Cardiac & Vascular Trends 2005-2010

Richard N. Beveridge, MBA
Richard N. Beveridge, MBA
Over the past decade, many trends have impacted cardiac and vascular services. Two of the most notable trends occurring in the cardiovascular (CV) arena are the projected increase in population in age categories which utilize cardiac and vascular services predominantly, and the impact that technology advances, particularly the drug-eluting stent, have had on procedure utilization. Over the next 15 years, as the baby-boomer generation enters the Medicare population, demand for CV services will increase. In addition, technology advancements in percutaneous coronary intervention (PCI) capabilities, primarily as a result of the drug-eluting stent, have dramatically transitioned coronary intervention from CABG surgery to PCI. In 2005, many of the trends experienced over the past three to five years will continue, with fairly significant shifts in procedure types and volumes, as a result of technological progress, clinical expertise and the experience of cardiovascular specialists, primarily the cardiologists. Some of the trends that will affect cardiac and vascular services in 2005 include the following: Population Growth The next two to three years, as the baby boomers begin hitting the 65 years of age and older, will be extremely important years for cardiac and vascular services in establishing utilization patterns. In 2005, the significant growth trend in the age categories comprised of persons who typically utilize cardiac and vascular services, i.e., 45-64 years of age and 65 years of age and older, will continue, with many of the baby boomer generation entering the Medicare population. Technology Technology advances will continue in the cardiac and vascular service arena. The trend towards less invasive diagnostic capabilities for diagnosing coronary heart disease will continue. Advancements in CT and MRA imaging will continue and in combination with other imaging modalities, such as PET, will allow CAD to be diagnosed more readily and become the modality of choice over the next decade. Cath labs will focus primarily on interventional procedures in the future as the non-invasive diagnostics improve and become accepted. Procedures The growth in PCI procedures will continue upward. As shown in the chart below, the ratio of PCI to CABG is getting larger with each passing year. 2001 was a watershed year for PCI and CABG, with the number of PCIs doubling over the number of CABGs for the first time. PCI without Onsite Surgical Backup The trend towards more cath lab programs performing emergent and elective PCI procedures without on-site open-heart surgical backup will continue in 2005. There are currently approximately 30 states in the U.S. that allow PCI without on-site open-heart surgery. Eleven states require on-site open-heart surgery to be able to perform PCI. Shown on the map in Figure 3 are the states where Richard Beveridge & Associates, Inc. is aware that there are programs performing either emergent and/or elective PCI without on-site open-heart surgery. Information Systems Investment in information systems will be a crucial component of hospital budgets over the next few years. Participation in national and regional databases for cardiac and vascular services will increase to meet the standards established by national health care watch groups, payers and benchmarking organizations. Construction The construction boom in hospitals will continue in 2005 and through the remainder of the decade. Hospitals will update physical plants and facilities to better serve the demands that the aging population will have on health care services. Much of the construction will focus on centralizing services within the facility along service lines and/or the development of hospitals within hospitals approaches, to better tailor services to meet the needs and demands of patients. The acuity adjustable bed will also become more common. Healthcare Reform In 2005, healthcare reform initiatives will continue to slowly emerge, primarily involving Medicare reimbursement and drug benefits. The malpractice insurance crises will continue, with discussions on tort reform increasing, given the current Republican control in the House and Senate. However, since a majority required to pass legislation is not available, the prospect for any major legislation on tort reform is small. Insurance companies will continue to raise premiums at double digit rates. As a result, the number of uninsured persons in the nation will rise. Healthcare providers will be pressured to establish payment policies for the uninsured, which reduces the traditional cost shifting that often occurs in the market. Pharmaceuticals Pharmaceutical advances will continue, but with fewer drugs being introduced in the U.S. as a result of recent drug recalls and claims of pharmaceutical companies knowingly distributing drugs that have potential harmful and/or lethal side-effects. Turf Wars The potential for turf wars among cardiovascular specialists will increase in 2005, fueled by carotid stenting and the expansion of vascular services. As carotid stenting devices are approved and readily available in the market, turf battles among cardiologists, interventional radiologists, vascular surgeons and cardiac-thoracic surgeons will heat up. Most likely, cardiologists will take the lead in the carotid stenting since cardiologists control a majority of patients who may need the procedure. The trends leading into 2005 appear to be very favorable for cardiac and vascular programs. These programs should continue to experience growth in patient and procedure volumes in most areas. The one exception is that open-heart surgery will most likely continue to experience a decrease in case volume as a result of increased PCI volumes. Profitability of cardiac and vascular services will be less as a result of the transition away from the more profitable open-heart surgery procedures to the PCI procedures. Contribution margins should still be favorable for most programs. Author Richard Beveridge can be contacted at rbeveridge@rbaconsult.com