Organ donation and transplantation activity is a growing industry in this country. The Health Resources and Services Administration in its latest statistics reports that donation and transplantation rates went up from 28,112 organ transplant operations in 2005 to 28,923 in 2006. Some programs are seeking to accommodate that growth: Last year, the Clarian Transplant Center, Indianapolis, performed the first simultaneous lung and pancreas transplant in the nation. And other centers have been bulking up their services or merging to expand their programs.
And last week, Lutheran Hospital of Indiana, a 366-bed facility in Fort Wayne, got approval from national organ procurement organizations to perform kidney transplants, making it the second renal transplant program in the state. The hospital has operated a heart transplant program for more than two decades.
And, the University of Kansas Hospital, Kansas City, and the Kansas City Cancer Center, a clinic, are in the process of combining their blood and marrow transplant programs, an expansion that will cost in excess of $3.5 million, including capital, equipment and staff. The investment, however, will be worth it, said Bob Page, incoming president and CEO of the hospital. The merger will double the number of staffed beds, and expand the number of blood and marrow transplants from 60 this year to more than 100 in future years, Page said.
Organ transplants can be a cash cow for hospitals, but just how lucrative an organ transplant program is can really depend on the individual program, said Jeff Sinaiko, president of Sinaiko Healthcare Consulting, Los Angeles. It comes down to the facilitys volume and costs, the contracts, payer mix and how well the program and different reimbursements are managed, because how they get reimbursed under Medicare is very complicated, he said.
Reimbursement also varies widely depending on the organ, Sinaiko said. Kidney transplants for example have a lower reimbursement but are done in much higher volume. Citing CMS statistics, Sinaiko said the national DRG rate under Medicare for kidney transplants is about $14,000 per transplant, $42,000 per liver transplant and more than $80,000 for a heart transplant.
The University of Californias Foster presented a slightly different perspective. Less than 5% of all hospitals in the U.S. have transplant programs, and many hospitals over the years have stopped performing transplants, he added. For these reasons, he suspects that many small and moderate-sized transplant programs operate in the red, which in his view means the center is conducting fewer than 100 kidney transplants per year.
As of April, the CMS reported there were 505 transplant centers participating in Medicare (See chart, p. 16). Medicare reimburses 100% of the costs for the transplant itself so it is a break-even, said Linda McClung, a spokeswoman for Christus Health in Irving, Texas, which operates several transplant centers. There is an opportunity to make modest or single-digit margins on the aftercare, which is usually done in an outpatient setting, if its done efficiently and effectively, she added.
Several organizations are charged with monitoring the quality of organ transplant programs. To participate in Medicare, transplant programs have to achieve certain survival rates and do a certain number of operations annually. All U.S. transplant centers and organ procurement organizations must be members of the Organ Procurement and Transplantation Network to get paid by Medicare.
The network, which maintains a national registry for organ matching, is run under federal contract by a private not-for-profit organization known as the United Network for Organ Sharing, or UNOS, which acts as a national clearinghouse for organ donations and oversees the establishment of and qualifications for transplant programs.
Recently, UNOS adopted new statistical methodologies to quantify quality outcomes in organ transplant centers. If a potential problem is found, UNOS does a review of all program activities and follows up with the transplant program until outcomes improve. If they dont, the center may face probation or closure.
David Conti, professor of surgery and chief of the section of transplantation at the 590-bed Albany (N.Y.) Medical Center, challenges the notion that centers are closing or getting cited regularly for violations. Very few programs have been closed, he said in an e-mail. The outcomes data reporting mandated by UNOS have identified very few programs with less-than-expected outcomes, which have closed. This indicates to me that the system works.
But it was a poor track record among certain donor programs that caught the attention of Sen. Chuck Grassley (R-Iowa), ranking member of the Senate Finance Committee. In 2005, when he chaired the panel, Grassley began scrutinizing the federal bureaucracys oversight of the transplant system following violations of organ procurement policies and other problems at several medical centers in California, including St. Vincent Medical Center in Los Angeles and UCI Medical Centers liver transplant program.
I remain concerned that these examples may indicate more systemic problems underlying organ procurement in this country, Grassley had written in a 2006 letter to David Walker, comptroller general of the Government Accountability Office. Grassleys office declined to comment on the potential impact of the final rule on transplant centers.