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Ophthalmic industry’s advocacy message focuses on benefits of technology
Appropriate government reimbursement has a high return on investment in terms of societal benefit, one industry member says.
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A note from the editors:
As part of our Section Editor Summit, Ocular Surgery News invited key members of industry to share ideas about an area in ophthalmic business or regulatory issues that affect them. These presentations complemented the subspecialty updates given by our Section Editors. In his presentation, Andy Stapars, Advanced Medical Optics’s director of public policy, discussed regulatory and legislative issues as they relate to reimbursement.
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The health care policy debate in Washington is increasingly being framed as one of issues focusing on cost-containment and the need for aggressive measures to reduce costs. While it is important to acknowledge that there are areas of inefficiency to be addressed, an important thought that is perhaps not always considered is the value that innovation and technological advances bring to patients, including Medicare beneficiaries.
This article centers on the collective efforts of the ophthalmic device manufacturers to balance the perceptions in Washington, highlighting the unique value that continued innovation and technological advances can bring to patients and some of the current initiatives in which the ophthalmic industry is involved.
Budget issues
The current U.S. budget deficit is placing pressure on all discretionary spending programs in the United States, including Medicare and Medicaid. The Medicare drug benefit, which I believe will be perceived in the end to be valuable to seniors, is extremely costly. When it was presented to Congress, the initial estimates were for a 10-year net cost of $400 billion. The estimates have now been revised by the Office of Management and Budget, and the drug benefit is now expected to cost of approximately $720 billion. These are all new expenses in the Medicare system.
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Medicare expenditure as a percentage of gross domestic product is projected to increase in the next decade, fueled by the aging of the baby boomers. The recent landmark decision by the Centers for Medicare and Medicaid Services (CMS) regarding presbyopia-correcting IOLs, which allows Medicare patients to electively pay for noncovered benefits associated with a covered service, hopefully illustrates the agency’s open-mindedness to balancing the need to provide access to new technology with the need to keep government expenditures in line.
The ophthalmic industry is working on other areas of improvement in government payment systems. The Hospital Outpatient Prospective Payment System, which was launched in 2000, is an evolving program, and it has been moving in the right direction. The data used in setting these payment rates has been improving annually. We have seen consistent, moderate increases to most hospital-based procedures, which reflect the adoption of new technologies, with commensurate payment increases that facilitate integration of new technology.
The Medicare Modernization Act of 2003, although commonly thought to contain only the Prescription Drug Act, was actually a more sweeping reform. One of the provisions called for in the that act was a reform of the payment system for ASCs. This is mandated to occur by Jan. 1, 2008.
ASCs payment system
The ASC payment system is woefully outdated. For cataract surgery, ASC payments today are 30% less than the prospective payment for the same service performed in a hospital outpatient department.
This is a vital area of concern, particularly in cataract surgery. We estimate that 60% of all cataract procedures are now performed in ASCs. If this discrepancy is left unaddressed, we have the makings of a two-tiered health care delivery system. Continued payment disparity will mean that ASCs, unlike hospitals, will not get access to the latest capital equipment technology and be able to integrate the latest technology lenses, for example, into clinical practice because the current payment levels simply may not sustain that expense.
It is important to note that all medical specialty sectors are seeking enhanced reimbursements for their procedures. Through the efforts of the ophthalmic sector of the Advanced Medical Technology Association (AdvaMed), which is composed of Advanced Medical Optics, Alcon, Bausch & Lomb, BD Ophthalmics and Carl Zeiss Meditec, and led by AMO president and chief executive officer Jim Mazzo, we are coordinating the medical device industry’s participation in the revision of the ASC payment system.
We are working in coordination with the ambulatory surgery center societies, led by the work of the Outpatient Ophthalmic Surgery Society (OOSS), to advocate a new ASC payment system that develops a prospective procedural payment indexed to the hospital payment. With this approach, the new ASC payment system would also benefit from a significant expansion of allowed procedures, would receive annual payment updates, and would receive additional payment for new technologies, as in the hospital payment system today.
Our industry supports the work of the American Academy of Ophthalmology and the American Society of Cataract and Refractive Surgery to correct the flaws in the physician payment formula. This is an area of great concern, because if they are not permanently addressed, this will lead to future double-digit declines in payment rates for physician services.
Challenges, but exciting opportunities
Our industry is concerned about the physician payment issue. If physician payments for procedures are reduced, the overall perception of the value of the contributions of the entire ophthalmic industry is reduced.
Although we face challenges, I am excited about the opportunities we have in our advocacy efforts. The ophthalmic device industry works closely with physicians to design and develop new technologies to provide tools for ever-enhanced patient outcomes. We help physicians to deliver more efficient procedures, improve safety and reliability, and enhance patients’ lives with improved independence and productivity.
The ophthalmic industry’s advocacy message is that investment in innovation and technology, supported by appropriate government reimbursement, will have a high return on investment in terms of societal benefit. We are part of the solution, not a contributor to the problem.
A recent paper authored by Mark B. McClellan, MD, PhD, administrator of the CMS, showed that following cataract surgery, in the next 5 years of a patient’s life, the patient contributes an incremental $95,000 to economic productivity. Patients go from limited activity to restored independence and increased societal participation. This is just one illustration of our message.
Our work is targeted at educating key members of government committees that have Medicare jurisdiction, specifically the House Ways and Means Committee, the House Energy and Finance Committee and the Senate Finance Committee.
Goals
Our campaign is focused on several key diseases, including cataract, age-related macular degeneration, diabetic retinopathy and glaucoma. Our message not only seeks to demonstrate the benefits that patients receive but also to talk about the resource requirements that are necessary to continually deliver improved patient outcomes.
In May 2005, the AdvaMed ophthalmic sector hosted its second annual congressional briefing on “The Value of Ophthalmic Technology.” The event was cosponsored by the AdvaMed ophthalmic sector, the Congressional Vision Caucus and Prevent Blindness America. Focused on Washington legislators and regulators, it combined an informational briefing with an interactive display of the most current technologies used in diagnosis and treatment of major eye diseases.
This year’s keynote address was delivered by Kerry D. Solomon, MD, PhD, who spoke of the collaborative efforts of physicians and ophthalmic device manufacturers working together to develop tools that will allow our physicians to continue to “raise the bar” in delivering improved patient outcomes. Based on overwhelming positive response, plans are currently underway for a third annual congressional briefing next spring.
Our goal is to make positive the perception of medical technology’s contribution to health care – to shift the debate from one of cost to one focused on the societal benefits of improved health outcomes, restored independence, enhanced productivity and a better quality of life.
For Your Information:
- Andy Stapars is director of public policy at Advanced Medical Optics. He can be reached at 817-488-3309; fax: 817-291-8130; andy.stapars@amo-inc.com.