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Please Don’t Shoot the Messenger
By John Latsko  I have been asked to write the last
Perspective editorial of 2005. What have others written
during the year? Each editorial was an excellent presentation on a
very important subject with a common theme. That theme is a need
for more money to cover practice expenses, to pay for the uninsured
and underinsured, to encourage research, education, and lobbying,
and to promote O&P innovation.
At a time when healthcare costs are spiraling out of control,
when the per-capita cost for healthcare in the US is nearly double
what the next highest country expends, when the Medicare-eligible
population will be growing faster than at any time in our history,
is it realistic to think that money will be available to fund the
initiatives suggested, no matter how well-intentioned they are?
The real risk is that Medicare reimbursement will drop to the
levels paid by many insurance carriers in competitive markets.
O&P is a small industry that has relatively few participants,
without economic resources to fund the pursuit of these goals. The
reality is that cost containment is the future. Payers are
implementing pay-for-performance reimbursement and disease
management programs as well as high-deductible health plans to
reward effective use of less costly ways to achieve established,
objectively measurable outcomes. High-deductible plans cause
patients to become more cost-conscious as they become personally
responsible for more of the cost. Innovation in orthotics and
prosthetics is necessary to stretch available resources when the
innovation reduces costs while improving outcomes. Hospitals and
physicians have moved away from inpatient services to ambulatory
services to lower costs. Hospital testing utilization rates have
decreased, as have inpatient lengths of stay. While pharmaceutical
costs have increased, this is because effective use of
pharmaceuticals reduces or eliminates the need for more expensive
hospital services.
Healthcare costs need to stabilize even as our population ages.
Incentivizing the use of less costly prefabricated devices may
cause a quicker-than-anticipated transition away from custom-made
devices. Evidence of measurable outcomes and prevention of future
complications will more likely be forthcoming from those who
promote prefabrication than those who custom-fabricate. While this
is a strong statement, cost-effective innovation is growing faster
in the prefabricated arena because that is what prefabrication is
intended to do--reduce cost.
Be an Effective Competitor
Facilities and practitioners should not count on higher
reimbursement. You need to be an effective competitor as to access,
cost, and measurable quality and outcomes by:
- Providing highly effective patient- and customer-friendly
devices and components;
- Supplying the least costly but necessary device and components
for what the patient or customer needs;
- Significantly reducing your unit labor and component costs
associated with each device;
- Increasing your market share by achieving high marks in
referral source and patient or customer satisfaction surveys;
and
- Recognizing and meeting your competition, large and small,
head-on with innovation in marketing, joint venturing, group
purchasing, alliances, integration activities, cost accounting and
cost containment.
Lobbying for increased reimbursement and grants for research and
education is a wonderful goal, but it is expensive. The O&P
industry historically has not expended, even on relative basis, the
money that the pharmaceutical, medical device, medical, or hospital
industries spend to politically influence funding decisions. While
other Perspective authors in 2005 expressed a desire for
more money, this one does not. Industry survivors will do more with
less, grow market share, meet measurable outcome standards, and
have highly satisfied patients, payers, customers, and referral
sources. There is sufficient money available to support necessary
orthotics and prosthetics in America, and even more for research,
education, and innovation, if fraud and waste are reduced. In my
opinion, the O&P industry would do well to move its hopes away
from higher reimbursement and focus on cost containment,
establishing outcome benchmarks, and implementing information
systems that can reliably measure patient outcomes.
And one final point: There will always be a need for facilities
and practitioners who are outstanding in doing customized orthotics
work. How much will be custom-fabricated will be determined by how
much better patients do using custom-made rather than prefabricated
devices. Available cost and outcome data will drive the direction
of the industry. John Latsko is a partner in the health law practice of Schottenstein, Zox & Dunn, Columbus, Ohio. He can be contacted at 614.462.2329; jlatsko@szd.com 
Table Of Contents - December 2005
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O&P Community Rallies Support for Katrina Victims
In the wake of Hurricane Katrina, many in the O&P field have offered financial assistance, support, and relief to the victims of what has been called the greatest natural disaster the US has ever faced.
Feature
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Prosthetist/Orthotist Rescues Animals from Katrina Disaster
A well-known member of the O&P community, Ronnie Graves, CO, BOCPO, LPO, RTP, heroically assisted in the rescue of hundreds of animals in Mississippi.
Feature
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Pedorthics: Helping People Get Back to Work
Not every pedorthist faces a first-time workers-compensation case like this one!
Stepping Out
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Natural Disasters: Can Your Practice Survive?
Legal EDGE
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Karl Fillauer: Passionate about O&P
Industry Leader
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Hans Richard Lehneis, PhD, CPO, Passes
Industry Insight
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Got FAQs?
Got FAQs?
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Luci Busch, RTP
Profile
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Please Don’t Shoot the Messenger
Perspective
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From the Editor: New Managing Editor Joins The EDGE
Viewpoint
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