Let's Be Frank: Integrating Advanced Therapy Products into Your Wound Clinic Business Model

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Issue Number: 
Volume 12 Issue 7 - July 2018
Author(s): 
Frank Aviles Jr., PT, CWS, FACCWS, CLT

Regenerative medicine is just one example of the many advanced modalities available to today’s product formularies. But how do we go about making sure our clinical and business decisions remain on profitable parallel paths?

For the majority of professionals who choose to enter healthcare, the intention is to serve others. Whether we want to treat an illness, help patients take their first steps, or care for those living with chronic wounds, we all tend to share the same agenda and passion for helping people to be healthy. But, as the often-cited phrase goes, “Healing is an art, medicine is a profession, but healthcare is a business.” Unfortunately, when it comes to the wound care arena, some people fail to realize that working in an outpatient clinic is like working in any other type of business: In order for us to continue to treat patients clinically, we have to keep our businesses profitable. Revenue must exceed costs associated with taking good care of our patients. If at any time the wound clinic’s program director loses his or her business perspective, that business will eventually plummet beyond salvageable depths. Business failure is generally defined as a company’s operations being ceased due to an inability to generate sufficient revenue to cover expenses and create profits. This measuring stick is no different for program directors who are managing wound care clinics. 

I have seen many clinicians promoted to directors of outpatient centers because they do such a great job clinically and, for the most part, are considered to be experts in the field. However, the responsibilities of overseeing the operational and financial aspects of a clinic are often not as appealing as it may seem from the clinician’s perspective, assuming that managing the clinic’s inventory, overhead, budget, and product formulary is not part of that job description. There is literature available today that indicates the global wound care and wound management market will continue to expand into the billions by the middle of the next decade. These numbers are largely driven by advanced therapies — of which many options are available already. This article will discuss how program directors can consider adding advanced products to their formularies and how to appropriately weigh clinical and business considerations.

FORMULARY FOUNDATIONS

Nearly 20 years ago, Jan Cuzzell, RN, MA, CNS, vice president of the THA Group, a home care management company based in Savannah, GA, was quoted as saying, “wound care is time- and labor-intensive, and the financial success of a center depends on numerous factors, such as the mix of payers, the patient population, the availability of appropriate clinicians, and the ability to contain costs while maintaining high-quality care.”1 This still holds true, and we as clinicians typically like to define the maintaining of quality care through the development of algorithms based on evidence-based guidelines and subsequent product formularies. Doing what’s right for patients at the right time and at the right level of care allows us to select appropriate products from said formularies. Applying these products effectively helps to decrease the length of time a wound is open, the length of stay needed in a clinic, and the risk of re-hospitalization. Reviewing and selecting a product formulary that works for one’s clinic is recommended.

Over the years, I have learned that the most cost-effective products may not always be the best choices, especially if they don’t perform as well as the competition. Yes, we do need to be mindful of profits to keep our businesses open, but selecting less expensive products and improperly using dressings by not matching the product with the wound’s characteristics and/or not following the manufacturer’s recommendations will not help anyone get their money’s worth. Remember that the business remaining profitable and the patients having exposure to the best product for their wounds should coincide. When establishing the formulary, it is recommended to select products based on clinical results and desired outcomes.  If the product is reimbursed, clinics also have additional choices to make. (The intent of this article is not to discuss reimbursement in particular, as it is beyond the scope.) Without a doubt, the rules for reimbursement constantly change, making product selection quite challenging. Program directors must consider payers’ reimbursement. Program directors must also be vigilant and utilize real-time data to dissect, tract, and interpret clinic performance, including financial metrics. One area that can quickly sink any clinic, if it is not properly managed, is the selection of products and formulary utilization. The options of available products are immense. Often, poor understanding of how and/or when to use a product or dressing is going to be the culprit to driving poor cost utilization. Reimbursement will vary by region and require supportive documentation. By reviewing one’s formulary annually, appropriate product selection and utilization can be achieved and set a standard for staff to make appropriate decisions that have financial implications for the business that go beyond clinical best practices. Surely, product selection should be based on clinical efficacy, desired outcome, and reimbursement/coverage. Not following specific payer guidelines and/or having poor documentation will affect reimbursement, which will negatively impact the clinic’s bottom line.  

CELLULAR & OTHER ADVANCED PRODUCT DESCRIPTIONS

Today, doing what’s right for patients often calls into consideration the opportunity to apply cellular and/or tissue-based products (CTPs). I am grateful to be practicing wound care in a time of such advanced modalities being available in our centers. But do we always use them appropriately? Are they always being selected based on efficacy? The last time I checked, I found more than 80 various products categorized as “cellular/tissue” or “bioengineered skin substitutes.” These products possess various functions and are derived from various sources, which can make it difficult to compare them side by side. They typically fall within one of five classifications: 

  • cultured epithelial autografts;
  • human skin allografts derived from donated human cadaver tissue;
  • allogenic matrices derived from human neonatal fibroblasts;
  • composite matrices derived from human keratinocytes, fibroblasts, and bovine or porcine collagen; and
  • acellular matrices derived from porcine or bovine collagen.

Some products may also possess unique regenerative properties. Regardless of which product is being used, it will only work appropriately when the basic tenants of wound care are addressed and if utilized at the right time for the right reason. The Centers for Medicare & Medicaid Services (CMS) essentially refers to CTPs as bioengineered skin substitutes. Here are some descriptors: 

  • Human skin allografts are bioengineered from human skin components and human tissue that has had intact cells removed or treated to avoid immunologic rejection. They are available in different forms and are promoted to allow scaffolding, soft tissue filling, growth factors, and other bioavailable hormonal or enzymatic activity. 
  • Allogeneic matrices are usually derived from human neonatal fibroblasts of the foreskin that may contain metabolically active or regenerative components primarily used for soft tissue support, although some have been approved for the treatment of full-thickness skin and soft tissue loss. Most are biodegradable and disappear 3-4 weeks after implantation.
  • Composite matrices are derived from human keratinocytes and fibroblasts supported by a scaffold of synthetic mesh or xenogeneic collagen. These are also referred to as human skin equivalent but are unable to be used as autografts due to immunologic rejection or degradation of the living components by the host. Active cellular components continue to generate bioactive compounds and proteins that may accelerate wound healing and epithelial regrowth. 
  • Acellular matrices are derived from other human skin and include the majority of bioengineered skin substitutes. All are composed of allogeneic- or xenogeneic-derived collagen, membrane, or cellular remnants proposed to simulate or exaggerate the characteristics of human skin. All propose to promote healing by the creation of localized intensification of an array of hormonal and enzymatic activity to accelerate closure by migration of native dermal and epithelial components rather than function as distinctly incorporated tissue closing the skin defect. 

FORMULARY SELECTION

I often ask my clinician peers how they go about selecting these types of products, and their responses vary. When we opened our clinic in Natchitoches, LA, we generally did not “open the skin substitute gate” until basic wound care was consistently met, including determining the underlying cause, assessing/establishing adequate vascular status, making sure infection was not a factor, preparing the wound bed by proper debridement/exudate control/bacterial balance, progressing the wound from the inflammatory phase, nutrition/glycemic control, proper offloading, and targeting biomechanical problems.2 Once basic tenants were met, these products were slowly introduced based on clinical efficacy, and selection was based on specific patient needs. A word of caution: program directors must do their due diligence in learning about payer guidelines and reimbursement notes when any products are being considered. Even with documented evidence, our hands may be tied down when it comes to product selection. We can recommend products with proven results, but if insurance will not cover them patients may be reluctant to their use. At times, this makes me curious to consider what it might be like if we developed algorithms based on specific payers. When insurance covers a specific product, clinics must pay attention and follow specific guidelines. 

Product or dressing selection should be based on the patient’s wound needs while addressing the underlying cause. Wound assessment and documentation are important in determining which products to complement with treatment interventions. Selecting an improper dressing will drive up costs per patient and prolong wound repair. The ultimate goal in dressing selection is to utilize a moist wound healing concept as the wound is progressing through the phases of healing (after addressing inadequate arterial circulation and the presence of critical colonization or infection). It has been proven that wound measurements decrease when the wound bed has the “right” environment. It is recommended that clinicians review the product formulary and designate products in dressing categories to determine if the right combination is being offered. The dressing categories include: gauze, transparent film, hydrogel, foam, hydrocolloids, alginates, hydrofibers, antimicrobials, antiseptics, nonadherent contact layers, collagen, composite, honey, negative pressure, and CTPs, among others.

SUMMARY

Wound care practice continues to change at a rapid pace. As technology evolves, having an understanding of how to appropriately select advanced products based on efficacy and payer approval will help us heal patients’ wounds and give our clinics a chance to be financially viable. This theory only works, however, when wound care basics are followed and with acknowledgement that these advanced products can positively or negatively impact the clinic as seen through the business lens. Business failure occurs when clinics do not operate from a standpoint of jointly operational and clinical decision-making while marrying these concepts with patients’ needs. 

Frank Aviles Jr. is wound care service line director at Natchitoches Regional Medical Center; wound care and lymphedema instructor at the Academy of Lymphatic Studies, Sebastian, FL; physical therapy (PT)/wound care consultant at Louisiana Extended Care Hospital, Natchitoches; and PT/wound care consultant at Cane River Therapy Services LLC, Natchitoches.

References 

1. Opening a wound care center? do your homework or go down in flames. Relias. 1998. Accessed online: www.ahcmedia.com/articles/39775-opening-a-wound-care-center-do-your-home...

2. Hilario H, Aviles F. Recognizing & correcting biomechanical problems of the foot. TWC. 2018;12(6):22-8.