O&P and Healthcare: Where Are They Heading?
By Miki Fairley "Forecasting the future of healthcare and health policy is
an imperfect science," health experts Robert J. Blendon and
Catherine DesRoches noted in Issues in Science & Technology
Online, Summer 2003. As we peer into the murky mists of healthcare
issues a year later, this may be an understatement.
Blendon, who is a professor of health policy and political
analysis at Harvard University's School of Public Health and John
F. Kennedy School of Government, and DesRoches, who is a senior
research associate at the Harvard School Of Public Health, list
what they regard as the major challenges in US healthcare, which,
of course, affect the orthotics and prosthetics profession as
well:
- Rising healthcare costs: "We predicted in 1986 that healthcare
spending would reach 14 percent of the nation's gross domestic
product [GDP] by 2000. In 2001, it reached 14.1 percent of GDP, and
it is expected to be 17.7 percent by 2012," said Blendon and
DesRoches. They noted, that although managed care did restrain cost
growth for a few years, the performance of individual health plans
suggests that this will not be a major vehicle for future cost
containment. They expect to see both business and government asking
the public to pay more out-of-pocket for health insurance and
care.
- Growing numbers of elderly people: "During the next decade, the
proportion of US citizens who are age 75 or older will grow from 17
million to 19 million," Blendon and DesRoches estimated. Death
rates are steadily decreasing; life expectancy is increasing, they
pointed out. "&reduced state budgets, Medicare trust fund
projections, employer reductions in retiree health benefits, and
slow growth in the private long-term care insurance market suggest
that the nation's older elderly will experience tiering in
healthcare and shortages in some services."
- Lifestyle-related health issues, such as smoking and obesity:
"&we may see businesses and government becoming increasingly
involved in trying to change behaviors, in order to keep healthcare
costs down," said Blendon and DesRoches. One avenue of
accomplishing this might be introducing new insurance products that
provide a carrot-and-stick approach: for instance, discounts for
health club memberships and increased costs for smokers.
However, to Blendon and DesRoches, these are not the overriding
problems. "Based on the experiences of the past decade, the biggest
challenge facing the US healthcare system&is the continued
failure of decision-makers to reach a consensus on how to address
the major healthcare problems facing the country. Several factors
contribute to this failure: declining levels of civic
participation; a high level of public distrust in the federal
government; growing partisanship; a hardening of ideologies; and
highly organized, powerful special-interest groups."
"If this impasse could be broken during the next decade, the
United States could see solutions to many of these problems," they
continued. "Without such action, the trends we report on here are
likely to be the factors that shape the nation's healthcare system
in the next decade and beyond."
The orthotics and prosthetics field is a small but
vital part of the healthcare picture to those who need its
services. What trends do O&P professionals and businessmen
see?
Technology and Research
 O&P is rapidly heading toward computerized
technology both in the areas of digitizing patients' residual limbs
and their alignment, believes Kevin Carroll, CP,
FAAOP, vice president of prosthetics, Hanger Prosthetics
& Orthotics. Carroll foresees more use of central fabrication
and increasing use of computerized alignment equipment. "In the
future, pressure-sensing technologies will predict potential for
skin breakdown before it happens and make adjustments accordingly."
Carroll also believes that in five to ten years almost all orthotic
and prosthetic devices will contain some form of microprocessor
that will detect body movement and receive information directly
from the user.
 "Other than CAD/CAM and some component
advancement, there have not been a tremendous number of
technological advancements in O&P, especially in orthotics,"
said Jim Andreassen, president, OPGA, Waterloo,
Iowa. However, Andreassen sees the Stance Control Orthotic Knee
Joint as a positive move forward. "I have seen them on patients,
and they have literally changed lives. That's very exciting," he
said. "Unfortunately, we will have to wait on reimbursement from
Medicare before they will be widely accepted. I also see
advancements in socket design with the M.A.S.® socket."
 "The continuing improvement in CAD/CAM
technologies, including orthotics, is significant," said
Cathie Griffith, president and CEO of the
PrimeCare Orthotics & Prosthetics Network, Cordova, Tennessee.
"And there's improvement in plastics. People also should keep an
eye on where technology in microprocessor knees is going."
John Latsko, partner in the health law
department of Schottenstein, Zox & Dunn, Columbus, Ohio, feels
that any new technology that emerges must be "affordable and
benefit the masses." He represents healthcare providers, suppliers,
and manufacturers, including clients in the O&P field, in the
areas of billing, compliance, managed care, transactions, and
strategic planning.
Latsko pointed out an analogy with pharmaceutical companies,
which do not spend large sums to develop drugs to treat rare
diseases unless there are incentives to do so. "For better or
worse, they are in the business to make money, and they don't make
money on excellent drugs which benefit only a few people and which
payers don't include in their formularies due to their high
cost.
"The emphasis is on cost-effectiveness, so the new technologies
must be able to show they can reduce costs either directly or
through quality-of-life analysis," he continued. He looks to more
and better central fabrication as a means to cutting labor costs.
"The larger payers are already putting caps on reimbursement for
O&P. Out-of-pocket payments will never make up the
difference."
Regarding research, Latsko said, "The demand for new and
improved devices and rehabilitation programs will grow with the
changing demographics." But he adds this caveat: "Only
cost-effective devices and rehab programs will survive
financially."
Tying in with this, Latsko sees a strong need to produce
research on patient clinical and performance outcome studies.
"There must be empirical evidence to convince a payer that a
70-year-old diabetic needs an expensive device that is much more
suited for a 25-year-old physically fit amputee.
"Research needs to focus on proving objectively the benefits of
the devices supplied in relation to the cost of the device," Latsko
continued. "Otherwise payers will continue to limit the O&P
benefit offered to the patient, which ultimately, if it has not
already, will carry over to government programs. This is what
happened to the Medicare physical therapy rehabilitation benefit
and the reimbursement levels for DME. Abuse of the benefit resulted
in an almost arbitrary rationing of the service."
Griffith too sees the need for research to
prove positive outcomes of O&P patient care. "It has been a
buzz, and we received quite a few comments at this year's PrimeFare
Annual Seminar, for the need to demonstrate provable positive
outcomes. It's one of the biggest challenges we have. I think it's
do-able in terms of putting together research criteria," she
continued. Some of the difficulty lies in simply getting the time
to document outcomes on video and in documents--"some format in
which we can show consistent, provable outcomes," she said.
"Ultimately, it's a means of proving medical necessity."
Carroll sees a positive role for research in
the future: "With our younger clinicians of today coming directly
out of the Internet age, and with their inquisitive minds, this
population of individuals will not only drive research, but also
demand it. This group will bring the O&P field to a level
beyond comprehension."
 Randy Schmitke, CPA, MBA, CFO,
O&P Digital Technologies, Gainesville, Florida, takes a
pragmatic view. "Research efforts and initiatives will be directed
at methods of reducing the cost of componentry and reducing the
cost of providing services. The general principles of business will
drive this movement. What the market is willing to pay and what the
customer wants will drive what providers supply and what
manufacturers produce." With the continuous decline and shifting of
payment amounts and structures, Schmitke feels that the overall
cost of providing O&P services will be forced to go down in
order to maintain profitability.
Along with helping to establish provable outcomes,
Griffith too sees research as needing to discover
ways to provide better quality products and services with optimal
personnel involvement, she pointed out.
 Paul Prusakowski, CPO, FAAOP,
president of O&P Digital Technologies, looks to computer
technology to increase productivity and cost efficiency. "In order
to be competitive in today's marketplace, a practitioner must be
incredibly efficient," he pointed out. "Computer technology can
bring the ultimate level of efficiency as to how a practice is run.
I am talking about a lot more than just using CAD/CAM or using a
good billing software. I'm talking about reengineering the entire
foundation of how a practice is run. We can't survive running a
practice the same way as we did in the past. There is a higher
expectancy and need for immediate access to information in both
clinical management and business management."
Intelligent systems to help practitioners become more
competitive are being developed, Prusakowski said. "The newest
generation of practitioners who have been practically raised with
computers and the Internet are going to be the main catalysts for
change in this field. This new generation of practitioners will
enter the field and transform our current practices into the
computer-centric practices that will be the norm within this
decade."
Mergers and Acquisitions
Mergers and acquisitions are expected to continue. "Because of
declining reimbursements, I see many of the suppliers continuing to
merge and/or acquire each other," said Andreassen.
"We will probably end up with two or three super' suppliers that
will control the market."
Griffith sees the merger/acquisition trend as
continuing, but with some change: "Quite a few spin-offs have
resulted from big mergers and acquisitions. The larger
manufacturers are going to be looking at what's being developed by
the smaller, more maneuverable companies, and considering what they
can duplicate, improve on, or acquire."
Schmitke likewise thinks there will be more
mergers and acquisitions among manufacturers and suppliers, as well
as patient care facilities. He sees this is a logical business
evolution. "Manufacturers and suppliers will search for ways to
drive profits and, without a significantly expanding market, this
will lead to adding products, tapping other niches, and attempting
to reduce costs and increase efficiencies."
There also has been a shift in the last five years to the number
of business-educated management personnel involved in O&P,
which in itself will change some of the dynamics of the industry,
Schmitke added.
"Mergers and acquisitions are most definitely going to continue
to be a part of our future," said Carroll. "There
will always be smaller players out there, and many times this group
brings new and bright ideas into our field. It is this group that
will be the future for acquisitions."
Latsko too sees mergers and acquisitions as a
continuing wave of the future. "The O&P industry is different
than most others in healthcare delivery because of the way the
provider market is divided," he pointed out. Hanger has about
one-quarter to one-third of the market; the strictly O&P
providers have about the same; and the rest is divided among others
who supply orthoses as just a part of their business, such as
pharmacies, physicians, hospitals, therapists, and DME providers,
he noted.
Analyzing the continuing trend toward mergers and acquisitions,
he said, "As cost-cutting to deal with lower reimbursement starts
to significantly impact manufacturers just as it has providers,
cost-cutting at that level will be necessary. Group purchasing
associations will begin to achieve very significant savings through
volume discounts."
A point will be reached at which the only cost-cutting
opportunities left will be in management, administration, and
distribution, Latsko pointed out. "The best ways to eliminate some
of those costs is through merger and acquisition," he continued,
noting the consolidation in healthcare over the last decade, even
in O&P.
What does the future hold for reimbursement? Not
surprisingly, at this point, O&P professionals and businessmen
paint a gloomy picture of reimbursement trends.
"I think we will continue to see a downward spiral in
reimbursement levels for the short term," said
Andreassen. "Unfortunately, during that time, many
of the independent O&P facilities will be hit hard and struggle
to make ends meet." However, Andreassen sees a sunnier picture
ahead: "Eventually, I believe reimbursement levels will come back
to an acceptable level, or at the very worst, level off."
Again, Schmitke takes a business approach to
the question of reimbursements. "Does it seem logical for someone
who has been able to reduce the price of something from $10 to $7
to now want to pay anything more than $7? Or does it seem more
logical that they would now want to pay something less than $7? Or,
maybe they will want more for their $7."
Schmitke noted the effects of supply-and-demand principles and
quality issues, which are affected by government regulations: "I'm
not diminishing the potential influence of these variables, but I
do believe that economics will be the overriding influence. In
general, I feel that reimbursements will not get better."
Schmitke sees change as a large factor in the equation for the
future. "Clearly, the other element that is going to happen is
change. A system that is not able to sustain itself will likely not
remain the same. I believe there likely will be more government
regulation because I believe that other clinical professionals are
attempting to expand their revenue bases. This tension will create
the need for rulemaking. The O&P industry will need to continue
to work hard to delineate and differentiate the value that it
brings to the healthcare service arena and in the end, to the
consumer."
Griffith sees little relief in reimbursement
from big managed care organizations (MCOs) and other large payers.
However, she sees a bright spot: "We are seeing a lot more regional
and local contracts coming in. The payers we are negotiating with
have more interest and involvement in the community. We have been
tracking this emerging local and regional trend for about a year
now."
Carroll sees reimbursement in the future as
being different, rather than more or less. The change will be in
accountability: "We will be forced into providing outcomes studies
and justification for the procedures that we wish to carry out.
This will promote the need for more research and a greater
scientific approach."
Although healthcare costs will continue to escalate,
Latsko doesn't see increased dollars going to
DMEPOS. "Most of the reimbursement dollars will go to hospitals and
physicians because there are more voters working in hospitals and
physician offices, and they have huge lobbying power through the
AHA [American Hospital Association] and the AMA [American Medical
Association].
"This will drive innovative cost-effective technologies in
O&P and reduce high-cost labor," Latsko said. He noted that
many American industries already have moved much of their
manufacturing to other countries with lower labor costs. He sees
this same trend happening in O&P. "Many orthoses are already
being manufactured in Latin America. China will be a major player
in supplying orthoses very soon, in my opinion," he continued.
"There will always be a need to have talented people measure,
fabricate, and fit unique orthoses and most prostheses," Latsko
said. However, more productivity must be achieved from each
practitioner, he pointed out, which means they must work smarter
and have the technology available for greater productivity.
In an effort to lower costs, some owners are working harder--but
not necessarily smarter--themselves to reduce labor costs and keep
the facility profitable, Latsko noted. "That cannot continue
indefinitely, especially when margins shrink lower and lower."
The real drivers of the delivery system, though, are employers,
taxpayers, and patients, Latsko pointed out.
"These three groups continue to show growing dissatisfaction at
the cost and availability of care and treatment. Patients are
picking up more and more of the cost of their care through co-pays,
deductibles, and share of premiums.
"While service is such an important part of healthcare delivery,
with O&P, it is the device--that does what it is supposed to do
without discomfort at a reasonable price--that is being purchased,"
Latsko said.
He pointed out that patients are getting more savvy. "Patients
are getting smarter about their healthcare as they pick up more of
its costs. Shopping' through the Internet for healthcare, using
objective statistical data, and, more importantly, price, will be
the norm in the future."
Latsko sums up: "The visionary and creative in O&P will
survive."
Bright Future Seen for Pedorthics
"We're not anywhere close to saturating the need for
pedorthists," said Alan Darby, CPed, LPed, Resource O&P, St.
Louis, Missouri, president of the Pedorthic Footwear Association
(PFA). "While changes in the Therapeutic Shoe Bill have affected
the profession, basically the zooming rate of diabetes in the
population has driven the need for more pedorthic care."
Pedorthists are especially suited to treat diabetic and other
foot problems, using the Medicare codes that relate to this type of
patient care, Darby noted. "Orthotists can also do this, but often
their time is better spent on work relating to other codes," he
added.
Research in foot and ankle disorders is increasing and is being
carried on by several different specialties, Darby said. He is
contributing to a research project being conducted at Washington
University, St. Louis. The principal investigator for that project
is Michael Mueller, PT, PhD.
The Board for Certification in Pedorthics (BCP) is helping to
prepare for the future of the profession. The BCP is undertaking an
initiative to enhance the educational and/or experience
requirements for becoming a certified pedorthist (CPed), according
to The C.Ped.News, published by BCP. "&BCP is meeting
the demands of the medical community for a more highly trained and
educated professional pedorthist," stated the article by Ernesto
Castro, CPed, chair of BCP's Pre-Certification Committee. "In
addition, we are addressing the need for additional staff resources
that are properly trained and supervised in pedorthics," the
article continued.
The plan calls for a curriculum to be developed and instituted
by 2006 that will provide three levels of credentials for
pedorthists. By 2010, the requirements to become a certified
pedorthist are slated to require an associate degree in pedorthics
before taking the CPed exam or an associate degree with documented
pedorthic work experience. Other allied health professionals will
be able to opt out of additional education requirements, but will
still be required to complete the pedorthic training and provide
documented pedorthic work experience, according to the article.
For more information, visit the BCP website: www.cpeds.org; and
the PFA website: www.pedorthics.org 
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