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medi

  1. 1. Medicare & Drug Eluting Stents BY: Payal Mittal Sunaina Chopra Tanishq Arora Sameer Patnaik Kavita Dugar Alisha Batra Vimarsh Meghna Diksha
  2. 2. Introduction About the Case • Drug eluting Stent(Cypher) was a major breakthrough in treatment of heart disease, when the United States FDA approved it for surgical procedures. • This case deals with the aftermath of increase in demand of such stents, in terms of cost and quality of medical services. • It presents the effort to bridge the effect of high cost on its stakeholders – Patients, Hospitals/Doctors and Insurance Companies.
  3. 3. Coronary Heart Disease • Coronary artery disease (CAD) also known as atherosclerotic heart disease, coronary heart disease, or ischemic heart disease (IHD), is the most common type of heart disease and cause of heart attacks. • The disease is caused by plaque a waxy substance builds up inside the coronary arteries
  4. 4. Coronary Heart Disease
  5. 5. TREATMENTS
  6. 6. What is Stents ? A stent is a small mesh tube that used to treat narrow or weak arteries to keep the arteries open in the treatment of coronary heart disease
  7. 7. Case Facts • Heart Disease is the number one cause of death in United States. • In 1968 , Medical Researchers developed a technique called Bypass Surgery to treat blocked artery. • More than 5,40,000 bypass procedures were done in U.S. till year 2000. • Since 1996, decline in Bypass procedures
  8. 8. Case Facts s ty t a p l en g io c s t in n f a rdia ccur in 3 %o ca s o ts 0 -8 lve osi tien s 70 vo en pa th in est % on R 30 6 m 20 an e th siv inva ys L e ss ss r da a we byp ires fe ve i u Req expens appen Less nosis h s h te Res 6 mont in 3 First discovered – cypher stent – 2002 approved in – 2003 Taxus expressed – 2004 Restenosis occur in 8% of patients in 3-6 months
  9. 9. Angioplasty Trend
  10. 10. Stents Popularity
  11. 11. Relative Trend between Life Expectancy of People and Government Expenditure on Health of the citizens $ 4539 $ 2671 35.5 % US Germany Per Capita Health Expenditure 35.6 % Life Expentency at Age 65
  12. 12. What Is Medicare? A health insurance program for – People 65 years of age and older – People under age 65 with certain disabilities
  13. 13. The Medicare…. • A Health insurance plan funded by US Government is a major purchaser of stents • It would increase the amount of reimbursement for an angioplasty procedure involving coated stents
  14. 14. Role of Medicare Annual Survey- To determine the costs of procedures, products and services. Then determines the amount to be reimbursed and pays to the provider of the service The amount reimbursed is relatively low to the actual cost of the procedures
  15. 15. Cost for Medicare Cost to run a medical practice has risen every year while reimbursements from Medicare goes down every year
  16. 16. STENTS BUDGETARY IMPACT
  17. 17. EFFECTS ON INSURERS (MEDICARE) • Increase in cost due to improvement in quality by providing drug eluting stents • Lesser bypass surgery, save money in future • More expenditure by medicare, for public’s demand and increased usage by physicians and hospitals
  18. 18. EFFECTS ON HOSPITALS • In short run, lose money on each procedure as reimbursement by medicare is not sufficient • In long run, decline in profits and revenue due lesser bypass procedures • Hospitals have to ensure their competitive advantage and use drug elluting stents • Bypass surgeries could decline upto 20% of the profits
  19. 19. EFFECTS ON PATIENTS • Patients would prefer as they would not have to repeatedly go or get a bypass surgery done • The case of restenosis has been declining with the use of cypher stents as more and more people are getting aware of it • The reaction of patients to drug eluting stents also has impact on MEDICARE’S BUDGET
  20. 20. EFFECTS ON DOCTORS • The doctors will focus on providing quality of care to the patients • The doctors especially the cardiologists will have a fall in income as the angioplasties and bypass surgeries will reduce with increase in drug eluting stents
  21. 21. Cost Budgetary Impact on People and Hospitals
  22. 22. Budgetary Impact • Drug eluting stents has caused a problem to both the private insures and for medicare. • Drug eluting cypher stent as compared to incoated stents, the cost of procedure has increased by $2800. THIS IS PRIMARILY DUE TO TWO REASONS :
  23. 23. Budgetary Impact • Thus this has driven medical care cost up in short run • Approx 50% of all stent procedures are covered by medicare • Medicare decisions of using stents would have an impact on its budget of approx $100billion for inpatient hospital care in 2003. • Medicare said that it would reimburse the amount only if FDA approves that the total amount for the drug eluting stent cost more that the amount given by the Medicare .
  24. 24. Increase in cost • The short run cost increase by $2800. • This cost is offset in the long run as the CYPHER STENT saves $2500 in an year. REASON :- 1.Reduced level of restenosis 2. Reduces the number of bypass surgeries • Net loss $300 per procedure. • Which makes it ecnomically unfeasable.
  25. 25. Studying it from a marginal aspect
  26. 26. The case can be studied from two levels
  27. 27. INCREASE IN MEDICARE’S EXPENDITURE TOTAL NUMBER OF PROCEDURES 454000 PROCEDURES INSURED BY MEDICARE (50%) 227000 INCREASE IN REIMBURSEMENT $1,800 TOTAL INCREASE IN REIMBURSEMENT $408,600,000 Increase in expenditure approx. $400 million
  28. 28. FINANCING
  29. 29. THIS EXPLAINS AS TO WHY THE MEDICAL CARE COST INCREASES INSPITE ALL THE EFFORTS OF THE GOVERNMENT BETTER QUALITY LEADS TO HIGHER PRICES

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