1. Costs, Charges and Reimbursements in BMT: Is there any Good News for the Future??? Costs, Charges and Reimbursements in BMT: Is there any Good News for the Future??? John Kersey MD

2. 2009 ASBMT Corporate Council Meeting 2009 ASBMT Corporate Council Meeting Status of Health Care Reform in the US –Will insurance coverage be mandatory?? Massachusetts “Romneycare” as model –Insurance Exchanges? –Increase in government as payor (Medicaid and Medicare)? –What about reimbursement limits? My 2009 predictions vs reality

3. 2011 Phoenix Meeting 2011 Phoenix Meeting Reimbursements –Changing Payer Mix –Reimbursements for Clinical research Dr. Keith Sullivan Costs –Current Inpatient Costs How will we reduce costs in the face of decreasing reimbursements??

4. Payer Mix in Minnesota BMT Program in 2010 Medicaid MedicareNon-government Pediatric 20% 2%78%, largest Blue Cross Adult 16% 16%68%, largest Optum/URN

5. Increase in Medicaid patients in Minnesota BMT Program in 2010 We had 34 vs 21 average in previous years –A significant increase compared to the 2007-2009 period

6. Government Payors Medicare, Medicaid and other government-sponsored programs –Pay a predetermined, fixed rate (e.g. DRG) for inpatient services and a fee schedule for outpatient and physician services –Payment rates are usually low and often below cost –EXPECTATION FOR GOVERNMENT PROGRAMS (ESPECIALLY MEDICAID) TO INCREASE UNDER AFFORDABLE HEALTH CARE ACT Of 2010(OBAMACARE)

7. Reimbursement Issues Medicaid cases are increasing relative to commercial payers in part due to unemployment and the economy Medicaid reimbursements are as low as 10% in some states Network participation of BMT programs increases reimbursements National organizations (such as OptumHealth and Life link) are increasing used by insurers for payment and eligibility issues _____________________ Payers have difficulty risk-adjusting reimbursements

8. BMT Programs have relied on Commercial Payers to Maintain Margins Blue Cross, Aetna and other contracted payers –Designated transplant centers networks in their network –Case rates and days covered in the global period are different in every contract –BMT centers must rely on “outlier reimbursements” maintain margins

9. When reimbursements fall, how do we reduce costs to maintain margins?

10. Minnesota Study of Cost of Adult BMT Majhail/ Weisdorf Biol.Blood Marrow Transplant 2009:15,84 Consecutive adult (≥18 years) allogeneic BMT recipients (2004-2006) –294 patients

11. Four groups of patients in Minnesota Cost Study Myeloablative Matched Related Donors (MA MRD Myeloablative Umbilical Cord Blood (MA UCB) Non-myeloablative Matched Related Donors (NMA MRD) Non-myeloablative Umbilical Cord Blood (NMA UCB)

12. Multivariate Analysis for Survival Variables a Relative-risk (95% confidence intervals) P-value Transplant type MA MRD1.00.59 MA UCB1.1 (0.7-1.6)0.85 NMA MRD0.8 (0.5-1.2)0.21 NMA UCB1.0 (0.6-1.5)0.98 Graft failure No1.0<0.001 Yes3.6 (2.2-5.9) Dialysis No1.00.001 Yes2.1 (1.4-3.3) Mechanical ventilation No1.0<0.001 Yes4.4 (3.1-6.2) a Other variables considered in the model included age at transplantation, gender, KPS score, disease risk, history of previous transplant, CMV status, HLA match, graft source, acute GVHD and occurrence of hepatic VOD

13. Methods: Cost Information Obtained cost info from day -30 through day +100 –Both direct and indirect costs –Cost categories: Graft acquisition Laboratory services Radiological investigations Pharmacy services Room and board Blood components Other services –Information not available for: Physician charges Patient intangible costs

14. Costs Higher in Myeloablative and MRD cases Total costs by conditioning (first 100 days) –MA HCT = $137,112 –NMA HCT = $84,824 –P<0.001 Total costs by graft source –UCB HCT = $137,564 –MRD HCT = $83,583 –P<0.001

15. Cost Predictors Variables a,b Relative-risk (95% confidence intervals) P-value Transplant type MA MRD1.0 MA UCB1.3 (1.1-1.5)0.05 NMA MRD1.0 (0.9-1.2)0.82 NMA UCB1.0 (0.8-1.2)0.96 Graft failure No1.0 Yes1.8 (1.7-1.9)<0.001 Dialysis No1.0 Yes1.3 (1.1-1.5)0.05 Mechanical ventilation No1.0 Yes1.3 (1.2-1.4)0.004 Hospital stay, tertiles c <32 days1.0 32-48 days1.0 (0.8-1.2)0.98 >48 days2.1 (1.9-2.3)<0.001 a Other variables considered: age, KPS score, disease risk, previous transplant, CMV status, acute GVHD, hepatic VOD and total medical encounters in days (by tertiles) b Excluding costs of graft acquisition c Total hospital stay in first 100 days post-transplantation

16. 33% 32% 4% 11% 18% 2% 31% 30% 5% 14% 17% 2% 40% 27% 6% 13% 12% 3% 38% 36% 11% 3% 7% 5% $1023 $2082 $612 $1156 Costs Per Day Survived

17. Conclusions from Minnesota Study Umbilical Cord Blood transplants are available to patients lacking a matched related donor. –However, costs are higher than matched related donor transplants (both myeloablative and nonmyeloablative) Severe post-transplant complications and prolonged hospital stay are critical determinants of cost

18. What’s Next? How will we reduce costs? Standardization of protocols is likely to be the most important –Avoid non-proven labs and radiology –Reduce pharmacy, hospital stay –More research protocols designed to reduce complications

19. Costs, Charges and Reimbursements in BMT: Is there some good news for the future??? Yes, our field has high costs but costs will be (hopefully rationally) reduced based on: a) standardized protocols b) research progress