AN ACTUARIAL REPORT
ON THE COST EFFECTIVENESS OF A NEW MEDICAL TECHNOLOGY |
(Diapulse)
JOURNAL OF INSURANCE MEDICINE
Volume 23, No. 2 Summer 1991
by
ROBERT W. MAYER, PSA, MAAA
Vice President and Director of Research
Mutual Benefit Life
Kansas City, Missouri |
It would be difficult to overstate the concern
today in the United States regarding health care costs. The
January 1991 issue of the Conference Board I reported on the
results of the Board’s latest Chief Executive Opinion
survey covering nearly 600 top U.S. companies. Asked to rate
the future burden of present problems, the number one concern
of top CEO’s was health care costs.
New medical technology is often cited as a contributing factor
to increasing health care costs. In a 1990 report to the National
Committee for Quality Health Care, 2 the forces driving health
care spending were examined in detail. In a section reviewing
the impact of new medical technology, the report cited an analysis
of American Hospital Association data that concluded half the
increase in real hospital costs derive from new technology.3
In such an environment, a report of a new medical technology
demonstrating cost reduction as well as substantial improvement
in patient care is extremely noteworthy. Such a report has been
published by Itoh et al. (Goldwater Memorial Hospital, New York
City) in the February 1991 issue of Decubitus, The Journal of
Skin Ulcers.4
The medical problem studied was pressure ulcers, a pervasive
health problem, particularly among the elderly in nursing homes
(an ever-increasing number as the population ages) and among
severely, chronically debilitated patients, e.g., spinal cord
injuries.
Pressure ulcers are commonly classified in four stages as follows:
Stage I: Nonresolving reddened area with no
break in skin;
Stage II: Reddened area
with superficial skin break;
Stage III:
Open area extended beyond epidermis to subcutaneous tissue with
or without necrosis;
Stage IV: Deep open
area exposing muscle, fascia, or bone.
Stage IV chronic pressure ulcer can progress to and eventually
cause death.
Estimates (If the extent of the problem vary, but all indicate
pressure ulcers are a significant health care problem and expense.
For hospitalized patients various authors have estimated a prevalence
(If pressure ulcers ranging from 3% to 11 % In their studies,
approximately one quarter of residents admitted to the nursing
home from an acute care hospital 9 and one third admitted to
a chronic care hospital had a pressure ulcer. In an analysis
of 51 nursing homes in 11 states covering all geographic regions
of the country for the years
1984-85, Brandeis et al. reported 11.3% possessed a Stage II
through Stage IV pressure ulcer. Further, for those admitted
to the nursing home without a pressure ulcer, the one year incidence
of developing a pressure ulcer was 13.2’%. This increased
to 21.6% by two years of nursing home stay I
The International Association for Enterostomal therapy (IAET),
a 2,200-member association consisting of ET nurses specializing
in treatment of pressure ulcers, has stated that over 500,000
people in nursing homes are at risk to develop a pressure ulcer
and that almost 60,00(1 people die each year from pressure ulcers.12
It is difficult to calculate the total patient cost attributable
to pressure ulcers. The consensus statement of the National
Pressure Ulcer Advisory Panel estimated a range of $2,000 to
$30,000.5 Some estimates range as high as $86,000 per patient.13
Slow-healing or non-healing ulcers require a prolonged hospital
stay, and the patient may develop complications, including infection
and secondary disability. Morbidity and mortality of this condition
is high. 11 The magnitude of the problem is in the billions
of dollars annually, with the IAFT citing costs as high as $10
billion.
The impact for insurance companies is most significant in two
areas. One is the emerging new insurance product, Long-Term
Care, a coverage that emphasizes nursing home care. The already
overburdened Medicare program is not able to take on nursing
home expenses. Long-Term Care policies have, therefore, been
perceived by a number of legislators as a possible solution
to this growing problem facing the country’s aging population.
The number of bills recently introduced to provide tax-preferred
status for benefits from these policies provides a barometer
for gauging the concern and interest over this issue. 4 The
second area of significance for insurance companies is medical
management of catastrophic claims such as spinal cord injury
and cerebrovascular accidents.
Itoh reported4 on treatment of pressure ulcers with pulsed,
high-frequency, high-peak-power electromagnetic energy (Diapulse).
This therapy has recently been described by the Food and Drug
Administration as a segment of "Emerging Electromagnetic
Medicine."’ Experimental and clinical applications
of this energy are reported in the literature as providing a
safe and effective method of aiding soft tissue healing, 16-20
reduction of edema,21-24 absorption of hematoma,25, 26 reduction
of inflammation,27-29 nerve, 30-34 and spinal cord regeneration,
35-39 and improving peripheral vasculature. 40-42
Based on the literature and a report43 that Diapulse was beneficial
in the treatment of superficial and deep pressure ulcers. which
had failed to heal, the authors undertook the present study
of Stage II and III pressure ulcers which were demonstrably
slow to heal or failed to heal with conventional treatment.
Diapulse technology produces pulsed high-frequency high-peak-power
electromagnetic energy, and operates on an assigned FCC medical
frequency of 27.12 MHz. The energy is delivered in 65 micro-second
bursts at six settings of 80 to 600 pulses per second with a
wattage range from 293 to 975 peak watts in six steps. Energy
is induced through a 9-inch-diameter drum-shaped treatment head,
placed in contact with the area to be treated. Treatment is
completely safe, non-invasive, and can be applied through clothing
and surgical dressings.
Patients with Stage II ulcers unhealed within 3 to 12 weeks
and those with Stage III ulcers unhealed within 8 to 168 weeks
by conventional methods were included in the study. When Diapulse
was added to conventional therapy during the 9-month study,
all 22 ulcers healed. All Stage II ulcers healed in one to six
weeks (mean: 2.33) and all Stage III ulcers healed in one to
22 weeks (mean: 8.85).
The primary diagnosis
of the patients were as follows:
| Primary Diagnosis |
Stage 2 |
Stage 3 |
Total |
| Cerebrovascular Accident |
3 |
4 |
7 |
| Multiple Sclerosis |
3 |
2 |
5 |
| Organic Brain Syndrome |
2 |
2 |
4 |
| Spinal Cord Tumor |
0 |
2 |
2 |
| Diabetes Mellitus |
1 |
2 |
2 |
| Spinal Cord Injury |
0 |
1 |
1 |
| Spinal Stenosis |
0 |
1 |
1 |
| Total |
9 |
13 |
22 |
Individual Results are summarized in the tables below:
Diapulse and Conventional Treatment Conventional Treatment Status
| |
Stage 2 Age |
Duration Weeks |
Ulcer Size (cm2) |
Duration weeks |
Status |
| |
79 |
2 |
3.00 |
4 |
Healed |
| |
56 |
3 |
2.25 |
1 |
Healed |
| |
56 |
3 |
15.00 |
3 |
Healed |
| |
52 |
8 |
1.00 |
1 |
Healed |
| |
77 |
12 |
1.00 |
1 |
Healed |
| |
86 |
12 |
7.50 |
6 |
Healed |
| |
86 |
12 |
7.50 |
3 |
Healed |
| |
60 |
12 |
6.75 |
1 |
Healed |
| |
81 |
9 |
6.00 |
1 |
Healed |
| Mean |
70.33 |
8.22 |
5.56 |
2.23 |
|
| SD |
12.6 |
3.94 |
4.18 |
1.70 |
|
Diapulse and Conventional Treatment Conventional Treatment
Status
| |
Stage 2 Age |
Duration Weeks |
Ulcer Size (cm2) |
Duration Weeks |
Status |
| |
82 |
52 |
.15 |
/ |
Healed |
| |
49 |
168 |
1.00 |
7 |
Healed |
| |
56 |
16 |
.09 |
6 |
Healed |
| |
57 |
10 |
4.50 |
6 |
Healed |
| |
61 |
52 |
.25 |
22 |
Healed |
| |
93 |
14 |
1.00 |
3 |
Healed |
| |
79 |
24 |
17.50 |
8 |
Healed |
| |
79 |
34 |
28.00 |
13 |
Healed |
| |
91 |
12 |
5.60 |
6 |
Healed |
| |
65 |
44 |
40 |
21 |
Healed |
| |
70 |
8 |
1.00 |
7 |
Healed |
| |
72 |
8 |
9.00 |
10 |
Healed |
| |
52 |
8 |
6.00 |
5 |
Healed |
| Mean |
69.7 |
34.62 |
8.78 |
8.85 |
|
| SD |
14.0 |
41.71 |
11.96 |
6.09 |
|
It should be emphasized that patient selection was limited to
chronic ulcers without any sign of healing, or ulcers of short
duration that were deteriorating rapidly with conventional treatment.
Not only was complete healing effected in all cases, but many
cases of long-term standing were healed in a very short time,
e.g., a Stage III ulcer unhealed for 168 weeks healed in 7 weeks
and another Stage III ulcer unhealed for 52 weeks healed in
I week. Many of the Stage II ulcers were healed in I week.
To put these results in perspective, Brandeis et al. reported
on a much more favorable patient group (all admissions to nursing
homes) and still only saw 54.5% of Stage II pressure ulcers
healed in 13 weeks.11
Itoh et al. reported that a thorough review of the literature
produced no evidence of complete healing of Stage II ulcers
in a mean average of 2.33 weeks and Stage III ulcers in a mean
average of 8.85 weeks. They readily attributed their results
to the addition of Diapulse therapy.
What is perhaps most important for the insurance industry, however,
is the cost analysis presented in the Decubitus paper. Indeed,
the authors, fully aware of the health care cost crisis in the
New York City hospital system, appeared to be as excited about
the cost-savings implications of this therapy as they were over
improved patient care.
The cost analysis compared the direct costs of conventional
treatment ($229.53 per week) per ulcer with the cost of conventional
plus Diapulse treatment ($331.03 per week) per ulcer. The authors
noted that Stage II ulcers were on average treated conventionally
for 8.22 weeks x 229.53 per week = $1,886.74.
They then compared the 2.33 weeks (conventional plus Diapulse)
x 331.03 per week = $771.30.
Similarly for Stage III ulcers the comparative cost per ulcer
is: 34.62 weeks x $229.53 per week =
$7,946.33;
8.85 weeks x $331.03
per week = $2,929.62.
The authors totaled up the savings for all 22 ulcers and observed
a savings of $65,217.23 in this small 9-month study with one
Diapulse unit.
Of course, these savings are enormously understated. The ulcers
had not healed when Diapulse therapy was introduced. Thus, the
cost for Diapulse and conventional is accurate, but the cost
for conventional only has an artificial cut off date, i.e.,
the day Diapulse therapy started.
If we were to simply add the mean healing time with Diapulse
and conventional to the conventional cost, assuming that the
ulcers would have healed by that time (an assumption clearly
unwarranted) the savings would increase from $65,217.23 to $96,437.90.
The ulcer population in the Itoh (Goldwater Memorial Hospital)
study is, as pointed out earlier, biased toward non-healing
ulcers. It is instructive to compare the mean healing time with
Diapulse to the natural history of pressure ulcers in general.
The assumption here, that Diapulse plus conventional therapy
will heal a normal pressure ulcer in the same time frame (2.33
weeks, Stage II; 8.85 weeks, Stage III) should be conservative
because these ulcers are by definition more amenable to healing.
The Brandeis paper11 provides the statistics for the following
analysis:
Natural History of Pressure Ulcers
(n = 1,626)
% Healed in T weeks
| |
T = 13 |
T = 26 |
T = 52 |
T = 104 |
Non-Healing |
TOTAL |
| Stage 2 |
54.5 |
19.4 |
12.8 |
10.6 |
2.7 |
100% |
| Stage 3 |
31.5 |
27.5 |
19.9 |
18.7 |
2.5 |
100% |
To calculate an approximation of average healing time by stage,
we can make the reasonably conservative assumption that healing
within each time period occurs at a uniform rate. Thus, the
54.5% of Stage II ulcers that were healed at the end of 13 weeks
are assumed to have healed on average at the midpoint, i.e.,
6.5 weeks. The 19.4% of Stage II ulcers that were not healed
at 13 weeks, but were healed at 26 weeks, are assumed to have
healed on average at the midpoint, 19.5 weeks. A similar calculation
is done for T = 52 and T = 104. For those Stage II ulcers not
healed at 104 weeks (2.7%), we can conservatively use 104 weeks
as the average healing time. The same method is applied for
Stage III ulcers.
Thus, the approximate average healing time by Stage is:
Stage II (6.5 wks x .545) + (19.5 wks x .194) ± (39 wks
x .128) + (78 wks x .106) + (104 wks x .027) = 23.4 wks.
Stage III = (6.5 wks x .315) ± (19.5 wks x .274) + (39
wks x .199) + (78 wks x .187) + (104 wks x .025) = 32.3 wks.
Using the Goldwater costs, the savings by Stage per ulcer would
be:
Stage II = (23.4 wks x $229.53) -(2.33 x $331.03) = $4,600.
Stage III = (32.3 wks x $229.53) - (8.85 wks x $331.03) = $4,484.
If we apply a $4,500 savings per ulcer to the estimated prevalence
of nursing home residents, the annual U.S. savings are approximately
$2.25 billion. These savings do not reflect ancillary savings
that would derive from reduced mortality and morbidity. In the
latter case, more than 50,000 lower extremity amputations are
performed on diabetics each year at an estimated cost of $500
million as a result of chronic non-healing wounds 44.
The Diapulse technology probably falls into what the Health
Insurance Association of America classifies as Under evaluated
Health Care Technology.45 For those insurance companies entering
the Long Term Care marketplace, further evaluation of the cost
savings potential of Diapulse would appear to offer a possible
advantage over the competition. For those companies involved
in managed care of high cost by addition of Diapulse technology
to conventional therapy.
The emergence of electromagnetic medicine may offer cost savings
opportunities in other areas that have been somewhat refractory
to therapeutic approaches devised to date. Widespread industry
review, including investigation and evaluation of this new therapeutic
modality, may prove to be a worthwhile cost containment strategy. |
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Diapulse R is a registered trademark of Diapulse Corporation
of America
and is a proprietary technology. This study received no funding
or grant from any source. |
|
