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Comparing Open Surgery to Laparoscopic - The Business Case - Comparing Open Surgery to Laparoscopic - The Business Case - Minimally Invasive Procedures.

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Presentation on theme: "Comparing Open Surgery to Laparoscopic - The Business Case - Comparing Open Surgery to Laparoscopic - The Business Case - Minimally Invasive Procedures."— Presentation transcript:

1 Comparing Open Surgery to Laparoscopic - The Business Case - Comparing Open Surgery to Laparoscopic - The Business Case - Minimally Invasive Procedures Kimberly Munro Aug 24, 2010 School Employees Health Care Board Kimberly Munro Aug 24, 2010 School Employees Health Care Board DSL#

2 Worlds largest diversified healthcare company Corporate reputation Second Best in America ** More than 200 separate operating companies in 57 countries 53.3 billion dollars in sales – 44% Pharmaceuticals – 38% Medical Devices – Worlds Largest – 18% Consumer Products Major provider of health benefits for – 122,000 employees world wide – 50,000 US based employees - 75,000 dependents

3 Ethicon Endo-Surgery, Inc. Develops and markets advanced medical devices for minimally invasive and open surgical procedures Focuses on procedure- enabling devices for the interventional diagnosis and treatment of conditions in: General surgeryBariatric/Obesity surgeryGastrointestinal healthGynecology andSurgical oncology Provides state-of-the-art surgeon & allied health training for our products & procedures ESI offers a variety of courses, as well as distance learning and online courses, designed to provide each participant with an educational experience focused on emerging technologies and new surgical procedures.

4 Healthcare Economics & Reimbursement We provide education & assistance with the development of coverage, payment and benefit decisions to our customers… Specific to Minimally Invasive Procedure (MIP) options, bariatric surgery & new, innovative technologies & procedures Our focus is on improving surgical quality & outcomes with less overall cost Enabling Patient Access to Care Our customers include health plans, employers, government agencies, brokers, payor organizations and coalitions

5 Minimally Invasive Procedures: Defined Animated Procedural Videos Clinical Benefits of MIP Nosocomial Infections (Hospital Acquired) Economic Impact of MIP Case Studies / Examples of Success MIP – Implementing the Strategy Support Material (Appendix) Minimally Invasive Procedures: Defined

6 Surgery performed through small incisions or the natural orifice using video cameras and specialized instrumentation This approach is often referred to as Laparoscopic

7 Tomson (Solucient). New Procedure Volumes 2006 Scope of Procedures

8 Procedure Rate of Open Surgery Hemorrhoidectomy92% Colectomy69% Hysterectomy54% Breast Biopsy38% Appendectomy36% Reflux Surgery13% Bariatric Surgery12% Cholecystectomy3% Medstat – MarketScan 3Q06-2Q07 Open Surgery versus MIP

9 1 2 Gunnarsson C et al. The effects of laparoscopic surgery and nosocomial infections on the cost of care. Value in Health 2008 July; Vol 12, Issue 1 3 Brill A, Ghosh K, Gunnersson C, Rizzo J, Fullum T, Maxey C, Brossette S. The effects of laparoscopic cholecystectomy, hysterectomy, and appendectomy on nosocomial infection Risks. Surg Endosc Apr 22(4): Clinical Benefits of MIP Pain Scarring Recovery Time Less… Hospital Length of Stay (LOS) 2 Shorter… Nosocomial Infection Rates 3 Readmission Rates In Certain Procedures, Reduction In…

10 Direct Medical Costs Less post-procedure pain Less Rx Less Physical Therapy Opportunity to shift from Inpatient to Outpatient setting 2 Reduction in Readmission Rates 3 Reduction in Nosocomial Infection Rates 3 Lower LOS 1 Indirect Costs Quicker Return to Work 1 Quicker Return to Normal Activities 1 Reduced Absenteeism Improved Presenteeism Leading to increased productivity ROI is Immediate and Sustainable 2 Minimally invasive: minimally reimbursed? An Examination of Six Laparoscopic Surgical Procedures. Roumm A, Pizzi L, Belsky A, et al. Surgical Innovation, Vol. 12, No 3 (September), 2005: Fullum et al. 3 Brill A, et al. Clinical and Economic of MIP

11 Range of reduction in days when comparing MIP to open procedures Studies Reviewed Minimally invasive: minimally reimbursed? An Examination of Six Laparoscopic Surgical Procedures. Roumm A, Pizzi L, Belsky A, et al. Surgical Innovation, Vol. 12, No 3 (September), 2005: † 5 of the 37 studies for Appendectomy showed an increase ranging from 0.2 to 0.7 days MIP Impact on Hospital Length of Stay (LOS)

12 Range of reduction in days when comparing MIP to open procedures Studies Reviewed Minimally invasive: minimally reimbursed? An Examination of Six Laparoscopic Surgical Procedures. Roumm A, Pizzi L, Belsky A, et al. Surgical Innovation, Vol. 12, No 3 (September), 2005: † 2 of the 10 studies for Appendectomy showed no reduction MIP Impact on Return to Work (RTW)

13 Range of reduction in days when comparing MIP to open procedures Studies Reviewed Minimally invasive: minimally reimbursed? An Examination of Six Laparoscopic Surgical Procedures. Roumm A, Pizzi L, Belsky A, et al. Surgical Innovation, Vol. 12, No 3 (September), 2005: † 2 of the 14 studies for Appendectomy showed an increase ranging from 1-6 days MIP Impact on Return to Normal Activity (RTNA)

14 Comparing Open to MIP Using “Real World” Database of Claims Data 1, 2 Reduction in infection rates Reduction in incidence of sepsis 3 Reduction in overall complications Reduction in Length of Stay Colectomy † 37%64%31%4.2 days Appendectomy † 20%55%34%.64 days LH versus TAH ‡ 17%50%41%1.1 days VH versus TAH ‡ 22%50%17%.96 days † Fullum et al. Comparison of the clinical and economic outcomes between open and minimally invasive appendectomy and colectomy: evidence from a large commercial payer database. Surg Endosc ‡ Warren L et al. Open abdominal versus laparoscopic and vaginal hysterectomy: analysis of a large United States payer measuring quality and cost of care. Journal of Minimally Invasive Gynecology, Vol 16, No 5, September/October p<.05 2 When comparing open versus laparoscopic approached and controlling for the following factors: age, gender, type of insurance, case mix index and complexity of disease. 3 An infection in the blood LH = Laparoscopic Hysterectomy VH = Vaginal Hysterectomy TAH = Total Abdominal Hysterectomy MIP Reduces Risk of Complications

15 Minimally Invasive Surgery Overview The CDC estimates that 2 Million patients acquire nosocomial infections each year, resulting in over $4.5 Billion Dollars in cost to the US healthcare system. 1 Laparoscopic surgery reduced the risk of nosocomial infections by more than 50 percent when compared to open surgery, across hysterectomies, cholecystectomies (gallbladder) and appendectomies Gallbladder—66% reduction Hysterectomy—52% reduction Appendectomies—Lower, but not statistically significant Reduction In Odds Of Acquiring Infection By Type: Respiratory Tract—80% reduction Bloodstream—69% reduction Wound—59% reduction Urinary Tract—39% reduction Others—48% reduction Hospital re-admissions associated with infection—65% reduction 2 Minimally Invasive Surgery Significantly Reduces Nosocomial Infections DSL# Sources: 1 Centers for Disease Control Prevention. Nosocomial infection update. Emerging Infectious Diseases. 1998; 43: “The effects of Laparoscopic Cholecystectomy, Appendectomy, and Hysterectomy on nosocomial infection risks.” Andrew Brill, MD, FACS, Kathakali Ghosh, MS, Candace L. Gunnarsson, Ed.D., John Rizzo, PhD, Terrance Fullum, MD, FACS, Craig A. Maxey, MBA, Stephen E. Brossette, MD, PhD, Surgical Endoscopy, February, 2008

16 Nosocomial Infections

17 Reduction in overall odds of acquiring a nosocomial infection 1, 2 Hysterectomy 52% Cholecystectomy66% Appendectomy Trending lower, but not statistically significant Brill A, Ghosh K, Gunnersson C, Rizzo J, Fullum T, Maxey C, Brossette S. The effects of laparoscopic cholecystectomy, hysterectomy, and appendectomy on nosocomial infection Risks. Surg Endosc Apr 22(4): The Effects of MIP on Nosocomial Infection Rates 1 When comparing open versus laparoscopic approaches and controlling for the following factors: age, gender, type of insurance, case mix index and complexity of disease. 2 P<.01

18 Type of Infection Impact of MIP on the reduction in odds of NI 1, 2 Urinary Tract39% Wound59% Respiratory Tract80% Bloodstream69% Others48% Brill A, Ghosh K, Gunnersson C, Rizzo J, Fullum T, Maxey C, Brossette S. The effects of laparoscopic cholecystectomy, hysterectomy, and appendectomy on nosocomial infection Risks. Surg Endosc Apr 22(4): MIP reduces the odds of readmission with nosocomial infection by 65.4% 2 The Effects of MIP on Nosocomial Infection Rates 1 When comparing open versus laparoscopic approached and controlling for the following factors: age, gender, type of insurance, case mix index and complexity of disease. 2 P<0.05

19 Gunnarsson C et al. The effects of laparoscopic surgery and nosocomial infections on the cost of care. Value in Health 2008 July; Vol 12, Issue 1 Estimated Incremental Effects on the Cost of Care per NI 2 Incremental Length of Stay due to NI 2 Cholecystectomy$ 4, Hysterectomy $ 4, Appendectomy $ 6, Average$ 5, Statistically significant at the 1% level, two tailed test The Effects of Nosocomial Infections (NI) on Cost of Care to Payer

20 Removal of the Gallbladder Cholecystectomy Removal of the Uterus Hysterectomy Partial or Complete removal of the Colon Colectomy Animated Procedural Videos

21 Short Term Disability Guidelines

22 Source: MDA Internet Duration Guidelines, The Reed Group - Medical Disability Advisor (http://www.mdainternet.com; accessed on 08/06/2006) Refer to DSL# MIP Impact on Short Term Disability

23 MIP versus Open Difference in Cost of Episode of Care Colectomy † $15,181 1,2 Cholecystectomy ‡ $3,299 1,4 Appendectomy †‡ $700-1,032 1,3 Hysterectomy ‡ $1,218 1,4 † Fullum et al. Comparison of the clinical and economic outcomes between open and minimally invasive appendectomy and colectomy: evidence from a large commercial payer database. Surg Endosc ‡ Gunnarsson C et al. The effects of laparoscopic surgery and nosocomial infections on the cost of care. Value in Health 2008 July; Vol 12, Issue 1 1 Risk Adjusted 2 p<.05 3 p < p<.01 MIP Impact on Overall Costs

24 † † Warren L et al. Open abdominal versus laparoscopic and vaginal hysterectomy: analysis of a large United States payer measuring quality and cost of care. Journal of Minimally Invasive Gynecology, Vol 16, No 5, September/October 2009 ††HCUP Facts and Figures: Statistics on Hospital-Based Care in the United States, 2007 Reduction in spending of $2294 per procedure 1, 2 1 Adjusted for surgery type, patient age at index date, gender, Charlson Morbidity Index, geographic region, and medical degree specialty 2 p<.05 Hysterectomy is the 5 th most common surgical procedure for females. †† Comparing Expenditures by Inpatient & Outpatient Care Setting

25 Medstat – MarketScan 3Q06-2Q07 1 Not adjusted for risk factors 2 p<.001 MIP Allows for Migration from Inpatient to Outpatient Setting

26 Real World Examples of MIP Integration

27 An Employer’s Perspective Realizing the Value of Minimally Invasive Surgery Colorado Spring School District 11

28 Core K-12 district 30,000 students 60 schools Self-funded medical plan: 2,600 employees; 6,400 lives Medical budget is $28 million 70% women and high incidence of chronic diseases D11 - Background

29 Improve the health of members Improve quality of care Contain health care costs Solutions involve key stakeholders: Providers Plan Members Provide value to stakeholders including taxpayers D11 – Key Strategies

30 Co-pay differential between MIP and open TPA set up Pre-authorization for selected procedures Provider directory identified MIP Trained Surgeons MIP Education provided at open enrollment and throughout the year TPA reached out to PCPs to build awareness D11 – Implementation

31 Setting of CareIncentive Inpatient$400 Outpatient$200 Phase 1 (7/07)Phase 2 (7/08) CholecystectomyBariatric Surgery HysterectomyAppendectomy Colectomy D11 – Copayment Incentives

32 Letters and s to employees Letters and newsletters to PCPs and surgeons Personal discussion with surgeons by Medical Director – get trained! Website info on MIS and surgeons D11 – Communications Strategy

33 Procedure 2007 MIP Adoption Rates 2009 MIP Adoption Rates Hysterectomy28%81% Cholecystectomy93%100% Colectomy33%100% Bariatric Surgery93%100% Two-year savings of $1 Million “Every extra dollar spent on healthcare is a dollar that doesn’t get to the classroom.” - Ken Detweiler D11 – Two-Year Outcomes

34 Our Value to the Payor & Patient

35 OrganizationLocationOutcomeDate Initiated Colorado Springs School District 11CO Co-pay differential for MIP Pre-authorization initiated Employee Education MIP Trained Surgeons designated in directory July 2007 Colorado Springs UtilitiesCO Co-pay differential for MIP Pre-authorization initiated Employee Education January 2010 Hannaford Bros.ME Co-pay differential for MIP Pre-authorization initiated Employee Education MIP surgeons certified/FLS January 2008 Clovis Community Medical CenterCA Co-pay differential for MIP Pre-authorization initiated Employee Education January 2010 WhirlpoolMI Co-pay differential for MIP Pre-authorization initiated Employee Education January 2010 Selected Examples

36 MIP Cost Calculator

37 MIP 123

38

39 Questions?

40 Appendix

41 1 The American Society of Breast Surgeons (http://www.breastsurgeons.org/mibb.shtml)-Approved January 2006—Accessed online American College of Surgeons webpage (www.facscrs.org) - Accessed online National Comprehensive Cancer Network (www.nccn.org) - Accessed online 2008 American Society of Breast Surgeons “Image guided percutaneous needle biopsy is the diagnostic procedure of choice for image-detected breast abnormalities.” 1 American Society of Colon and Rectal Surgeons “Laparoscopic colectomy for curable cancer results in equivalent cancer related survival to open colectomy when performed by experienced surgeons.” 2 National Comprehensive Cancer Network “The NCCN guidelines recommend laparoscopic colectomy as an option because clinical trials have shown that laparoscopic Colectomy is as good a procedure as abdominal colectomy.” 3 Medical Society Position Statements Support MIP

42 MedStat Data Q – Q Health insurance claims across the continuum of care (e.g. inpatient, outpatient, outpatient pharmacy, carve-out behavioral health care) Enrollment data from large employers and health plans across the United States who provide private health care coverage for more than seven million (annual) employees, their spouses and dependents This administrative claims database includes a variety of fee-for-service, preferred provider organizations, and capitated health plans. Does not include Medicare data MIP Cost Impact: MedStat Data

43 –Summary of 112 articles on MIP vs. open surgical procedures including: Prospective, randomized comparative trials Systematic review Prospective, non-randomized comparative trials Retrospective, observational studies –Measures included Length of stay in the hospital Return to normal activities Return to work “Minimally invasive: minimally reimbursed? An Examination of Six Laparoscopic Surgical Procedures. Roumm A, Pizzi L, Belsky A, et al. Surgical Innovation, Vol. 12, No 3 (September), 2005: ” Background on “Roumm et al” Article

44 Procedure Rate of Open Surgery Hemorrhoidectomy – Removal of Hemorrhoids 92% Colectomy – Partial or Complete Removal of Colon 69% Hysterectomy – Removal of Uterus 54% Breast Biopsy – Tissue Biopsy of Breast Tissue 38% Appendectomy – Removal of Appendix 36% Reflux Surgery – Surgery for Gastro Esophageal Reflux Disease (GERD) 13% Bariatric Surgery – Weight Loss Surgery 12% Cholecystectomy – Removal of the Gallbladder 3% Medstat – MarketScan 3Q06-2Q07 MIP Adoption Rates


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