Hiding in Plain Sight.....Breaking Bad (Wounds)

I’ve been working on revolutionizing wound care delivery through a managed care model that I refer to as a “double disruption” model (described below). My approach gives patients an unparalleled initial standard of care while drastically lowering costs: both the cost of the particular episode of care AND, more importantly, the cost of all the eliminated modalities, such as negative pressure; hyperbaric therapy; costly grafts that require multiple applications; ER visits and inpatient admissions; and costly -and often repetitive- amputations. When I meet with risk-bearing providers and with insurance company payors, I stress two things: (1) even if you don’t realize it, your wound patients are among the highest acuity patients that you have (2) your cost for treating chronic wounds is significant; but, it’s buried among many specialties. In short, chronic wounds are the most significant problem that you probably don’t realize that you have. Through experience, I have found the ones who are quickest to believe me are the folks who have dealt with chronic wound patients who were part of their family. When it hits home, it becomes real. Until then, it’s just theory: mine against theirs.

The aforementioned being said, if you’re a naysayer, I want to deliver the facts…and then hopefully deliver the goods to help you solve the biggest issue you don’t realize you have. I went in to writing this article believing that the wound care sector in the United States was about $28 billion annually; only to learn that the first targeted study of Medicare’s spend alone for treating chronic wounds showed that costs exceed an estimated $31 billion annually, with a wound incidence rate approaching 15% of the Medicare population! Furthermore, the mortality rate for chronic wound patients, as I’ll discuss below, is mind-blowingly high. So, please read on and learn the salient facts that I’m happy to share. This just may change your perspective.

I recently was watching an episode of Breaking Bad with a long-time friend of mine who was a CEO for a major West Coast (million plus lives) Managed Care Organization. During one particular scene, Walt White was talking to the kingpin, Gus Fring, and Gus commented to Walt: “I hide in plain sight; just like you.” I turned to my buddy and said, “That’s exactly what patients with chronic wounds do. They hide in plain sight; and most managed care executives, managers, and front-line workers don’t realize how pervasive chronic wound patients are or how they drive costs; because many costs are buried in multiple disease state categories or within DRG costs that are tied to a disease state.” These are the type of discussions that managed care nerds have when attempting to distract from work life. We can never really separate from work though.

My friend, in response, told me, “Mike, I ran a big organization and we were all about data; probably one of the most data-driven companies out there. And, if you asked me if I had a wound care problem, I would have told you emphatically NO! Then, one day, we made a strategic decision to set up a medical center to which we’d assign the 1% of membership that generated the highest costs. That 1% of membership generated a whopping 22% of our total costs! Once we assigned those high costs members to a central location for complex care management, guess what?  One thing stuck out like a sore thumb: almost ALL of those patients had wounds. It took that sort of centralization of high cost patients to one medical center location to shine a light of transparency on chronic wound patients. Once the light was shone, we could see that chronic wound patients were consistently among our highest cost patients that generated the most cost to the MCO. Wound care then became one of our biggest areas of focus; once we realized that it was actually a problem. I guess you could say that before we centralized complex care management, those patients were simply ‘hiding in plain sight.’” He went on to say, “Mike, when we centralized the highest cost members to one center, and we saw the wound prevalence, we had an ‘oh shi%’ moment.” To which I replied, “That’s why I’m trying to create a ‘no shi%’ solution!”

Hmmm…costly patients being under-treated for wounds; but still among the highest cost patients out there? How is it that these folks could / can hide in plain sight? The answer is pretty simple: we tend to focus on diseases; not symptoms. According to Nussbaum, et al. “The rough prevalence rate for chronic nonhealing wounds in developed countries is 1% to 2% of the general population, similar to the prevalence rate for heart failure.” There are charitable relay races, walk-a-thons, and the like to combat the related issue of underlying heart disease; but, nothing really out there to help the folks in the general populous who suffer from chronic wounds and who undergo multiple infections and perhaps even multiple amputations by virtue of insufficient proactive care. For chronic wound patients, we really need to start treating that symptom -the chronic wound- as we would a disease if we want to improve outcomes. That involves early identification and utilizing the appropriate technology to improve the outcomes and to lower the episodic cost of care.

According to Cancer.Net, about 67% of all cancer survivors were diagnosed more than 5 years ago. Applying that simple math to all who suffer with cancer, we can readily discern that about 33% of patients with cancer will die within 5 years of being diagnosed. According to Cancer.Org, somebody newly diagnosed with prostate cancer in 2016 would have a 5-year relative survival rate of 99%. Somebody diagnosed in 2016 with breast cancer would have a 5-year relative survival rate of about 89%. Compare that to an outcomes study that presented in the June 2011 Edition of Wound Repair and Regeneration. That article basically followed 1,815 chronic wound patients over a 2-year time period. Of the 1,815 chronic wound patients, 28% (504 patients) died within 2 years. That being said, the mortality rate of chronic wound patients over a two-year time period is not markedly off from the mortality rate of all cancer patients over a 5-year time period. Furthermore, that two-year mortality rate for chronic wounds far exceeds the mortality rate of many cancers that have dedicated awareness months, etc. Why the lack of parity for chronic wound patients compared to folks with cancer or heart disease? The answer is pretty simple: we tend to focus on disease states.  Cancer is a disease; heart disease is - by definition - a disease. Chronic wounds are not a disease; however, they are a symptom for many diseases. Interestingly that same article on chronic wound mortality rates indicated that the top 3 comorbidities for folks with chronic wounds were, in this order: cardiovascular disease, diabetes mellitus, and peripheral arterial disease. And, of the 504 patients studied who passed away within 2 years, during that 2 year final time period, nearly 52% had wound infections; approximately 24% had gangrene; 17%+ had amputations; and only slightly more than 18.5% were hospitalized with a wound DRG. Once again, hiding in plain sight!

Okay, we talked about mortality rates and the fact that many chronic wound patients are hiding in plain sight while a somewhat associated disease state is addressed; but, the major symptom remains under-treated. Now, let’s take a look under the hood and explore costs in greater detail. My number one contention to the managed care folks is that wound care costs are among the highest costs that you have; however, the cost aren’t generally accounted for as wound care costs; rather, they are buried among the costs of other episodes of care, generally related to other disease states. If you thought the mortality findings for chronic wound patients were staggering, I hope that you’re sitting down. Wound care costs, just like wound care patients, are also hiding in plain sight.

In January of 2018 an article was published by the International Society for Pharmacoeconomics and Outcomes Research (ISPOR), and it’s billed as the first comprehensive review of Medicare data related to chronic wound incidence and cost. The study took a retrospective look back at the 2014 Medicare 5% limited data set. The costs captured within the 5% sample were multiplied by a factor of 20 to represent the entirety of costs among the Medicare Advantage population (assumed that total M.A. spend was proportional to the FFS spending for Medicare and that total payments to M.A. plans was equal to 28% of the Medicare FFS spending). Interestingly 14.5% of the population had at least one wound that fell into the chronic wound category in the year studied (that’s about 8.2 million Medicare beneficiaries).  Looking at wounds only as a primary diagnosis, the total spend was about $28 billion per year. If wounds were included as a secondary diagnosis, the total costs ranged from $31.7 billion to a staggering $96.8 billion! Personally, I think that the $31.7 billion figure is pretty good since it includes wounds as a primary or secondary diagnosis and attempts to pinpoint only the attributed portion as secondary. For example, if there were 10 secondary diagnoses and just one diagnosis was a wound, then 1/10 x 50% of the total claim payment would be attributed to the wound; makes sense. Let’s exclude surgical wounds -which actually impacted 4% of the overall Medicare population- and look at a few other categories of chronic wounds not caused by a surgery; and, let’s look at the result of each type of ulcer or wound in isolation. Here were the mutually exclusive prevalence rates, based on a percentage of the overall Medicare population:

Diabetic Foot Ulcers:     3.4%

Venous:           2.3%

Chronic Ulcers:                2.3%

Pressure Ulcers:               1.8%

Sub-Total:                        9.8%

I listed the wound types above, because I believe that they are the sweet spot for early identification within the Medicare population. If you can identify these wounds early, you can stave off a lot of downstream costs. Accordingly, if you were a PCP with a Medicare panel of about 1k lives, you should expect about 8 patients per month with one of the wound types above; as a rule of thumb. In higher diabetic catchment zones, such as South Florida, you should expect more.

Unfortunately, here’s what happens when a wound goes untreated or unidentified in an outpatient environment: decisions then are made not by the PCP; but, by family and peers. For example, Edna is a 70-year-old diabetic patient with neuropathy. She cut her foot last week and didn’t realize it. She’s out with the girls from the bridge club and one of them comments on the nasty wound that Edna has. Comment #1 has to do with how nasty the wound is and comment #2 is never, “You better go see your PCP.” Nope, it’s a safe bet that Edna will be told, “that’s a pretty nasty and serious wound, we better get you to the Emergency Room to get that checked out.” No doubt Edna will be admitted under a DRG related to diabetes complications rather than a wound-related DRG and the short stay will cost well in excess of $5k (not to mention that she’ll be discharged with the same unhealed wound, because the inpatient hospital stay will be too short to assure wound closure). What’s the benefit of that visit?  I can’t tell for sure; however, the cost is certain and it’s 100% preventable if patients get used to going to the PCP for the initial wound and they see that wounds can be closed quickly and easily using biologics as a front- line treatment; at a fraction of the cost of that preventable admission.

The PCP-centric model matters because it’s the primary care physician who controls the financial risk. The current modus operandi for wound treatment is a “see and refer” model wherein the PCP sends the patient for a referral to a wound care provider who tends to “maintain” the patient rather than heal the patient. The result? The person who controls risk loses control of that patient and the wound “maintenance” provider ends up basically writing checks against the PCPs’ pool of risk funds.

Next, imagine a PCP office using my “Double Disruption Model” of treating wounds. Disruption #1 is the application of disruptive technology. This involves taking advanced biologic technology that HMOs would typically deny except in rare instances for limb salvation. We basically take the FDA cleared advanced stabilized collagen ECM graft (that has a product-specific HCPCS code and is typically provided under inpatient or ASC bundles, and is allowed by most CMS MACs) for which we’ve negotiated aggressive rates directly with the manufacturer (without multiple distribution channel mark-ups that are generally seen, absent of our model) and we shift the graft to the PCP setting under our bundled case rates. The patient gets a higher standard of care than they’ve ever initially been allowed to receive and the episode of care cost is generally about 80%+ lower than outsourcing to traditional managed wound care providers who tend to “maintain” wounds rather than heal them.  Disruption #1 is the disruptive technology. Disruption #2 involves disrupting the site of service from a referral out to a service that is maintained at the PCP center. It’s simple, yet robust. The wound maintenance providers are high touch / low tech providers. We enable the PCPs to treat patient wounds with a high tech / low touch delivery model.

Recently, I met with another managed care friend in Florida who is heading up a new M.A. plan. His comment to me was, “Mike, wound care is always a hassle to deal with. They stick their tentacles in the patients and milk the FFS or case rates forever; and when they fail, they just move on to a new treatment modality.  Yet, nobody knows what the true costs are for these patients because costs for wounds are buried in multiple specialties. Anybody who comes to me wanting to talk about providing wound care services, I generally view as somebody who is a ‘bail bondsman of the managed care world.’ But, when I heard that you had created a solution, I was actually excited about hearing about it; because you always create unique models that save money and bolster outcomes. You don’t copy what everybody else has done. I can see that you have no interest in maintaining wound patients; rather, you just want to close their wounds quickly and cost effectively. That’s refreshing.”

The aforementioned being said, here are a couple of recent cases that were performed in the PCP setting, with NO REFERRAL OUT TO A WOUND CARE PROVIDER.

Patient #1

This is a day 0 photo of a patient who presented at the PCP’s office with a vasculitic ulcer that had remained open for a couple of months. It’s approximately a low grade 3 wound.

Patient #1 had a 15 minute office visit to apply the advanced biologic ECM graft and the patient had two 8 minute follow-up exams.

Patient #1 had shown up for the third weekly follow-up exam and the wound was fully closed sometime prior to day 24. Once again, the patient was treated with A SINGLE biologic graft that closed the wound quickly and cost effectively. Savings compared to outsourcing to traditional wound care was approx.. 80%+. Reference heal time if outsourced: 12 - 15 weeks with about a 66% success rate for any given modality. Note: the redness at the 10:00 position is not the formation of a new wound; rather, it’s from tape irritation, as you could note the tape position in prior photos.

Patient #2 had a much larger wound than patient #1. This wound was a painful venous ulcer that had likewise been open for quite some time. This was the day zero photo of the applied advanced biologic graft.

Here is Patient #2’s 6-week photo, indicating full closure with a SINGLE GRAFT APPLICATION. Once again, this patient was treated in the PCP setting with a savings of 85%+ compared to the health plan’s preferred wound care vendor. Venous ulcers of this sort can often take 100+ days to heal…once again with the traditional wound “maintenance” provider having about a 66% success rate for any given modality. Additionally, the patient complained of no pain after the graft application; while having significant pain prior to receiving the graft.

These are the photos that no wound “maintenance” provider ever wants you to see. This is the reality, right there in color photos. Patients can be effectively treated in the primary care setting with no need at all for a referral out to traditional wound maintenance providers. The paradigm has shifted and my company is actually “breaking bad” wounds. I’m doing my best to not hide in plain sight and to let you know that this innovative solution actually exists and can be quickly and easily implemented almost anywhere. Please reach out to me if you’d like to learn more: mlynch@Trinity-Pharmaco.com