The Cost of Outpatient Wound Care

David Walker is President and CEO of Intellicure, Inc.

Our country’s healthcare is the most expensive in the world. While recent news reports have focused on efforts in Washington to make healthcare coverage universal, health-care reform is also aimed at bringing costs under control. Medical costs now consume more than one of every six dollars we earn. “The greatest threat to America’s fiscal health is not Social Security,” President Barack Obama said in a March speech at the White House. “By a wide margin, the biggest threat to our nation’s balance sheet is the skyrocketing cost of health care.”
A recent article in The New Yorker by Atul Gawande encapsulates the challenges we face in trying to control health care costs. It is entitled “The Cost Conundrum, what a Texas town can teach us about healthcare.” (
In 2006, Medicare spent fifteen thousand dollars per enrollee in McAllen, Texas, almost twice the national average. However, the income per capita is only twelve thousand dollars. In other words, in McAllen, Texas, Medicare spends three thousand dollars more per person than the average person earns. The article discusses the balance between meeting patient needs and having a medical practice, which is primarily seen as a “revenue stream.”
Wound centers are also faced with this challenge. They are businesses, which have to be financially successful. However, increasingly, wound care experts are being asked to understand and control the costs associated with wound healing. We are asked to determine which products and interventions work best and in what combinations. These are fundamentally questions about cost benefit and comparative effectiveness. And there is a national focus on these issues. The $787 billion economic stimulus bill approved by Congress will, for the first time, provide substantial amounts of money for the federal government to compare the effectiveness of different treatments. But if you had to answer a relatively simple question such as, “how much does it cost to get a venous leg ulcer healed in your clinic?” could you answer it? Without an understanding of “total cost,” you can’t decide whether a relatively expensive product saves money or costs money, or whether it is worth it to provide a service for which your reimbursement is low but the results seem to be good. We will first begin by understanding “total cost” (no matter who pays or who gets paid).
This article aims to enumerate the sources of “cost to the system” for a patient seen in an outpatient wound care center: facility charges, physician charges, labs, dressings, home health, pharmacy, and other related durable medical equipment charges.

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