Peripheral Vascular Care: What is the Emerging Opportunity by Barbara Sallo, RN, MBA

What Are the Costs and Revenue Associated with PVD Care?

If PVD services are provided in existing surgery and interventional radiology suites, no additional capital costs can be expected. The expansion of catheter-based care in the cath lab to include peripheral vascular interventions will give rise to additional expenses. Imaging requirements for the PVD patient may require new equipment purchases but many hospitals have been able to adapt existing coronary cameras. Specialized supplies are also required. Staff education and training must be expanded to include peripheral procedure techniques and potential complications.

Revenue from PVD care provides the opportunity for healthy margins for hospitals. Medicare contribution margins for vascular DRGs compare favorably with cardiac DRG margins. Across all vascular DRGs the average contribution margin (revenue less direct costs) is more than 30 percent (Source: Market Insights, Inc., San Francisco; Cardiovascular Roundtable analysis 1999).

While there are no statistics on the revenue generating figures for interventional radiologists and cardiologists treating PVD, a recent survey provides that information on vascular surgeons. Results from a survey of 1,200 hospital CFOs reveals that vascular surgeons generate an average of $2.2 million in revenue—derived from referrals and associated treatments—for their affiliated hospitals each year.

Where to Go to from Here?

Cardiovascular care is big business. This year alone, the American Heart Association anticipates that $329 billion will be spent on this patient population. While the PVD portion of the total is significantly smaller than the cardiac portion, the patients are the same. Peripheral vascular care is an essential component of full service cardiovascular care.

There is no question that the number of PVD patients is growing and these patients are underserved today. Hospitals must decide how to best care for this population. One of the first steps is compiling a PVD dedicated business plan that covers:

•Market size/opportunity

•Competitive environment/issues

•Scope of service

•Physician specialties/medical coverage

•Clinical operations model

•Marketing and outreach initiatives

•Financial requirements/assumptions

•Structure/governance/ownership

•Conditions for success

•Implementation recommendations and timeline

With the growing trend toward healthcare self-education supported through the press and the Internet, the public is becoming increasingly aware of the potential dangers of untreated vascular disease. Quality of life has taken on new meaning and the older population will continue to seek healthcare resources that will enable them to maintain active lifestyles. Be prepared for the baby boomers to seek out and demand assessment and treatment of peripheral vascular problems.

Barbara Sallo, RN, MBA is the President of Health Care Visions, Ltd. a cardiovascular consulting firm based in Pittsburgh, Pennsylvania. The firm brings extensive knowledge and expertise in this area of clinical care. Health Care Visions, Ltd. has assisted a multitude of hospitals in all phases of cardiovascular programs from market assessments, program assessments and feasibility studies to business planning and implementation.

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BIO:

Barbara Sallo, RN, MBA is the President of Health Care Visions, Ltd. a cardiovascular consulting firm based in Pittsburgh, Pennsylvania. The firm brings extensive knowledge and expertise in this area of clinical care. Health Care Visions, Ltd. has assisted a multitude of hospitals in all phases of cardiovascular programs from market assessments, program assessments and feasibility studies to business planning and implementation.

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