(AP)--Academic medical centers in Boston and other cities, which for years have enjoyed large profits from their cardiology programs, are bracing for a new heart disease treatment that could be vastly better for patients but a serious strain for hospital finances. By April, Johnson & Johnson expects the Food and Drug Administration to approve a new type of stainless steel stent for propping open plugged arteries. Doctors believe the device will be such an advance over current treatment that thousands of patients will opt for the new stent instead of cardiac bypass surgery or artery-opening procedures using older stents -- both of which generate large profits for hospitals.
The new stents, which are threaded into the artery with a catheter and then expanded, are coated with a drug that helps prevent scarring that can reclog arteries -- one of the most intractable problems with angioplasty. They are expected to prevent repeat procedures for about 130,000 Americans a year.
"This is a major big deal in the quality of life for patients. They're not going to have to come in and have a second procedure," said Ann Prestipino, senior vice president of surgical and anesthesia services at the Massachusetts General Hospital cardiac program. "But it's a big hit for cardiac surgery, which is the economic engine of these institutions."
Dr. Joseph Carrozza, chief of interventional cardiology at Beth Israel Deaconess Medical Center, said the new stents will not only prevent additional procedures but "will have a big impact on how many people go to surgery and how many need medicine. It will alter the entire landscape of how we treat people with coronary artery disease," said Carrozza, who occasionally speaks about the stents for Johnson & Johnson.
At the same time, he said, the hospitals that treat these patients are bracing for a plunge in profits that many can ill afford. Executives at many hospital systems, such as Partners HealthCare, which includes Mass. General, are compiling detailed projections of the damage, probably a 15 to 20 percent drop in cardiac bypass surgery patients over the next five years. And doctors across the country are talking about rationing the new stents to save money, although physicians at teaching hospitals in Boston said they have no plans to limit their use unless patients don't qualify medically.
"I'd hate to see financial pressures prompt people to provide inappropriate care," said Dr. Richard Shemin, chief of cardiothoracic surgery at Boston Medical Center. "This is potentially a major concern because profitability in cardiovascular care produces a revenue stream that takes care of other aspects of our mission that are not as profitable."
For three decades, open heart surgery has been the most profitable service at many hospitals. Medicare and private insurers pay the average US hospital $26,000 per coronary artery bypass case, of which more than 40 percent is profit, according to a recent analysis by the Cardiovascular Roundtable, an industry group. Payments to academic medical centers are much higher, in the $30,000 to $40,000 range, but so are their expenses.
Forty percent is an unusually high margin for a nonprofit hospital service and many institutions have come to rely on the extra revenue to pay
for money-losing programs like psychiatry and care for the uninsured and to supplement teaching and research budgets. Hospital executives say cardiac bypass surgery still will be profitable, just not as profitable. And cardiac surgery cases already were declining -- from 19,025 in 1997 to 18,378 in 2001 in Massachusetts -- as cardiologists began to use older, bare metal stents on patients in 1994. Now, 850,000 Americans receive stents each year. The newer stents will just accelerate the trend.
Mass. General and Brigham and Women's Hospital, also part of Partners, are expecting a drop of several million dollars annually in cardiac bypass surgery profits at each institution, while Beth Israel Deaconess believes the Cardiovascular Roundtable estimate of a $7 million loss in profits over three years is accurate.
In Massachusetts, cardiac surgery programs at teaching hospitals are taking an additional hit. The state Department of Public Health allowed three community hospitals last year to begin offering open heart surgery. Two programs -- at Cape Cod Hospital in Hyannis and Charlton Memorial Hospital in Fall River -- already have opened and completed nearly 200 operations.
On top of that, hospitals everywhere are expecting to pay much more for the new stents themselves. Bare metal stents cost between $900 and $1,200 but health care analysts expect Johnson & Johnson to charge $3,200 for the new drug-coated stents.
Over the summer, the federal Medicare program, after a lobbying campaign by Johnson & Johnson, took the rare step of approving reimbursement for the new stent, called Cypher, before it was approved by the FDA. But Medicare's payment, which will add about an extra $2,000 for procedures with the new stents, will not cover the entire cost since each procedure is estimated to use on average 11/2 drug-coated stents.
The price of the stents is likely to fall when competitors put similar products on the market. And health care economist Paul Ginsburg said that even though hospitals may suffer financially, the health care system overall is likely to benefit. Even though the new stents are more expensive, Medicare and insurers probably will end up saving money because they'll be paying for fewer bypass operations and second procedures for patients whose arteries have reclogged.
"Sometimes technology reduces the need for services rather than creates a need for more services," said Ginsburg, president of the Center for Studying Health System Change, a nonpartisan research organization in Washington, D.C. "That is not the norm, but it looks like that's what is going to happen here.
For patients, the new stent promises major benefits. Already, they are calling Carrozza at Beth Israel Deaconess weekly to inquire about whether the drug-coated stents are available. This month, he sent two wealthy patients who could afford to pay for the procedure themselves to Europe, where the stents already are on the market.
Beth Israel Deaconess participated in national clinical trials two years ago that enrolled 1,058 patients, half of whom received the drug-coated stent and half of whom got a bare-metal stent. After nine months, about 4 percent of patients with the new stents needed a second procedure, compared with 17 percent with conventional stents.
Dr. Ravin Davidoff, director of clinical cardiology at Boston Medical Center, warned that the study did not follow patients for very long, so it's unclear whether the reclogging of the patients' arteries was prevented or merely postponed. "Time will tell if the effect is being delayed or if this really is a magic bullet," he said.
Meanwhile, patients are hopeful. Men and women who took part in the trial do not know which stent they received; that information is sealed for five years, so doctors can follow the two groups without bias. But Henry Lebel Jr., of Webster, is convinced he received a drug-coated stent when he joined the trial at Beth Israel Deaconess in June 2001.
Lebel, 53, had found it difficult to breath when he walked from his office at the food service company Epicurean Feast to his car in the parking lot. Doctors inserted two eight-millimeter-long stents in two branches of a major artery. A year ago, he returned to the hospital for a checkup and both arteries were fully open with no reclogging. "They looked great, everything was OK and I feel wonderful," he said.
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