Microwave Ablation makes Business Sense Today and in the Future

The U.S. healthcare industry is in the midst of a fundamental transformation, stemming largely from rising costs and inconsistent quality of care. Healthcare reform laws and economic pressures are causing a shift in focus from volume-based to value-based care.

Payers and providers continue to explore innovations that improve clinical outcomes and reduce costs, and Minimally Invasive Surgery (MIS) is one such innovation.

Minimally invasive procedures offer patients reduced pain and scarring, shorter hospitalization, and a quicker return to activities of daily living. Studies show that MIS is frequently associated with reduced rates of complications, mortality, and morbidity. The data also suggest that MIS is associated with cost benefits, likely due to reduced length of stay (LOS) and fewer complications. The potential net result of replacing open procedures with MIS is that both the payer and the provider could see improved outcomes and a more favorable cost structure.

In the United States, payers generally reimburse the provider based on the Medicare Severity Diagnosis Related Groups (MS-DRG) system. The MS-DRG system provides a single reimbursement for an entire inpatient hospitalization, accounting for diagnosis and procedures performed during the hospital stay. MS-DRGs provide higher reimbursement for procedures with complications and/or comorbidities, and major complications and/or comorbidities. Patients with significant comorbidities prior to the surgery or who experience complications during or after the surgery (prior to discharge) are assigned a complex DRG (cDRG).

Procedures assigned to a cDRG are reimbursed at a higher rate on average than those assigned to the corresponding noncomplex, or base, DRG. The implications of DRG assignment for the payer are important because cDRGs typically result in a substantially increased expense.

Minimally invasive surgery is associated with improved clinical outcomes and reduced costs. Studies show that procedures performed via a minimally invasive surgery (MIS) approach, such as microwave ablation, would be associated with fewer complex Diagnosis Related Group (cDRG) assignments and subsequently result in reimbursement savings.