Experimental technology poses pricey dilemma for hospitals

Four years ago, Betsy W. suffered extensive bleeding from uterine fibroids. Betsy, now 45, an interior decorator in Charlottesville, Va., rejected a hysterectomy or hormone treatment because she wanted to avoid early menopause and retain the ability to have children. So she opted for a new experimental therapy.

That therapy, called magnetic resonance-guided focused ultrasound or simply focused ultrasound, uses high-intensity ultrasound beams to destroy uterine fibroids. Betsy, who asked that her last name not be used, entered a non-randomized trial at the University of Virginia Medical Center to evaluate the new treatment. She didn't want a trial in which she could be randomly assigned to a placebo group. “I wanted to be treated, not to further science,” she said.

The technique combines an MRI machine with an ExAblate ultrasound unit, manufactured by Israel-based InSightec. The ExAblate costs about $1 million, and the device's extended service contract costs about $75,000 a year, according to ECRI Institute, a not-for-profit based in Plymouth Meeting, Pa., that evaluates new medical technologies. According to ECRI, per-procedure costs for ExAblate treatment of uterine fibroids are $10,000 to $25,000. Betsy's insurance paid for only a diagnostic test. The University of Virginia clinical trial picked up the rest of the cost.

The Food and Drug Administration approved marketing of the ExAblate to treat uterine fibroids in 2004. In 2012, it approved the device for treating metastatic bone cancer pain. While bone cancer pain can be eased in about two-thirds of patients through chemotherapy, hormone therapy, radiopharmaceuticals, bisphosphonates and pain medication, these treatments are not effective in the remaining third, so new treatment options have been sought. In other countries, focused ultrasound is used for dozens of other applications, including facet joint arthritis, adenomyosis, essential tremor and Parkinson's disease.

Manufacturers are marketing many pricey new technologies such as the ExAblate machine, the NanoKnife, a device for destroying hard-to-reach tumors, and other devices to hospitals and physicians. But these technologies often present hospital administrators and physicians with dilemmas. They feel competitive pressure to offer their patients what could be a less invasive and more effective treatment options. But many of these technologies have not been fully tested in randomized clinical trials, and insurers are balking at paying for their use. ECRI this year placed focused ultrasound on its annual top 10 “watch list” that assesses expensive, unproven technologies.

According to the Focused Ultrasound Foundation, 24 U.S. centers offered focused ultrasound for uterine fibroids and/or bone metastases as of January 2014. Hospitals may enjoy the “prestige and cachet” of being the only provider in their market to own a focused ultrasound unit, but with a

$1 million price tag, it is a hard sell in the current cost-constrained environment, said Dr. James Larner, chairman of radiation oncology at the University of Virginia who has used focused ultrasound to provide palliative treatment for bone cancer pain. “Decisionmakers are typically not willing to buy expensive equipment unless there is compelling evidence that it will be cost-effective.”

The first randomized trial, involving nearly 150 patients with painful bone metastases comparing focused ultrasound with a placebo, was published in March in the Journal of the National Cancer Institute. Researchers concluded that focused ultrasound provided lasting pain relief in patients who failed, were not candidates for, or declined radiation treatment.

Still, most insurers currently do not cover focused ultrasound because of the previous dearth of randomized trials, said Rohit Inamdar, a medical physicist at ECRI. Patients such as Betsy W. who don't want to be randomized make it difficult to conduct such trials.

Medicare offers limited coverage. In April 2013, the CMS announced a temporary code for a single session of focused ultrasound for bone pain relief. It pays $3,300 for a session, with a $660 beneficiary copayment.

Dr. Pejman Ghanouni, an assistant professor of radiology at Stanford University Medical Center who co-authored the study in JNCI, uses focused ultrasound to remove fibroids, deploying MR imaging to precisely target tissue for ablation. Patients return home the same day and resume normal activities in one to three days, he said. He also uses focused ultrasound to treat bone cancer pain, and the pain is decreased or is eliminated within a week, he added. “Investments in (focused ultrasound) at Stanford have also led to new multidisciplinary clinical and research collaborations and the development of new applications,” he said.

Larner offers a more cautious assessment. “The technology has tremendous potential, but I think it's in its infancy,” he said. Although bone cancer pain and fibroids are the only FDA-approved indications, he believes others eventually will be identified. “To a certain extent, it's a technology in search of an application. I'm not sure bone pain palliation is the best use. The highest and best use of the technology remains unknown.”

Like many insurers, Capital BlueCross in Pennsylvania has refused to cover focused ultrasound. In December, Capital said there is insufficient evidence from randomized or nonrandomized controlled trials that focused ultrasound improves health outcomes for any clinical application, and that additional well-designed studies with sufficient numbers of patients and good follow-up are needed. Thus, it considers focused ultrasound investigational.

“We encourage our members who may seek the services that are considered experimental to work with their physician around becoming enrolled in a clinical trial,” said Dr. Jennifer Chambers, Capital's chief medical officer.

Tammy Garcia, vice president of sales and marketing at InSightec Americas, the ExAblate machine's manufacturer, said it's difficult to conduct a randomized clinical trial on a new technology that offers a less invasive treatment option because most patients prefer that option and don't want to be randomized. Her company has hired Hudson, Mass.-based Argenta Advisors to help patients with insurance coverage issues.

Scott Sonnenschein, vice president of hospital operations at Rush University Medical Center in Chicago, said any expensive new technology such as focused ultrasound that costs in the six figures requires multiple approvals at Rush, going all the way up to the president. He often has senior physicians asking for new technologies.

“I'll sit down and say, OK, what does the thing cost?” he said. “What is the disposable cost? What are the staffing implications? What are the supply implications? What are we going to be reimbursed? Is there a self-pay market or will this just be the hospital using its charitable mission to allow patients to use this technology?” With experimental technology, he said, Rush tends to wait and see.

Still, Rush's new interventional radiology chairman, Dr. Bulent Arslan, persuaded Sonnenschein a year ago to acquire another new technology, the NanoKnife, manufactured by Albany, N.Y.-based AngioDynamics. The $200,000 NanoKnife is also on the ECRI watch list. AngioDynamics said it has sold 55 of the devices to U.S. hospitals and 60 in Europe. ECRI's Inamdar said there's an additional $2,000 cost for the NanoKnife's single-use electrode probe, plus a service and maintenance warranty that runs from $30,000 to $85,000.

The NanoKnife, through a process called irreversible electroporation, uses electrical currents to zap inoperable or hard-to-reach tumors. A surgeon or interventional radiologist guides up to six electrodes around the tumor. The NanoKnife sends currents between the needles, destroying tumor masses.

Arslan said the NanoKnife is an attractive option when patients, typically with tumors less than four centimeters, cannot be treated with other alternatives. Alternative methods such as radio-frequency ablation and cryotherapy pose risks of damaging vascular structures and also carry an increased risk for causing blood clots compared with the NanoKnife, he said.

The FDA approved the NanoKnife for surgical ablation of soft tissue in 2006. AngioDynamics purchased the developer and started marketing the device in 2008. Surgeons and interventional radiologists began using and promoting the device off label to treat malignancies such as liver and pancreatic cancer. But in 2011, the FDA ordered AngioDynamics to stop promoting the NanoKnife for treatment for a particular disease or condition and to immediately cease marketing the NanoKnife for unapproved uses, including treating specific cancers. Clinical trials on the Nanoknife are under way in Europe for treating liver and pancreatic cancers.

As with focused ultrasound, most insurers do not specifically cover NanoKnife treatment. Aetna considers the use of irreversible electroporation, including use of the NanoKnife, for tissue ablation experimental and investigational because of insufficient evidence in the peer-reviewed literature. Some other insurers have no coverage policy for the NanoKnife. Many patients pay for the treatment out of pocket, Inamdar said.

The CMS has no national coverage policy for the NanoKnife. Thus, coverage decisions for NanoKnife treatment are left to local Medicare contractors. Since the device is not FDA-approved for cancer indications, the local contractors are free to not cover use of the device.

Sonnenschein said Rush has received payment from Medicare and private insurers for NanoKnife treatments through standard codes for cancer treatment. “We tend to cover costs on inpatients and struggle to get costs covered on outpatients,” he said. “This is part of the normal process as a new technology eventually finds its way toward the mainstream.”

Like focused ultrasound, the Nano-Knife has come under criticism because of the lack of randomized controlled trials. Arslan argues it is difficult to conduct such trials because patients do not want to be randomized.

But neurosurgeon Leonard Cerullo, founder and medical director of the Chicago Institute of Neurosurgery and Neuroresearch, said randomized trials are essential. “Research is randomized all the time with chemotherapy, so I don't buy that argument,” he said. “It's rather an excuse than an argument.”

Even so, Joseph DeVivo, CEO of AngioDynamics, said there is a good business case for hospitals to buy the NanoKnife. “As with any new technology, the first adopters are usually seen as the leaders in that particular field,” he said. “We feel NanoKnife is the next generation of technology for focal ablation. We are committed to establishing its clinical and economic value for our customers.”

Dr. Sean Tunis, founder and CEO of the Center for Medical Technology Policy, a Baltimore-based not-for-profit, said providers and insurers need to consider costs and value in deciding which technologies to offer and pay for. The problem is that considering cost is “the third rail” in U.S. healthcare because it is immediately called rationing.

But if the cost-effectiveness of focused ultrasound is examined more broadly, the technology will be rapidly embraced by providers and insurers, said neurosurgeon Dr. Neal Kassell, founder and chairman of the Focused Ultrasound Foundation in Charlottesville. It allows patients to return to work faster and be more economically productive than if they were treated with alternative methods. “This technology will come into its own in this new paradigm of societal cost,” he said.

Howard Wolinsky is a freelance writer based in Flossmoor, Ill.