From the Editor: Wound Care & Health Reform

  This week I had lunch with Dr. Guy L. Clifton, MD, author of Flatlined, Resuscitating American Medicine, a book that “delves into the realities of good people caught in a bad medical system.”   The former chairman of neurosurgery at the University of Texas Health Science Center in Houston, where I was also once employed, Dr. Clifton also spent two years in Washington, DC as a health policy fellow with the Robert Wood Johnson Foundation. He is now creating healthcare clinics designed to work within the new healthcare system.   Lately, the wound care community has been focused on some “trees in the forest” issues such as the package pricing of cellular and tissue-based products (CTPs). Talking to Dr. Clifton is a good way to see the big forest of healthcare reform. I will list just a few of the forces converging on the marketplace here, but an important one is the sustainable growth rate formula that sets the yardstick for physician payment. Since 2009, Congress has been putting off the 10% cut in Medicare payments to physicians required by this formula. Delinking the cost and volume of physician services will cost $262 billion over 10 years. The money is not there. Doctors are simply going to get paid less money in the future, and what they do get paid for will be tied to quality metrics. Diagnosis-related groupings (DRGs) brought inpatient spending under control, but outpatient spending is on a runaway train.   The package pricing of CTPs was the first small step in the direction of a much larger change, which will result in either outpatient DRGs, capitation, or some other form of controlled payment rate for outpatient services. The payers themselves are changing drastically with the effects of Obamacare sending shockwaves through the private insurance industry. As Medicare evolves into (at the very least) an HMO, the private payer system will dramatically change along with delivery of care. Payers are using quality data to select physicians for their networks and reimbursement packages for physicians who will increasingly become employees of the institutions willing to go at risk in a new marketplace. Those institutions are the ones willing to bet that they can provide better care at a lower cost while pocketing the rest. The outpatient wound center of the future is the one that can achieve the best outcomes with the least use of resources.

Efficacy Over Volume

  There is a famous quote attributed to General Motors: “We lose money on every car, but we will make it up in volume.” The days of payment for volume are over. Our “cost effectiveness” studies need to be redone and our approach to wound care products and advanced therapeutics completely turned upside down. Ask yourself: If you had $10,000 to heal a Wagner Grade 2 diabetic foot ulcer and you could keep any money you had left over — which interventions would you choose? How many times would you see the patient? Which products would you use? We are now looking for efficiency rather than volume. The organization that can provide the best outcomes for the lowest cost is going to win in this new world.   And, by the way, Dr. Clifton has agreed to speak at SAWC Fall on “Healthcare Reform: A Simplified Practical Update for Clinicians.” Don’t miss it.