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Ann Thorac Surg 2001;71:S195-S198
© 2001 The Society of Thoracic Surgeons
a International Center for Health Outcomes and Innovation Research, Departments of Surgery and Medicine, College of Physicians and Surgeons and the Joseph L. Mailman School of Public Health, Columbia University, New York, New York, USA
b New York Presbyterian Hospital, New York, New York, USA
Address reprint requests to Dr Moskowitz, International Center for Health Outcomes and Innovation Research, Columbia University, Harkness Pavilion, Rm 756, 180 Fort Washington Ave, New York, NY 10032
e-mail: ajm4{at}columbia.edu
Presented at the Fifth International Conference on Circulatory Support Devices for Severe Cardiac Failure, New York, NY, Sept 15–17, 2000.
Abstract
Background. With increasing use of left ventricular assist devices (LVAD) worldwide, the economics of LVAD implantation have become an important focus of concern. Although these devices have high unit costs, they are the only hope for survival for a large group of terminally ill patients and are likely to have an expansion in indications for use.
Methods. We calculated the costs associated with long-term LVAD implantation. We used the ratio of cost-to-charges method to calculate hospital costs per resource category, market prices for drugs and device, and payments for physician services.
Results. Based on our experience with "bridge-to-transplantation" patients, we estimated average first-year costs to be $222,460 including professional fees and $192,154 excluding professional fees. The latter figure is comparable to average first-year costs for cardiac transplantation, which is $176,605 without professional fees at our institution.
Conclusions. The costs of LVAD therapy will change after the first year of implantation, and device reliability and longevity will be important factors in determining these costs. Should the costs of LVAD therapy continue to track those of cardiac transplantation, devices will be cost-effective only if they offer similar efficacy to cardiac transplantation.
With increasing use of left ventricular assist devices (LVAD) worldwide, the economics of LVAD implantation have become a key concern for a variety of reasons. First, LVADs are a "big ticket" item, rivaling the cost of cardiac transplantation and lung volume reduction surgery. Second, LVADs may offer the only hope of survival for a critically ill group of patients, a fact that raises complex issues related to the economics of care in the context of a life-threatening condition. Third, with ongoing improvements in the device and clinical management, LVADs could be used for an ever-widening set of interventions. The US Food and Drug Administration (FDA) approved their use as a bridge to transplantation. Experience with LVADs in bridge-patients has been positive. Such patients have been able to return home to their families with a comparatively good quality of life [1]. Consequently, many in the field have been giving serious consideration to using these devices for other indications, such as an alternative to transplantation in patients who have chronic advanced heart failure and those with acute cardiogenic shock. Thus, the devices are being evaluated for patient populations with common disorders.
Heart failure is a major public health problem and its management commands a significant amount of health care resources. Population-based studies estimate that heart failure afflicts between 3 and 4 million Americans, with about 400,000 new cases being diagnosed each year [2, 3]. The number of hospital admissions has increased tenfold since 1970, and heart failure is the leading diagnosis-related group among elderly patients [4, 5]. In fact, Medicare alone paid $2.4 billion to hospitals for about 613,000 heart failure hospitalizations in 1991 (diagnosis-related group 127 for heart failure cases only, excluding shock), whereas total treatment costs (including inpatient and outpatient costs) for this condition were estimated to be more than $10 billion in 1991 [6]. Using other estimation techniques, O’Connell and Bristow estimated this figure to be $38 billion [7]. Regardless of which estimate is more accurate, both figures represent significant resource expenditures (ie, between 1% and 4% of total health care costs).
Similarly, the economic burden of acute cardiogenic shock, a condition that complicates acute myocardial infarction and cardiothoracic surgical procedures, is also high. Approximately 1.7 million Americans have an acute myocardial infarction each year. Despite major advances in treating this condition, there has been little impact on the severe complication of cardiogenic shock. Acute cardiogenic shock remains the leading cause of death in patients with acute myocardial infarction, occurring in 7% to 15% of patients with a 30-day mortality of between 50% and 80%. Even the application of revascularization in the acute setting for these patients has only a modest impact on short-term survival, suggesting that perhaps the restoration of blood flow alone is inadequate to sustain them. If revascularization is to have any benefit, the myocardium may need support while recovery is occurring, offering a possible role for LVADs.
In the current economic environment of constrained health care resources, it is imperative that the broadening of indications for this emerging technology be guided by rigorous trials of its benefits and costs. In a cooperative agreement with the National Heart, Lung and Blood Institute of the National Institutes of Health and Thermo Cardiosystems (Woburn, MA), we are currently conducting the REMATCH (randomized evaluation of mechanical assistance for the treatment of congestive heart failure) trial, comparing implantation with the vented electric (VE) HeartMate with optimal medical management in patients who require but are ineligible for cardiac transplantation [8]. This trial will evaluate the survival, quality of life, and cost of the HeartMate LVAD treatment. It will address an essential economic question, namely, how efficient is this technology in using health care resources to generate health? Moreover, it will provide data to analyze the question of how much of an impact the new indication for using this technology will have on the overall health care budget. Trials are also being considered for acute cardiogenic shock.
Commensurate with the increasing number of cardiac transplantation candidates, LVAD use has increased in both number and duration of implantation. Although originally restricted to inpatient care, by 1995 FDA liberalized their regulatory policy and allowed patients to return home after satisfying a release protocol designed to assess whether they would be safe at home with an implanted device. This change in clinical practice gave us the opportunity to analyze inpatient and outpatient experiences of these patients, which provided realistic projections for the costs of long-term LVAD implantation. In turn, these projections allow us to determine just how effective this technology will need to be to satisfy our concerns about cost-effectiveness. We review here our costing experience with LVAD implantation, compare the results with the costs of cardiac transplantation, and offer observations about cost-effectiveness.
Costs of initial hospitalization
We recently reported on our institution’s experience with the electrically driven LVAD in 12 adult patients from 1994 through 1995 [9]. We used the experience of all 12 patients, that is, patients implanted during both years, to estimate the cost of the implantation admission, and based our estimates of outpatient costs on patients treated in 1995 only. Moreover, because FDA regulation prohibited discharge in 1994 and dictated a minimum hospital stay in 1995, we reviewed the hospital records and applied predefined discharge criteria (see Table 1) to establish a date of discharge dictated by clinical concerns. The outcomes for this population during the period of study included 2 deaths, 8 transplants, and 2 transplant candidates with device support. The average number of LVAD supported days was 177 days, with a range from 13 (due to perioperative mortality) to 481 days (remaining on LVAD support). The average length of stay was 17.5 ± 5.32 days. We used the ratio of cost-to-charges (RCC) method to calculate hospital costs per resource category, market prices for drugs and device, and payments for physician services. The average cost of the initial-implant related hospitalization was $141,287 ± 18,513. The cost breakdown by resource use categories is depicted in Table 2. The largest component of hospital cost is the device itself, followed by professional payments and stay in the intensive care unit.
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Moving beyond the initial hospitalization, we examined outpatient costs and readmissions. The cohort experienced a total of 2,012 LVAD support days, of which 1,266 days were out of the hospital. Looking at the outpatient days for patients implanted in 1995 only, the average was 211 (range 16 to 328 days). The cost of each weekly visit, including professional payments, was $352. The average professional payment per visit was $128. There were a total of 11 readmissions during the period of observation, which involved 5 patients and 124 hospital days. The total cost of readmissions was $215,093, which corresponds to an average of $43,019 per readmitted patient, $19,554 per readmission. Thus, on average, patients were readmitted 2.5 days per month since implantation discharge, corresponding to a cost of $5,550 per month. The total cost for the postimplantation hospitalization care during year 1 was $81,420. This amount is in contrast to the total posttransplantation hospitalization care costs during year 1, which, without professional fees, was $63,237. Adding in the professional fees for year 1 to transplantation costs moves these values considerably closer together.
Total costs for year 1
The average total cost for LVAD therapy during year 1 was $222,460. When compared without professional payments LVAD therapy costs $192,154 for year 1 and transplantation treatment costs $176,605. In making this comparison, several considerations should be kept in mind. First of all, cardiac transplantation is a mature treatment, whereas LVADs at the time were definitely an emerging technology. As a result, we can expect reductions in the length of stay and readmission rate for LVAD patients—two major components of the overall cost. Second, the cost of the device itself and its performance features should improve over time. At our institution, follow-up visits have decreased already.
Implications for cost-effectiveness
Two important economic concerns for expanding the use of a new and expensive technology such as the LVAD is (1) how efficiently the technology uses health care resources to generate health and (2) how large an impact the technology has on the overall health care budget. Although both of these issues will be better addressed when REMATCH is complete, we can already draw some inferences about the first concern based on the costs that we have projected here.
Medical treatments have broad-ranging cost-effectiveness ratios as Table 4 demonstrates—from a little more than $300 per quality adjusted life year (QALY) saved for cholesterol testing and diet to more than $160,000/QALY saved for neurosurgery for intracranial tumors. These cost-effectiveness ratios measure the additional cost per additional unit of health generated. An observation that may seem paradoxical but that is highly relevant when considering technologies like the LVAD is this: expensive technologies can be cost-effective and inexpensive technologies can be cost-ineffective.
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Based on our experience with bridge-to-transplantation patients, the first-year cost of LVAD therapy is close to the first-year cost for cardiac transplantation. The second- and subsequent-year costs for cardiac transplantation are considerably less. Important factors in generating later costs include rejection and coronary artery disease. We do not know yet what LVAD therapy costs will be in the later years. Clearly, device reliability and longevity will be important factors in determining costs during these years. If, however, the cost of LVAD therapy continues to track the costs of cardiac transplantation, then this technology will have to deliver an effectiveness similar to that of cardiac transplantation in the late 1980s, when the above cost-effectiveness ratio was derived, to satisfy society’s concerns about cost-effectiveness.
Comment
The first-year cost of LVAD therapy is comparable to cardiac transplantation—with the professional fees included, the cost is about $220,000. The largest portion of this cost is for the device, which accounts for 50% of the implantation hospitalization. We can anticipate decreasing cost of the LVAD as the technology matures The long-term costs of transplantation go down during the second and subsequent years, but rejection and late coronary artery disease play an important role in generating later costs. So far, we do not know what these costs are going to be with the LVAD in year 2; we have to wait for REMATCH for that answer. Device reliability and longevity will play an important role in generating costs in subsequent years. Finally, if the costs of LVAD therapy continue to track cardiac transplantation, this technology will need to deliver roughly similar efficacy to satisfy cost-effectiveness concerns.
In conclusion, we believe that rational decisions concerning the allocation of health care resources will increasingly need to depend on research that determines what works and what does not work and at what cost. Conducting such research, however, will not eliminate the need to make choices that are exceedingly painful in their nature. That is part of the price exacted by scientific and technological progress.
Acknowledgments
This work was supported in part by that National Institutes of Health grant no. HL-53986 from the National Heart Lung and Blood Institute.
References
This article has been cited by other articles:
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  H. Granfeldt, B. Koul, L. Wiklund, B. Peterzen, U. Lonn, A. Babic, and H. C. Ahn Risk factor analysis of Swedish Left Ventricular Assist Device (LVAD) patients Ann. Thorac. Surg., December 1, 2003; 76(6): 1993 - 1998. [Abstract] [Full Text] [PDF]
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