Managing of the heart

Jay Ethridge

March 1, 2008

Much has been said about the baby boomers' effect on American society – from their potential to bankrupt Social Security to the way they are changing the face of retirement.  With baby boomers projected to live longer than their parents, much also has been said about their effect on the health care system. In fact, statistics show that by 2030 one-third of the American population will be over the age of 55.

While this will present unique challenges, this wave of aging patients also will create opportunities for growth as the health care industry develops new technologies and therapies to help boomers maintain active lifestyles well into their retirement years.

One particular segment of the health care industry that's projected to benefit from aging baby boomers is the implantable device market. Implantable devices include a wide variety of therapies such as pacemakers, coronary stents, hip replacements and neurostimulators. Collectively, the market for implantable devices is projected to reach more than $40 billion a year by 2011.

Unfortunately, the current health care system is ill-equipped to handle the projected growth in implantable devices. These complex devices can cost up to $30,000 each and require ongoing support throughout the patient's life.

As the prevalence of implantable devices increases, so does their impact on the bottom lines of medical facilities and insurance companies. Both groups must develop comprehensive strategies for addressing the management and reimbursement of these devices – and they need to do it soon.

In most situations implantable devices are included in the overall cost of a patient's surgical procedure. This trend can be counterproductive when it comes to handling claims that include an implantable medical device.

The devices tend to make up the majority of the reimbursement the medical provider receives for a given procedure. Inefficiencies in the procurement of the device and reimbursement strategies can create scenarios where the insurance company is paying too much or the medical provider is not receiving adequate reimbursement. 

By unbundling reimbursement or contracting methodologies, insurance carriers can create transparency and isolate what they are truly paying for the devices. Unfortunately, current insurance claims systems do not provide a means for isolating those costs.

Outsourcing the management of implantable medical devices is a cost-effective strategy that builds transparency into the process and delivers benefits to both insurance companies and providers. Working with a company that can provide a full range of implantable device management services will enable insurance companies to better isolate and manage device costs.

An outsourced provider of implantable device management is able to provide consistent pricing and detailed utilization reporting that help insurance companies put the most comprehensive and effective contracts in place with medical providers. 

Medical providers also can see tremendous benefits by outsourcing implantable device management. As the number of available devices increases, a medical provider's staff must continually expand its expertise in acquiring devices, securing insurance authorization, billing correctly for the procedures, and collecting for reimbursement.

Consumers may think efficient handling of implantable medical devices has no impact on them. In fact, this is the type of situation that leads to rising health insurance premiums, which ultimately can have a negative impact on your bottom line whether you're a business owner or an employee paying a portion of the cost.

Developing efficient systems for managing costs can help insurance companies lessen the expenses they pass along to you. But as medical technology advances and becomes more expensive it becomes more difficult for insurance companies to effectively manage the costs for a wide variety of procedures and devices. Moving toward a health care environment where knowledgeable outsourced providers step into that role will provide tremendous benefits for everyone.

Jay Ethridge is CEO of Alpharetta-based Implantable Provider Group