At the same time, for many hospitals, EP procedures are an important source of revenue – a source that under normal circumstances allows the hospital to maintain other service lines that may be losing money. Hospitals for which EP is a highly profitable service line will be looking to quickly treat the patients who have gone untreated, in order to normalize their financial situation and fiscally rebound after a period of essentially losing control of the spend.
For hospitals that treat a lot of CMS-reimbursed patients, the situation looks more difficult. They face a catch 22 of simultaneous pent-up demand for procedures and a broken financial situation, caused by the tremendous demands of the coronavirus. Many U.S. hospitals are used to an operating margin of 2 percent or less; with ER, patient care and ICU demanding 100 percent of their resources, their financial situation looks bleak. In addition, given the large number of people who have lost their jobs during the crisis, many more will need to rely on CMS for insurance, which can dramatically exacerbate the financial challenge for many hospitals.
In the short term, hospitals are in great need of solutions that bring them back to profitability. In the long term, they must create slack in the supply chain so they can appropriately respond to future pandemic shifts in demand.
Reprocessing as a supply chain strategy
Reprocessing of single-use devices has a role to play here. The majority of U.S. hospitals already use single-use reprocessing as a means to reducing costs. However, these programs typically limit the types of devices that are reprocessed, despite the fact that there is no evidence to suggest that certain FDA-cleared devices are less safe or effective than other FDA-cleared devices. In addition, many reprocessing programs are not viewed as a supply chain strategy and, thus, do not receive the focus they deserve.
As a result, nationally, hospitals save on average about half of what they could save from single-use device reprocessing in EP labs. Re-imagining reprocessing as a supply chain strategy would not only release massive sums for the hospitals, but it would also help create the supply chain slack and control needed for situations like this.
Catheter ablation can exemplify this: There are more than 360,000 ablation procedures a year in the U.S. More than 240,000 of these are likely atrial fibrillation (AFib) procedures, which continue to grow by more than 15 percent per year thanks to better technology and more diagnoses. Device costs in AFib procedures are roughly $10,500 per procedure (more than half of CMS’ reimbursement rate). This means, in the U.S., we spend more than $2.5 billion per year on devices used in AFib procedures.