First After Failure....
I’ve never really been the good slogan guy; you know, like the ad geniuses from the “Mad Men” era. Don’t get me wrong, I admire the heck out of the plumber who claimed that his company was “Number one in the number two business.” Succinct, comical, and memorable….that guy was good!
While the Don Drapers of the world are intent on selling the public something that they don’t really need, I’m taking a different approach: I want to educate the world of managed care on what exactly it is that they’re currently doing so that I can rationalize an insertion point that creates savings to the health plan and likewise creates improved outcomes for the patient. I want to provide them with something that they actually need at the correct placement point. And let’s face it: I’m not really “selling” them anything. If I can provide a solution that is a net savings to the health system, it actually costs them nothing. So, I’m not really a salesman at all. I’m a plumber. I’m the number one guy fixing a big pile of #2 that the industry has ignored. Easy enough to understand from a 35,000-foot conceptual viewpoint; but, that sort of tag line makes for a terrible billboard. Unfortunately, I need to use a few more words to explain my value proposition; so here goes:
Today, I want to talk about one type of wound; the DFU (or Diabetic Foot Ulcer). The key decision point for DFUs comes at 4 weeks. Since it’s a decision point, it should also be an insertion point for an alternative treatment; but, it’s not. I’ll explain what the industry does at the 4-week point (clue: the answer is nothing). In Seinfeld-esque fashion, here’s the story about nothing.
Much popular research indicates that as many as 6% of the diabetic population suffers from DFUs. If I were to come up with a slogan for my suggested approach, it would be this. When dealing with DFUs, we want to be “First after Failure.” First after failure……what does that mean? To understand this concept better, let’s examine a few things:
- What are the robust predictors of DFU closure?
- What are the HMOs doing to manage any of this?
- What are the success rates among initial DFU treatment modalities?
- What’s the potential to make an impact within the Medicare arena (in other words, what’s the incidence rate, juxtaposed against other outcomes and data?); and….
WHAT ARE THE ROBUST PREDICTORS OF DFU CLOSURE?
Way back in 2003, when it was impossible to turn on the radio without hearing Outkast sing “Hey Ya!,” a major study was performed that looked at Percent Area Reduction (PAR) of DFUs within a 4 week period of time as a predictor for successful wound closure within 3 months. In short, the study showed that midpoint between the patients who healed and did not go on to heal within 12 weeks was about 53% PAR at 4 weeks. In fact, there was a 91% negative predictive value that could best be summed as up follows: DFU wounds that did not reduce in size by 53% or more within the first 4 weeks of care had a 91% probability of not closing at all within a 12 week period of time. I’d say that’s a pretty strong predictor. This study was small, however, based on less than 300 patients. Here’s a link to that 2003 study by Sheehan et al:
https://care.diabetesjournals.org/content/diacare/26/6/1879.full.pdf
Another larger and oft cited study was performed by Margolis et al in 2003. That study looked at the predictive value of PAR at 4 weeks to determine closure at 20 weeks with a 76% certainty. That study looked at outcomes for more than 20,000 patients with diabetes. This large study validated the findings of the smaller study to show that 4 week PAR was a valuable predictor. As link to the abstract is as follows:
https://www.ncbi.nlm.nih.gov/pubmed/12766096
Well, the more things changed, the more that they stayed the same. Let’s jump from 2003 to 2010, when Lady Antebellum’s “Need You Now” song was out….there are few things less embarrassing than being at church with a 2 year old who decides to burst into the chorus of that song: “It's a quarter after one, I'm a little drunk, and I need you now. Said I wouldn't call but I lost all control and I need you now.” True story.
In 2010 Snyder, et al decided to do a post hoc study to further examine the 4 week PAR as a predictor. This study further validated that, regardless of the size of the baseline wound at the point of original presentation, a 50% or greater PAR is a strong predictor of the likelihood that the wound will close within 12 weeks. This study also got more granular and looked at PAR reduction at weeks 1,2,3, and 4 and found the highest significance of predictive value at the 4 week mark. I’m likewise attaching a link to that study:
So, what is the commonality among these studies? By the time that a DFU hits the 4 week treatment mark, you should have a high degree of certainty whether the routine, low tech, wound care approach currently being used will fail.
WHAT ARE THE HMOs DOING TO MANAGE ANY OF THIS?
In a nutshell, the answer to that question is: not much. It’s not uncommon for the HMOs to have a prior authorization procedure in place for wound care. Generally, a PCP makes a referral to somebody who holds themselves out as a wound specialist and an authorization is granted for a period of time. Using a quick Google search, I pulled up an example. Amerigroup of DC issues an authorization that mandates that the patient should be “seen by a physician within 30 days of the initial start of care” (seems to indicate that they’re okay with zero treatment of a medical plan of action for 4 weeks) with a POC (Plan of Care) updated every 6 months, “unless the member’s condition changes.” Reading between the lines, it would appear that this particular payor expects very little to progress within a 6- month period; if they are only requesting updates more frequently than 6 months in the event that the member’s condition changes from the baseline presentation. Here’s what I pulled from online. See for yourself:
https://providers.amerigroup.com/Public%20Documents/DCDC_CAID_PU_PRIORITYWoundCarePARequirement.pdf
Many Medicare Advantage plans also contract with wound care vendors to whom they pay episodic case rates. Mind you, the case rates generally cover a period of time to treat a wound without any guarantee of actually closing said wound within the episodic payment time frame. What happens if there’s failure? A new auth. is issued to cover a new time period. Typically, what I’ve seen in South Florida is 60 - 90 day approval windows for wound care episodes.
Okay, but what about that whole 4 weeks of DFU care being used as a predictor of failure? If there has been consistent and time-tested literature on this robust predictor of DFU failure, how many health plans mandate that a medical practitioner submit data to them at 4 weeks of DFU treatment in the event that the Percent Area Reduction (PAR) is less than 50%? While this might occur somewhere, I’ve never seen it happen. Once again, the literature has been around for 17 years. My son, who is currently submitting college applications was a baby in diapers when the 4 week DFU PAR criteria was established as a statistically significant predictor of current modality failure. So, at 4 weeks, we’ll know that a certain modality is ineffective (and therefore a new treatment modality should be approved); but, a treatment regimen that is predicted to fail is allowed to continue? “Managed” care is oftentimes oxymoronic.
WHAT ARE THE COSTS PER EPISODE OF DFU?:
A popular article from 2010 indicated that the average cost for a DFU episode was $4,595. The cost by Wagner Classification Grade was as follows. These findings were based on large employer sponsored plans’ data:
- Grade 1 or 2: $1,929
- Grade 3: $3,980
- Grade 4 - 5: $15,792
Another retrospective study that tied costs to Wagner Grade level showed significantly higher costs, with the average cost per DFU at $13,170 and the cost allocation among Wagner Grades as follows:
- Grade 1: $1,892
- Grade 2: $4,345
- Grade 3: $12,255
- Grade 4 / 5: $27,721
In both of the aforementioned examples, the cost of inpatient care was the driver of close to 80% of the total costs; indicating a great savings potential for early grade closure outside of the hospital.
This article also cites a study that revealed that wounds which healed without amputation cost about $6,664; and, those that healed but first required amputation cost $44,790. Suffice it to say, cost data can vary depending on the study; but, there’s a value to associated with rapid closure (as mentioned above) and there’s also extreme value added whenever a wound can be closed to the extent that amputation is prevented. The cost data referenced above was discussed within the Journal of Vascular Surgery in September of 2010. I have linked that article for quick reference:
https://www.sciencedirect.com/science/article/pii/S0741521410013248
WHAT ARE THE SUCCESS RATES AMONG DFU MODALITIES?:
A 2018 article by Fife, et al demonstrated a healing rate of about 30.5% for DFUs within 12 weeks and 45.1% when no period of time was specified; indicating that more often than not, the prescribed course of treatment does not work; AND, AS PREVIOUSLY MENTIONED AT THE START OF THIS ARTICLE, MOST MANAGED CARE PAYORS SHOULD BE AWARE OF FAILURE AT THE 4 WEEK MARK, but they tend to employ no automatic 4 week check-in to see if there’s 50% or more PAR. Nope, they just continue the course of treatment in hopes that every case is the exception to the statistical norm. I’m likewise attaching a link to this article for two reasons: (1) I very much enjoy her body of work and (2) Dr. Fife does a stellar job exposing what is inherently wrong with the system:
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5833884/
Okay, from the section above regarding the cost per episode per DFU, let’s look at the absolute lowest total cost per episode of $4,595. Let’s err on the side of absolute conservatism. Next, keep in mind, that’s the cost to treat a wound episode and NOT the cost to heal the wound (an episode can end in death or amputation…and is that considered success?). Next, let’s factor in the rates from the Fife et al study wherein there’s a 45.1% DFU healing rate, regardless of time (meaning that 54.9% of the time the system is paying $4,595 and getting no benefit from the expenditure). So, 100% of the time the system is paying $4,595 to close DFUs 45.1% of the time….so; the true cost to close a wound is actually more like this; if you follow this example. If you had 100 wounds at $4,595 and only 45 of them healed, you’d actually be paying a true cost of about $10,211 for every wound that heals (once you factor in the actual cost of the wounds that healed plus the opportunity cost of what was paid for the 55 wounds that didn’t heal)….and those are real hard dollars paid through the system and real patients who got zero benefit from the treatment. In other words, you’d be paying $206,775 for the 45 healed wounds at $4,995; plus, $252,725 for the roughly 55% that didn’t heal, using the number of healed wounds as the denominator to determine the effective cost to the system per wound actually healed. That’s ($206,775 + $252,725) / 45 = $10,211. I’m no math genius; but, I do have an MBA in Finance and I recently slept at a Holiday Inn Express. Suffice it to say, the system is not working…..and nobody is looking for DFU failures at week 4.
OKAY, SO WHAT IS THE OPPORTUNITY?
Let’s take a snapshot of the market. I’ve read recent articles that have indicated that as many as 7% of the diabetic population have a DFU at any point in time. When you couple DFUs with skin infections associated with the disease state, the total is more like 3.4% as a combined category. Furthermore, according to the CDC, there are about 9 million to 11 million folks over age 65 with diagnosed diabetes in this country (https://www.cdc.gov/diabetes/pdfs/data/statistics/national-diabetes-statistics-report.pdf).
But wait, let’s take a look at an actual slice of Medicare data; because this sample is interesting. According to the American Diabetes Association (Rice et al; March 2014), the rate of diabetes within a sampling of Medicare data is pretty mind blowing. A sample of 2,285,018 Medicare patients was taken at random, from a 3-year period of time. Among that random sample, 693,986 had a diagnosis of diabetes. A little quick math shows that more than 30% of the random sample had diabetes. 88,781 of those patients had a DFU during some point in the 3-year data. That’s 12.7% of the randomly sampled diabetics had a DFU….or 3.8% of the total Medicare population sampled. I’m looking at the raw numbers and not whittling things down for the three data elements that the authors used for further whittling (continuous eligibility in 12 months prior to and after the index date; age restriction of 65+; and no foot ulcer in the 12 months preceding the index date). Just looking at the pure number of Medicare patients in the data set, 30%+ are diabetic and 12.7% of those members had a DFU, according to pure, unfiltered data. Keep in mind, the data set is large, at 2.285 million + members over a 3-year time period. Here’s a link to the reported data:
https://care.diabetesjournals.org/content/37/3/651
So, the problem with diabetes is large and getting larger. And, as explained above members with DFUs tend to get an authorization and then get left alone. There is no stopping to look at DFU percent area reduction (PAR) at 4 weeks. Even if that patient shows signs of failure, it’s full speed ahead, damn the torpedoes. My contention is that patients who show failure at 4 weeks would be much better off receiving a stabilized skin graft at an aggressive price point; something designed not to break down during the inflammatory phase of healing. Something that will push them on toward the proliferative phase of healing to close the wound. I want Trinity Pharmaco-Solutions to be inserted as “first after failure” for DFUs. There are millions of reasons why (with a dollar sign in front) this makes sense for the managed care companies to consider.