By Charlotte Huff
May. 5, 2010
In their pursuit of cost-effective medical treatment, officials at a Colorado Springs school district wanted to move beyond prescription drug and chronic disease management programs. So they trained their sights on surgery, specifically laparoscopic procedures that involve smaller surgical incisions.
Studies have shown several related benefits, including shorter recovery time and reduced risk of infection, says Ken Detweiler, the former director of risk-related activities for the district, Colorado Springs School District 11. Plus, the price difference can be substantial, ranging from $1,700 to $7,800 per procedure, depending on the surgery involved.
Detweiler, then the director and now a school district consultant, decided to act on that information, launching a program to encourage the district’s 6,000 medical plan enrollees to consider laparoscopy—also known as minimally invasive surgery—for five common surgeries.
Working in conjunction with the district’s insurance administrator, school district officials talked up the medical benefits and offered employees a lower co-pay, beginning in mid-2007. A preauthorization step also was added, to scrutinize medical necessity when a more traditional open incision was recommended.
“I think a lot of employers would say, ‘Why would you deal at this level?’ ” Detweiler says. “It almost sounds like I’m getting in the middle of the patient and the doctor. And that was not the case at all.
“The surprising thing to me was, the secret to making this happen was the employees,” he says. Teachers don’t want to be out of the classroom, he says. And once they understand the shorter recuperation time, “Word-of-mouth gets out.”
In an analysis prior to the initiative, the district determined that its employees’ use of laparoscopy already had saved nearly $1 million over a two-year period. That savings translates to at least $6 per member per month for the district, which is self-funded. Detweiler presented the data in February to a San Antonio forum hosted by the National Business Coalition on Health and the Integrated Benefits Institute.
Once the educational effort kicked in, the laparoscopy rate increased significantly for some procedures, including hysterectomy and colectomy (in which a portion of the colon is removed). Within 18 months, the percentage of employees getting their hysterectomies through a small incision increased from 28 percent to 81 percent. For colectomy, the rate increased from 33 percent to 100 percent.
Education versus coercion?
Detweiler cites a couple of other Colorado employers that are taking a similar route by providing incentives or education related to minimally invasive surgery. Another frequently cited adherent is Hannaford Supermarkets, which launched a minimally invasive surgery program, including lower co-pays, in 2008.
Such surgery-focused efforts are still relatively rare, but the Colorado initiative is a “signal of things to come,” says Andrew Webber, president of the National Business Coalition on Health.
Employers first started providing incentives in regard to preventive services and chronic conditions, he says.
“Now, I think we will move in progression into more acute care and clinically based intervention strategies,” he says. “I think the basic theme here is we should be rewarding the higher-value services.”
The first three procedures selected by the Colorado school district—colectomy, gallbladder and hysterectomy—were chosen in part due to their potential cost savings and reduced time away from work. In mid-2008, bariatric surgery and appendectomy were added.
Laparoscopy Adoption Rates
The Colorado Springs school district compared laparoscopy rates before and after its educational effort. The after data was collected for calendar year 2008. Bariatric surgeries and appendectomies were added July of that year, and the remaining three procedures in July 2007.
Source: Ken Detweiler, Colorado Springs School District 11
Working with its insurance administrator, the school district provided education via newsletters and e-mails. Employees also pay a lower co-pay for laparoscopy than they do for a procedure using the larger incision: $200 less for outpatient surgery and $400 less if hospitalization is needed. They also were given a list of local surgeons who perform laparoscopy.
It’s the source of that educational literature that makes Michael Gusmano, a research scholar at The Hastings Center, a bioethics research institute, a bit uncomfortable. While such employer-driven efforts might be well-intentioned, it’s a “bit of a problematic scenario,” as he describes it.
“I wouldn’t want my employer, who has a direct financial incentive for having me take the cheaper [medical] option, to be the one charged with providing me with all of the relevant information,” he says. “There is a legitimacy and a trust issue here, I think.”
Previously, employees weren’t necessarily aware of their surgical options. Instead, they simply used the surgeon to whom they had been referred, Detweiler says. After all, he points out, laparoscopic techniques date back some 20 years, but that doesn’t mean the patients always knew about them.
“The question is, why would I have a 28 percent adoption rate on hysterectomies,” if not for the fact that employees hadn’t previously realized they had an option to traditional surgery?
By calendar year 2008, 100 percent of the school district’s gallbladder and bariatric surgeries involved the use of small incisions. Of the five surgeries in the program, only appendectomy fell below 81 percent usage of laparoscopy, in part because the surgery tends to be an emergency procedure with less opportunity to pre-select the surgeon, Detweiler says. If the laparoscopy rate had exceeded 85 percent for all five procedures, the school district would have saved $127,000 across the two years studied, ending in fiscal year 2007, he says.
The American College of Surgeons hasn’t taken a position on such employer initiatives, according to a spokeswoman. But a surgeon whom the college suggested to comment, but who was not speaking for the college, said that employers should keep in mind that not all surgeons are equally skilled or trained.
“Not all surgeons are good at everything,” says Dr. Daniel B. Jones, chief of minimally invasive surgery at Beth Israel Deaconess Medical Center in Boston. One way for employers to check surgeons’ training, he says, is to ask if they hold a certification in the fundamentals of laparoscopic surgery or have completed laparoscopic training following their general surgery fellowship.
Detweiler says the school district doesn’t review the surgeons’ training or the number of procedures they perform. But the district does make sure that employees aren’t penalized if medical necessity requires a larger incision, he says, responding to a concern raised by The Hastings Center’s Gusmano.
If the preauthorization coordinator makes that decision, or the surgeon changes approach mid-surgery, the employee doesn’t pay the higher co-pay. “I’m not out to make a couple of hundred bucks on co-pays,” Detweiler says. “I’m more interested in getting them back to where they want to be. Back to work, return to their normal lifestyle.”
Launching the initiative was inexpensive, amounting to a few meetings and some educational materials. The primary investment was the cost of the reduced co-pay for laparoscopy patients, Detweiler says. Thus, for each dollar spent, the savings ranged from $5.7 for a colectomy to $26 for gallbladder surgery.
That analysis, he adds, doesn’t include other costs, such as reduced physical therapy and pain medication with the smaller incision. Neither does it factor in lost educational time and the cost of a substitute, which rings up an additional $90 per day.
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