It’s not just the advocacy radiology societies that seek to inform health care policy regarding the industry. The vendors have a stake in health care and imaging legislation, too.
Here, Diagnostic Imaging spoke with David Fisher, head of global policy and government affairs, Siemens Healthcare, to find out about the vendor’s perspective on health care legislation.
Tell us about your background and involvement in health care legislation.
The government affairs and policy team at Siemens Healthcare is responsible for government affairs and advocacy as well as understanding how the actions that congress or regulators take impact our customers, impact the market, and therefore impact us. So we really have two big categories of work, the first is to understand what is going on and how it impacts us and that includes being aware of what is happening in Washington, DC and other places and analyzing that information and understanding its impact.
Secondly, we are responsible for advocating on behalf of the company, so taking that information that we’ve figured out and then advocating on behalf of the company to policymakers, but also internally helping our business, whether it’s our leaders or our sales team, helping them understand how the policy issues are going to impact the job that they do.
What is an example of a policy change that vendors would advocate for?
The medical device tax suspension or repeal is a good one; that one is relatively straightforward to calculate in terms of impact. It has a direct impact on our company. We have been working as an industry over the course of the last 3-4 years to educate policymakers on the impact of that law on our business and arguing that it should be suspended or repealed.
Another example is standard development (XR-29), our company participated with an industry organization called MITA where they developed a standard for radiation dose optimization for CT equipment, and we took that standard and educated policymakers about it both in Congress as well as CMS. We helped them understand why dose optimization is important, and that led to a differential payment policy, so a payment based on compliance with that standard. Beginning Jan. 1, procedures done on equipment that doesn’t meet that standard are reimbursed 5% less than they would be otherwise.
What about industry concerns that vendors might be pushing legislation, like XR-29, in order to promote more advanced equipment or updated software?
Sure, we’ve heard that. I think that if you look at the install base and you look at the fairly basic nature of the standard, I think you’ll see that it’s not really the case. The standard includes very basic dose optimization technologies that are prevalent in the marketplace so I understand people thinking that but that’s not the way we designed the standard.
When it comes to health policy and imaging, radiologists seem to feel like they are more targeted than other specialties, what are your thoughts on this?
I think it’s easy to get that perspective based on the last several years, really since 2006. There have been numerous reimbursement reductions, both legislative as well as regulatory over the last 9-10 years, which have had an impact on radiology. I think that the fee-for-service mentality is important, but we also need to broaden our scope to include value-based care now, and that is a very different environment and one that I think is important for manufacturers like us, as well as radiologists, to begin thinking more about.
What are the big health care reform changes we can expect to see in 2016 and in the next 5 years?
I think value-based care will continue to evolve. We are in a period of transition right now where a relatively small amount of health care payment is based on advanced methodologies of value-based care, so fee-for-service is still the primary method of reimbursement. Over the course of the next 5 years, I think that transition will continue and I think it’s unclear whether it will accelerate but I expect to see that continue over the next 5 years.
I think another issue that is both in the news today but also will be important over the next 5 years is how regulators treat the ongoing consolidation of the marketplace. I think we are going to find there has been a tremendous trend towards consolidation, both horizontal, so hospitals purchasing hospitals for example, or provider networks expanding, but also vertical, so hospitals purchasing or merging with physician office groups or imaging centers. But what we don’t know or what we really need to understand better is how regulators are going to treat that type of consolidation as we move further into that direction.
There have been some pretty strong signals that regulators are concerned about aggregation of market power in this space and so that’s something to keep an eye on.
I think the last thing I would mention is when we talk about payment in health care, we tend to think about ‘what is CMS paying/reimbursing for a procedure' or 'what is an insurance company reimbursing for a procedure?’ But I think over the next year and even longer, we are going to see a stronger focus on price and cost, what is the actual cost to the provider to perform a procedure, and how much does that procedure cost to the patient or insurance company? So this price/cost versus reimbursement, I think, is an important element in the marketplace that is still a bit murky, but will continue to become clearer over time.