Implications of Trends in the Marketplace for Neurovascular Diseases

CHARLES B. WILSON

Objectives: Upon completion of this chapter, the reader should be able to describe how government policy, insurance, industry, and an educated public will effect significant changes in neurosurgical practice over the next decade.

Accreditation: The AANS^* is accredited by the Accreditation Council for Continuing Medical Education (ACCME) to sponsor continuing medical education for physicians.

Credit: The AANS designates this educational activity for a maximum of 15 credits in Category 1 credit toward the AMA Physician’s Recognition Award. Each physician should claim only those hours of credit that he/she spent in the educational activity.

The Home Study Examination is online on the AANS Web site at: http://www.aans.org/education/books/controversy.asp

^* The acronym AANS refers to both the American Association of Neurological Surgeons and the American Association of Neurosurgeons.

The Market

This market, as most markets, is defined by products, providers, intermediaries, financing, and consumers. Products are a range of services for the treatment and prevention of three major categories of neurovascular disease: cerebral aneurysms, arteriovenous malformations and fistulas, and cerebral ischemia. Excluding intracerebral hemorrhage, these three categories represent the market under consideration. Providers are surgeons (neurosurgeons and vascular surgeons), radiosurgeons, endovascular surgeons (neuro- and cardio-interventionists) and nonsurgeons (principally neurologists). Physicians who play a crucial role in preventing cerebrovascular occlusive disease by instituting measures to halt or reverse atherosclerosis and to control high blood pressure and cardiac arrhythmias are not customarily considered as providers. The intermediaries in this market are insurers and, less often, large employers who do direct contracting. Consumers in the strict sense are consumers if they are unaware of their disease; they are patients when they seek care and may be either presymptomatic or symptomatic. For the sake of simplicity, both consumers and patients can be referred to as consumers because in whichever category they are or will be they consume services. Financing for the transaction between purchaser and provider has three sources—employer, government, and self—as either sole or joint payers.

The market for neurovascular disease, like most markets involving health and health care, is an imperfect market because of the asymmetry of product information. In the case of health care services, information belongs disproportionately in the hands of providers, and there is no safeguard against bias and self-interest based on financial and other considerations on the part of the provider. Today, the consumer and payer have sources of information that did not exist in the past, but much of it is difficult for the educated public to understand, and some that is understandable is incorrect. In this and every market, information is empowerment, and you need to think no further than Consumer Reports and Web-based sources of information in purchasing an automobile or a new computer. It is this dissonance between the public’s ability to obtain information about every other industry and their inability to obtain information about the health care industry that has led to their insatiable desire to read, see, and hear anything about health from any accessible source.

Trends in the 2010s

Public Policy

A continuing tension will involve consumers, employers, government, and the health care industry over the conflicting goals of constraining costs and allowing access to expensive new technologies ranging from pharmaceuticals to keyhole cardiac surgery. In the short term, all new technology will inflate the cost of care, whereas in the long term the same technology may or may not lower the cost of care. As an example, an expensive pharmaceutical for the prevention of atherosclerosis, like many preventive measures, may be an added cost in the short term but a savings in the long term if one thinks of lifetime costs or population health. Any measure that reduces health care costs is likely to decrease the industry’s investment in research and development of new technologies. The major cause of rising expenditures for health is the introduction of and use of new technologies, but unrestrained this inevitably leads to a rising proportion of the gross domestic product’s going to the provision of health care services. Therefore, the public can demand either cost containment or unrestrained access to costly technology, but not both at the same time. This conflict will not be resolved by the introduction of some version of universal coverage because polls indicate that the political will to push for enabling legislation is lacking. Consequently, it is likely that over time Americans will choose to expend a larger proportion of their resources to obtain the benefits of improved health. Stated in another way, devoting 15% of the gross domestic product to health care, which we do today, is an arbitrary limit on spending: If those who can afford it are asked “Would you be willing to pay a higher proportion of your income for better health obtainable through access to newer technologies?” I believe that the majority would say “yes.”

Insurance

The insurance products of today—HMO, PPO, point of service, fee-for-service—will survive in some form throughout the next decade. The major change will occur in employer-sponsored coverage, which will move steadily toward a defined dollar contribution to the employee rather than a defined benefit of all necessary health care. From the standpoint of employers, a defined contribution, paid directly to the employee to use in purchasing whatever insurance package the employee selects, limits the employer’s financial outlay. The concept is attractive to many employees because of their freedom to choose the most suitable kind of insurance taking into consideration age, health risks, present state of health, and family, if any. In this circumstance, employees will be spending their own dollars and consequently will become more discriminating in their purchasing decisions for health and health care services.

Organization within the Industry

In the past 10 years, mergers, buy-outs, acquisitions, and alliances have characterized reorganization in every sector of the health care industry. The number of national insurers has declined at the same rate as the nation’s large accounting firms, and for similar reasons—complementary strengths, scale economies, reach, and domination of specific markets. There is a reason that when Aetna and HealthNet make major decisions, the impact somewhere in the system is serious. Industries providing goods and services for the delivery of health care—pharmaceutical companies, device manufacturers, suppliers of disposable items, and group purchasing organizations—have merged for the same reasons. Hospitals have merged, joined systems or chains, created alliances or joint ventures, or, if not feeling particularly vulnerable in their geographic market, remained independent. The incentives range from securing a dominant position in a particular small or large region to obtaining access to capital and strategic leadership. Physicians began the process of consolidation by joining groups, either large or small group practices—a trend that began in the late 1980s and has escalated over the past few years. Simply stated, if a group becomes large enough, and especially if the most desired physicians join the group, in a given geographic area, whether a town, a city, a defined sector of a metropolis, or an even larger region, any insurer doing business in that area cannot go around this dominant group. As soon as a prospective purchaser learns that the best physicians, possibly his or her own physician, are not on the plan (and typically a close connection exists between best physicians and the best hospitals where they practice), the group has established a strong position in negotiating conditions, including reimbursement with the insurer. To state that the physician group “owns” this market is legally inaccurate, but in practice it is a reality. Unionization of physicians is another issue that will be played out over the coming decade, and anyone who predicts the outcome is likely to get it wrong.

The New Consumer

We are well into a period dominated by a new breed of consumers who have rewritten the rules of interaction in every major industry except health care, and over the past 3 years they have been forging new contracts with each component of the trillion-dollar industry that deals with their health. Half of the adults in this country qualify as new consumers—having education (at least 1 year of college), a disposable income providing purchasing discretion, and connection with the Internet. The core characteristic of the new consumers is their use of information for empowerment, which foreshadowed the role that the Internet would play in the power shift. This new consumer wants choice, involvement and control in making decisions about their health, diagnostic procedures and treatment, superior service, and information that is individually customized and understandable. They are bringing insurers, medical groups, physicians, and hospitals into the courtroom, and in effect they have dismantled key mechanisms for controlling the cost of health care. The more they know, the more they want the latest and best technology, often a new pharmaceutical or a new operative procedure, whether or not evidence supports its press releases and irrespective of appropriateness.

The impact of new consumers in the health care marketplace is clear. Within 5 years, more than one half of the population will have information on which to base choices about health plans, hospitals, physicians, and specific diagnostic and therapeutic interventions. Entities that understand their needs will win their approval, trust, and loyalty, while the remainder will long for the way things used to be. Consumers will require a new level of open accountability from the health care industry, and this means interacting with patients who know more about you and your practice than you know about them.

Marketing

Rules for marketing (advertising) have become liberal. Any verifiable statement is allowable, but whether conveyed to the public in a brochure or through a Web page, an unsubstantiated claim is subject to fraud and deceit claims. The rules are simple: don’t speculate, don’t exaggerate, and don’t misrepresent the “best outcomes” of another institution or physician as the outcomes that you’ve obtained. Omission of attribution, or misattribution, if challenged, will be difficult to defend.

Today, several informational and marketing media can be used. Published reports in professional periodicals are invaluable, because the media covers significant reports and the public has a never-ending appetite for information about health care. Imagine the dollar value of a breakthrough clinical trial originating from your institution (department, center, or group) that appears in the New England Journal of Medicine. An invited article or expert interview can serve the same purpose. Today, the most used source of information is the Internet. Competing with your peers in this and future markets for cerebrovascular services requires a well-designed and informative personal Web page unless you already have attained celebrity status and can survive on reputation alone.

What Americans Value in Health Care

The public’s major means of education is through the media. Every poll indicates a high level of interest in anything dealing with health, health care, illness, diet, fitness, diseases, and revelations of error, negligence, or cover-up in the industry. You need think back no further than the deluge of publicity generated by the Institute of Medicine’s report on medical errors—even the checkout clerk at your supermarket can quote a number for the resulting deaths and injuries. This story was not the work of a whistle-blower (although they seem to be everywhere), but a scholarly and thoughtful analysis by one of the nation’s most prestigious and respected institutions. Anything that is newsworthy is aired, printed, and broadcast. It is not surprising that the public is abreast of trends, new technologies, and significant medical news originating from a number of professional sources. Today, physicians are not dealing with a naïve and entirely trusting public.

So, what do Americans want? Whatever it is, a diagnostic test or a therapy, they want to know about risks, and I mean all risks. As a rule, they prefer medical to surgical interventions, and a growing number prefer alternative approaches to biomedicine. One of the major movements has been the evolution of minimally invasive surgery (MIS), and I include endovascular surgery as surgery through a catheter. Similarly, radiosurgery is used as a surgical tool and belongs in the MIS category. “Evidence-based” and “outcomes” are becoming familiar terms. A potential patient who fails to inquire about a surgeon’s volume of experience with a recommended procedure is exceptional in the region where I practice.

Whom do Americans trust for information and advice about health decisions? Friends and family members top the list, followed by the patient’s personal physician. “Branded” sources of information—the Mayo Clinic, Johns Hopkins, and the AMA—have credibility, as do certain branches of the government—the NIH, Surgeon General, National Cancer Institute, and Centers for Disease Control and Prevention. There is an overwhelming mass of health information on the Internet, but the public is just as aware as the medical community that much of it is dead wrong or amounts to nothing more than flagrant advertising.

At the risk of overstating its importance, the public’s skepticism, bordering on mistrust, of our current system of health care constitutes a powerful force in the public’s relationship with every component of the industry. The new consumer wants accurate and comprehensive information for making decisions about health-related decisions. For physicians, this means profile and practice transparency. Hospitals will be forced or convinced to open their records on infection rates, mortality by procedure and surgeon, and some metric of medical errors. For insurers and suppliers, a Consumer Guide counterpart will be sufficient. This final movement toward accountability is inevitable and is underway today. To borrow a metaphor from the boxing ring, “We can run, but we can’t hide.”

As a final note, expect to see rapid growth of specialty hospitals, specialty units, and specialists who are more tightly focused on a limited area of their specialty. Americans have shown that they do not want a generalist when it is perfectly obvious to them, rightly or wrongly, that they need a specialist. Even more than any specialist, they want a specialist that knows a lot about their specific problem and has had a lot of experience—and success— treating it. A tour around many larger cities in the United States will uncover a proliferation of specialty units, embedded or freestanding, and this trend will continue throughout the coming decade. The principal reasons for this are the consumer’s desire for specialized treatment by a whole team of specialist physicians, nurses, and ancillary personnel; the superior outcomes achieved by focus and driven by volume; and the observation by investors that “if you build it, they will come.”

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