managed-care setting. We will also suggest strategies for the electrophysiologist, hospitals, managed-care organizations, and health care delivery systems to survive and even prosper in the managed-care environment. DEFINITIONS
Although no one agrees entirely on definition, the American College of Cardiology proposed the following in 1993: "Managed care entails interventions to control the price, volume, delivery site, and intensity of health services provided, the goal of which is to maximize the value of health benefits and the coordination of health care management for the covered population.'5
The critical elements of this definition are those of control of cost and access to service. In this equation, key elements for the provision of health are shifted from the doctor to the health plan. It is the plan that determines who receives care, where it will be given, and how much will be paid for it. The physician still determines what care will be rendered, how, and by whom. In the managed-care staff model plans, the physicians are all employed by the plan, whereas, in preferred-provider organizations and independent practice association (IPA) network models, the plans contract with individual physicians or groups to provide the care. The specialist then must develop strategies to contract with the plans for providing services commensurate with the organizations' service requirements for credentials, proficiency, location, quality, and
areas of the United States in which managed care is still considered another California curiosity. However, on a cautionary note, once managed care takes hold in a community, its growth can be very rapid given the huge financial incentives for the managed-care provider. Therefore, it is imperative for physicians working in underpenetrated markets to become familiar with and perhaps maximize the advantages that managed care can represent for high-volume, cost-effective clinicians. There are already 2.34 million Medicare recipients in risk contract plans. 7 The fact that Congress plans to cut 250 billion dollars from planned Medicare growth in the next 7 years will force legions of Medicare recipients into managed-care plans all over the country (Table 1). MATERIALS AND METHODS The EP practice at the Good Samaritan Hospital (GSH; Los Angeles, CA) prospered in an intensive managed-care environment for the past decade. At the GSH, three full time electrophysiologists perform 1,200 cases in a dedicated biplane laboratory. Included in this number are 350 annual ablations and 100 new ICD implantations. Four full time EP nurses are employed, and three nurse coordinators work with the physicians. The hospital also supports a large cardiac catheterization (4,600 cases) and cardiovascular surgical program (900 cases). Ten years ago, the hospital Board of Trustees and involved physicians jointly decided to enter the managedcare environment aggressively. At each step, whether building facilities or pricing a contract, the cardiologists and the Board have agreed on the elements of strategic planning. Managed-care providers refer approximately 60% of the cases of the GSH EP practice. Although we have contracts with some 85 managed-care providers, we have developed much of our marketplace strategy with Family Health Plan International, Inc (FHP). FHP has 875,000 patients in Southern California. Its Chairman of Cardiovascular Services (Joseph Ruggio) has been a national leader in developing operational systems that monitor indications, costs, and outcomes. We see the critical features of the GSH-FHP
cost.
The states in which managed care has the highest penetration are California (38.3%), Oregon (37.5%), Maryland (36.2%), Arizona (35.8%), and Massachusetts (35.2%). Within California, there is a wide variability in penetration varying from Sacramento at 78% to OxnardVentura at 54%. 6 The commonly held assumption is that managed care or some variation in this theme, which has shown its ability to reduce health care costs, will inexorably infiltrate those
Table 1. Overview of the New Order
Driven by low cost and high quality, patient-friendly Emphasis on guidelines, disease management, evidencebased Careful tracking of costs and outcomes Emphasis on long-term relationships Relationship of HMO to hospital as important as that to physicians Emphasis on prevention and risk reduction Emphasis on early definitive interventions to reduce longterm costs
EP PRACTICE IN THE MANAGED-CARE ERA
model as the trend-setting model for our region and likely for the rest of the of the country. FHP cardiologists have developed referral guidelines for referral and management of every procedure that clinical electrophysiologists perform, including EP studies, l e d implantations, tilt testing, pacemaker implantation, and RF ablation. A strict methodology is followed resulting in a set of printed guidelines for physicians (both primary and tertiary) as well as case coordinators. First, an extensive review of the literature is undertaken in a given area and a position paper is written. Then, a number of national experts are consulted where there are areas of ambiguity. Based on these deliberations, FHP develops an internal reference set of proposed outcomes for its enrollees including clinical outcomes as well as costs and quality-of-life data. Entire patient groups are followed up in a sophisticated computer system, and guidelines are revised if outcome data suggest that an improvement has been identified. Careful attention is paid to the results of the large randomized national trials, and we anticipate guideline modification when the results of the Antiarrhythmics Versus lmplantable Defibrillators (AVID) trial, the Coronary Artery Bypass Graft Surgery (CABG-PATCH) trial, the Multicenter Automatic Defibrillator Implantation Trial (MADIT), and the Multicenter Unsustained Tachycardia Trial (MUSTT) are known. An example of an FHP-developed guideline is that developed for RF catheter ablation for Wolff-ParkinsonWhite (WPW) syndrome. The categories defined (in 1992) include the following: 1. Class I: Procedure of choice if patient has hemodynamic compromise during an episode of supraventricular tachycardia (SVT), a rapid rate ( > 200 beats per minute), or syncope during SVT. 2. Class II: Patients who wish a trial of medicine and have a clinical recurrence or patients who wish to come off medicine entirely or for occupation-related reasons. 3. Class III: None. These indications are clinically reasonable and remarkably similar to those recently published by a joint American College of Cardiology-American Heart Association task force. 8 Over the past 2 years, these guidelines have been in place and 32 patients have been referred for RF ablation. The total hospital cost to FHP (not charges but what.was actually paid) has been $6,859 (Fig 1), whereas the total fee per case to the electrophysiologist was $3,206. Included in this contract is the provision that if an ablation fails, the second procedure will be performed at no cost to the plan (this has been called the "double or nothing" feature). FHP has carefully monitored the outcomes of the patients undergoing ablation and compared them with those of a series of patients with similar clinical problems who did not undergo ablation. Using its sophisticated proprietary cost-tracking system, FHP found that it cost the plan (over 14 months) $21,196 for the RF ablation patients (including procedure and follow-up) compared with a cost of $26,448 each in a group of 62 patients with the same diagnosis during the same time frame who did not undergo RF ablation (Fig 2). Thus, the health plan saw a substantial savings in its RF patients when compared with that of traditionally treated patients. It is important to note that
403
$16,000 $14,000 $12,000 $1o,ooo $8,000 $6,ooo $4,000 $2,000 $0 --
M
m
Fig 1. Shown are hospital charges and receivables for RF ablation in Southern California as determined by FHP. Average hospital charge for RF ablation in Southern California is $15,988. The GSH billed $13,748 but was actually paid $6,859 per ablation as determined by prenegogiated contract. [], average reference billed; ~, GSH billed; II, GSH paid.
this initial group of patients receiving RF therapy was made up of those who were most refractory to medical therapy and who had multiple outpatient and inpatient evaluations for their dysrhythmia. As such, they should be considered to be a higher risk, more refractory subset of patients whose predominant but not exclusive problem was WPW syndrome. Similar data are available for other procedures, although the RF experience is the easiest to analyze. It is critical to emphasize that every case is carefully discussed with a GSH electrophysiologist before referral, even if the guidelines are clear and especially if the patient falls into a gray zone. DISCUSSION
It is clear that RF ablation is curative therapy for the majority of patients with atrioventricular
$30,000
$25,000 $20,000 --~
III /
$15,000
$10,000 $5,000 $0 Fig 2. The total cost of medical care for 32 SVT patients undergoing ablation ([]) and 62 SVT patients not undergoing ablation ([]) at 14 months at follow-up, This information was collected via the FHP computer system, which tracks all patient costs. The ablation group total cost, which includes the procedure and any further outpatient visits, was $21,196 at 14 months. A comparable group of 62 patients with SVT who were not ablated had a cost, at 14 months, averaging 26,448. The rehospitalization cost (11) in the nonablation group (primarily emergency room visits) came to $4,431.
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nodal reentry tachycardia (AVNRT) or an accessory pathway. 9,1° The success rate at GSH for RF ablation for 400 WPW procedures and 285 AVNRT patients is 92%, with a 4% recurrence rate (D.S. Cannom and A.K. Bhandari, unpublished data). Factors influencing referral for RF ablation include: patient comfort and safety, access to an experienced operator and center of excellence, recurrence rate of the dysrhythmia, occupation complications, and cost. Early in the RF era, FHP referred only patients who were not controlled by medical therapy, as indicated in the subset here, or who had been cardioverted. However, the cost and outcome data presented in this study suggest an earlier and more definitive role for RF ablation. Although this approach has been adopted for WPW and some AVNRT, it may also represent a viable strategy for other SVT categories such as atrial flutter and poorly controlled atrial fibrillation. The role of EP testing and RF ablation in patients with asymptomatic WPW is much less clear. It is estimated that from 25% to 50% of such patients will remain asymptomatic and free of sudden death throughout their lifetime. Routine EP testing and consideration of RF ablation seems unnecessarily dangerous and costly in this subgroup. Critical to the optimal use of technology is the development of carefully constructed practice guidelines. With regard to cost, our data seem to present a compelling argument for overall cost-effectiveness. The costs related to RF ablation are "front loaded," whereas initial costs are high, subsequent costs are low. This reduces the "total cost of care" when compared with conventional medical therapy. In the vast majority of cases, RF ablation effectively eliminates the lifelong costs of medical therapy. The GSH-FHP partnership in electrophysiology has been a successful one for both parties for a decade. For FHP, it has provided a strategic alliance allowing reliable and predictable quality and cost in an evolving cardiovascular subspecialty. Using the techniques outlined above, FHP can predict how many cases within a given patient population it is likely to refer each year and at what cost to the plan. By carefully tracking outcome data for 10 years and incorporating the requisite improvements, it can assure itself of high clinical quality. By
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having a long-term relationship with the provider hospital that is committed to managedcare contracting, it can assure itself of low cost and high quality. And, to the GSH electrophysiologists, this long-term relationship provides a steady flow of patients in an increasingly competitive marketplace. Thus, this model of the "high-quality-low-cost" partnership seems to work for both provider and specialist. It has also permitted FHP to do without a full-time electrophysiologist who might be underused given the clinical volumes. This model seems to be what other managedcare providers are attempting to accomplish without the refined guidelines, outcomes, and cost data crucial to success. The FHP model has taken a great deal of creative physician input and extensive staff time to accomplish. An unanswered question is whether this model is best for the patient. One of the complaints of the managed-care system is that it has a natural tendency to undertreat the complicated or unusual patient. A series of very public lawsuits against health-maintenance organizations (HMOs) in California by patients who were denied bone marrow transplantation or cleftpalate surgery have put the HMOs on the defensive. Some have publiclY admitted that they do not treat the unusual patient as well as the "worried well." The use of guidelines is an advantage for such unusual patients (including EP patients). In this way, the organization has standardized its care plan for this difficult group and has entrusted that optimal cost-effective care will be rendered by those clinicians responsible for this care. The contracted electrophysiologist then becomes a key member of the treatment team. It is a challenge to create a clinical electrophysiology service that will appeal to the managed-care provider. Most large cities have many qualified electrophysiologists and the buyer has a wide choice. Based on our experience in Southern California, the following elements are critical (Table 2): 1. The EP service provided must be of the highest quality. The plans will have ready access to outcome and complication data and will only contract with those services providing the best and most consistent care. This means that the provider must
EP PRACTICE IN THE MANAGED-CARE ERA Table 2, The Old and New Paradigms Fee for Service Model Good EP Timely service Full range of service Adequate communication Splintered care Poor follow-up Lack of knowledge of total cost of care
HMO Model Highest quality EP Excellent communication with patient and referring physician Same-day service and short stays Responsiveness to guidelines Sensitive to cost implications Reduced fee for service or capitation High-profile helps
have complete data on procedural success and complication rates. These rates must be comparable with the best in the literature. Certain traits describe such a service. Having a dedicated laboratory that performs EP all day ensures better nursing and ancillary help. Also, because success rates in some procedures are volumedependent, the large (>1,000 case/F) laboratory should do better than the small (< 200 case/yr) service. 2. The EP service must be timely, and lengths of stay short. Here, too, it is an advantage to have many attendings and a dedicated laboratory. We routinely finish all the cases that need to be performed on a given day, even if that means finishing late in the day. We have also shortened our number of drug trials in VT patients to one at the most. We keep our transvenous ICD patients only 1 postoperative day if possible. Short length of stay is the variable that assures low cost to the health plans, but achieving it is difficult. Our clinical nurse coordinators are a critical element in assuring an efficient and timely hospital stay. 3. A strong hospital partner who is committed to succeeding in the managed-care environment is critical. This is the variable that is missing in those programs that do not succeed. With competitive pricing and allocation of support staff to the EP service being so critical, physicians must view hospital administration as a trusted partner. Hospitals must also keep data to convince themselves that such programs are paying their way. 4. A patient-friendly environment is also im-
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portant. From the admitting desk, to the floor nurse, to the EP nurses and physicians, the environment must be patientfriendly. A patient may have driven 150 miles past 10 qualified hospitals to get to the contracting facility. Creating this atmosphere is challenging but pays large rewards when patients are asked to evaluate their experience at a referral institution. 5. The electrophysiologist must be responsible to the managed-care guidelines and sensitive to the cost implications of a divergence from an agreed on clinical plan. It is simply unacceptable to perform a procedure or place a device in a patient without prior agreement. Some electrophysiologists find such a loss of control in clinical decision-making intolerable. It is better to attempt to change guidelines than to violate them. Guidelines are a tool to assist in medical management, particularly when services are to be consistently delivered to a large patient population. As a tool, their inherent limitations are acknowledged, and individualized patient exceptions can be expected. 6. The office staff and administration of the EP practice must understand managed care and its goals. It must have contracting support that will cultivate and support its managed-care colleagues. This philosophy must be enforced throughout the office from the collections office to the procedure schedulers. 7. The electrophysiologist and office staff must practice aggressive cost-management and establish simple pricing structures. These include developing both competitive case rates and fair capitation pricing. Other strategies are being developed to work with other large managed-care entities. In South Florida; Southern California; Chicago, IL; and Dallas, TX; single-specialty IPAs have been formed to contract for large groups of managedcare patients over a large geographic area. Such organizational structures involving many medical groups and hospitals are very difficult to establish and even harder to manage. Another institutional strategy that will become increasingly important over the next few years is the
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development of a true center of excellence in cardiovascular medicine. Again, this is difficult to establish because the insurers' demands for treatment algorithms, outcome data, and full service scope are beyond the capacity of most facilities. We have seen both Delta Airlines and Aetna Insurance as well as the Health Care Financing Administration demonstration projects in cardiovascular surgery move in this direction with both greater patient satisfaction and demonstrable savings. Not all clinical decisions are obvious, and it is important to develop consensual thinking within the framework of the managed-care provider. Also, patients with SVT are certainly easier to analyze in terms of cost-effectiveness than are patients with ventricular arrhythmias. More
precise guidelines of the type referred to in this study await the outcome of the large, prospective randomized trials such as the AVID trial. The new order is on us, and, with all-change, there is enormous anxiety and opportunity. In the field of clinical electrophysiology, over the next few years there will be big winners and big losers. The culture of medicine is undergoing a sea of change and there is no guarantee that all physicians, especially electrophysiologists, will succeed. We have outlined what we believe to be a successful strategy oriented towards optimizing care in a highly penetrated managedcare environment. Key components necessary to ensure high-quality, cost-effective care in this high-tech evolving discipline are long-term strategic relationships.
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6. Hiltzik MA, Olmos DR: The health care revolution-Remaking medicine in California (five-part series). Los Angeles Times, August 27-31, 1995, sections 1-5 7. Beronja N: Navigating the Private Sector. Medicare Managed Care: The Sleeping Giant? Cardiology 24:9-12, 1995 8. Zipes DP, DiMarco JP, Gillette PC, et al: ACC/AHA Task Force Report on Guidelines for Clinical Intracardiac Electrophysiological and Catheter Ablation Procedures. J Am Coil Cardiol 26:555-573, 1995 9. Caulkins H, Sousa J, EI-Atassi R, et al: Diagnosis and cure of the Wolff-Parkinson-White syndrome or paroxysmal supraventricular tachycardias during a single electrophysiologic test. N Engl J Med 324:1612-1617, 1991 10. Jackman WM, Wang X, Friday KL, et al: Catheter ablation of accessory atrioventricular pathways (WolffParkinson-White syndrome) by radiofrequency current. N Engl J Med 324:1605-1611, 1991