Minimally invasive surgery: a payer's point of view

In a 1990 "Sounding Board" article in the New England Journal of Medicine,* Newcomer described some of the challenges in using the term "experimental" or "investigational" as an exclusionary criterion for insurance coverage. The focus of the article was a discussion of the various options for producing a consistent, legally defensible, competitive, and marketable process for making negative coverage decisions. Not discussed were the dilemmas faced by third-party payers when a positive coverage decision is made.

One might assume that a positive coverage decision, reflecting a consensus that the technology is safe, effective, and broadly accepted by physicians, would end much of the controversy. However, coverage of a new technology is often based on a demonstration of its technical capabilities. Once a technology is covered, and thus allowed to diffuse, additional issues of patient selection criteria immediately arise. Initial coverage of a technology is often encouraged because of its cost-effectiveness. However, the true cost of a technology cannot be appreciated until there is diffusion. Cost effectiveness often disappears with widening patient indications and increasing utilization. Experience with minimally invasive surgery is illustrative of these points.

Starting with the success of laparoscopic cholecystectomy in the late 1980s, enthusiasm for laparoscopic techniques has spread rapidly. Patient selection criteria for laparoscopic cholecystectomy have rapidly broadened and other laparoscopic surgeries, ranging from laparoscopic selective vagotomy to laparoscopy-assisted hysterectomy to laparoscopic kidney resection, have proliferated quickly. When initially presented to payers, laparoscopic cholecystectomy was described as essentially the same surgery as open cholecystectomy. Added benefits of laparoscopic cholecystectomy included rapid patient recovery, related to the minimally invasive nature of the surgery, and decreased cost, related to the shortened hospital stay. Initially, it appeared that the major issue was credentialing, because most surgeons had to undergo additional training to master laparoscopic techniques. While the scientific evidence of the safety of the technique may have been in development, insurers were persuaded by the argument that laparoscopic cholecystectomy represented a different approach to the same surgery. In addition, the lower cost of laparoscopic cholecystectemy was appealing.

From the insurers' point of view, in the experience over the past several years, the technique has not lived up to expectations. While laparoscopic cholecystectomy has undeniably been of great benefit to properly selected patients, Aetna has seen the total number of cholecystectomies rise, primarily because of the number of laparoscopic procedures. These data suggest two immediate possibilities. First, patients with gall stone disease may present earlier for definitive surgical treatment. Previously, the option of open surgery served as a natural deterrent to those with limited episodes of gall bladder pain. Watchful waiting was an attractive option. Now, the decreased morbidity associated with laparoscopic cholecystectomy has changed the risk-benefit ratio such that laparoscopic cholecystectomy may be suggested after an initial bout of gallbladder pain.

The second possibility is that the above argument is a generous interpretation and that some laparoscopic cholecystectomies are not medically appropriate. In defense, some might argue that the standard of appropriateness must be flexible and not fixed to an outdated risk-benefit ratio. The net effect is that insurers must grapple with the appropriateness of the increased utilization that is typically seen when a new technology becomes readily available.

The cost profile of laparoscopic cholecystectomy has also not lived up to expectations. Because of increased operating time associated with laparoscopy, the higher cost of disposable equipment, and the typically higher physician fee, the anticipated cost savings per patient are minimal at best. Considering the increased volume of patients, it is likely that laparoscopic cholecystectomy has resulted in a net increase in costs.

As mentioned earlier, one of the stated benefits of minimally invasive surgery in general is that it is cost effective, based primarily on the shortened hospital stay and/or an earlier return to work. Cost effectiveness is obviously a laudable goal, but the term is used loosely. A statement of cost effectiveness rarely indicates who benefits from the cost savings: the patient, the policyholder, the insurer, or society at large. In many instances, the cost is borne by the insurer while the savings are enjoyed by another; cost effectiveness is an illusory concept for the insurer's bottom line.

Endoscopic release of the carpal ligament is one example of this phenomenon. Unlike laparoscopic cholecystectomy, where a shortened hospital stay is a major quantifiable benefit, release of the carpal ligament, whether open or closed, has always been an outpatient procedure. Because of increased equipment costs and longer operating room time, the closed procedure is more expensive per patient. However, it is thought that the closed procedure is associated with a decrease in postoperative pain and tenderness and an earlier return to work. The argument for cost effectiveness has been based on the earlier return to work, but this benefit is primarily enjoyed by the employer. Even if the employer has a self-funded plan, accounting for health care costs and worker productivity are distinct and the employer will only "see" the increased costs of a closed procedure.

Elusive cost benefits are also associated with minimally invasive surgical procedures that replace life-long dependence on drugs. Laparoscopic selective vagotomy for ulcer disease and radio frequency ablation of aberrant conducting pathways of the heart are two examples. As it first evolved, radio frequency catheter ablation was reserved for patients who could not tolerate or who could not be adequately controlled on drug therapy. As increasing evidence demonstrated the short-term safety and effectiveness of the procedure, radio frequency catheter ablation has emerged as a first-line treatment, initially for patients with symptomatic Wolff-Parkinson-White syndrome and more recently for patients with atrioventricular nodal reentry. Insurers now are presented with a large up front cost of treatment that previously would have been spread over a lifetime and typically would be borne by multiple insurers as a patient switched health plans. Laparoscopic vagotomy is following the same evolution. Although the procedure is now restricted to patients who cannot tolerate drug therapy, advocates of laparoscopic vagotomy hope that one day the patient selection criteria will broaden.

COPYRIGHT 1993 American College of Physician Executives
COPYRIGHT 2004 Gale Group