Centers of Excellence or Discount Centers?

(Editor's note: This is the 2nd of an ongoing series of commentarys addressing social, economic, and health policy issues associated with transplantation.)

Over the past decade, public and private insurers have taken significant and sometimes controversial steps to control health care costs. Transplant procedures have been an easy target.

In the mid-1980s, the concept of restricting payment for transplant procedures to so-called "centers of excellence" began to emerge as a heuristic means to address high costs and poor quality.

The concept of centers of excellence is based on what might be called the "experience hypothesis" which, in turn, is often coupled with the belief that "practice makes perfect."

The logic of the argument is straightforward. It is assumed that costs and quality are directly related to the number of procedures performed. In effect, higher volume centers have better outcomes, and lower costs.

The relationship between the numbers of transplants a program performs and patient outcomes, usually graft and patient survival, has been the subject of numerous studies. However, in contrast, no rigorous, well-designed study has definitively examined the association between transplant center volume and accounting costs.

The number of transplants required to achieve acceptable results varies by procedure. For example, in the case of heart transplants, the threshold appears to be 9 per year, compared with 21 for liver transplants. Yet, given conflicting evidence, there is no agreed upon volume "standard" to qualify for transplant centers of excellence networks.

For Medicare certification, heart and liver transplant programs must perform a minimum of 12 procedures over a 12-month period, compared with 10 for lung transplant programs.

Most transplant centers of excellence networks claim to use a very rigorous process for credentialing organ-specific programs. Quality is defined in terms of structure, process, and outcome indicators. Onerous applications and site visits are usually a part of the accreditation process.

Today there are many transplant centers of excellence networks, some of which are exclusive to a particular payer, and others that can be accessed by selected insurers, after paying an administrative fee (i.e., some insurers choose to "rent" access for their beneficiaries).

Perhaps now is the time to reconsider the rationale for transplant centers of excellence networks. Many were originally established when qualified personnel were in high demand, but in short supply - a situation that no longer exists. Now, very qualified personnel are available, and some hospitals still aspire to start new transplant programs.

Also, and most regrettably, the historical evidence supporting the experience hypothesis remains equivocal. As discussed below, even the most recent studies linking volume to outcome have been problematic.

For example, there are many ways to measure volume in relationship to transplantation. Although organ transplants are essentially surgical procedures, they involve intense medical management. Some surgeons perform more procedures than others. Likewise, some transplant physicians manage more patients than their peers.

It is often argued that medical management is the key to long-term success in transplantation. If this is true, then overall transplant program volume is a weak proxy for experience.

When assessing experience, there are three relevant units of analysis - the program, the transplant surgeon, and the transplant physician. Within a given program, some transplant surgeons and physicians are more experienced than others. Also, an additional complication is apparent - long-term follow-up is largely a physician's, not a surgeon's, responsibility. Surprisingly, to date, each of the foregoing issues has gone unaddressed.

Despite a lack of definitive empirical evidence, transplant centers of excellence networks routinely assure payers and, to a lesser extent, patients, of lower costs and higher quality.

Meanwhile, it's becoming less clear how transplant centers benefit from network participation. Other than being listed as a participating provider, transplant centers, in exchange for discount pricing, are guaranteed little, if anything.

It could be argued that centers of excellence networks unnecessarily limit patient access to transplantation, and prohibit competition among centers. Because volume is a condition of participation, networks have effectively discouraged new program development, unless hospitals are willing to underwrite the considerable costs of those procedures required to meet the minimum entry-level volume thresholds. Finally, with fewer programs, patients have less choice.

Despite the foregoing, there is still a sound rationale for promoting high volume programs. Given concerns about the financial viability of transplant centers, and relative to national organ distribution policies, which consistently favor transplanting the sickest, most costly patients first, it behooves transplant centers to list and to transplant as many patients as possible, thereby spreading the risks of adverse outcomes and higher costs over as many patients as possible. The objective is to minimize the devastating "outlier" effect associated with adverse selection.

Based on this analysis, it is difficult to draw any firm conclusions. However, the evidence suggests the following: as the overall quality of transplant services has become more constant, and less variable, the primary function of centers of excellence networks is to extract substantial discounts from reluctant transplant centers. Consequently, centers of excellence have unwittingly become discount centers.

Dr. Roger W. Evans is an independent health care consultant. He was formerly with the Mayo Clinic in Rochester, Minnesota and the Battelle Human Affairs Research Centers in Seattle, Washington. He can be reached at [e-mail], or through his web site at www.evans-health.com.