<img style="float: right;" src="https://opedge.com/Content/OldArticles/images/2005-12_08/per.jpg" hspace="4" vspace="4" /> I have been asked to write the last <i>Perspective</i> editorial of 2005. What have others written during the year? Each editorial was an excellent presentation on a very important subject with a common theme. That theme is a need for more money to cover practice expenses, to pay for the uninsured and underinsured, to encourage research, education, and lobbying, and to promote O&P innovation. At a time when healthcare costs are spiraling out of control, when the per-capita cost for healthcare in the US is nearly double what the next highest country expends, when the Medicare-eligible population will be growing faster than at any time in our history, is it realistic to think that money will be available to fund the initiatives suggested, no matter how well-intentioned they are? The real risk is that Medicare reimbursement will drop to the levels paid by many insurance carriers in competitive markets. O&P is a small industry that has relatively few participants, without economic resources to fund the pursuit of these goals. The reality is that cost containment is the future. Payers are implementing pay-for-performance reimbursement and disease management programs as well as high-deductible health plans to reward effective use of less costly ways to achieve established, objectively measurable outcomes. High-deductible plans cause patients to become more cost-conscious as they become personally responsible for more of the cost. Innovation in orthotics and prosthetics is necessary to stretch available resources when the innovation reduces costs while improving outcomes. Hospitals and physicians have moved away from inpatient services to ambulatory services to lower costs. Hospital testing utilization rates have decreased, as have inpatient lengths of stay. While pharmaceutical costs have increased, this is because effective use of pharmaceuticals reduces or eliminates the need for more expensive hospital services. Healthcare costs need to stabilize even as our population ages. Incentivizing the use of less costly prefabricated devices may cause a quicker-than-anticipated transition away from custom-made devices. Evidence of measurable outcomes and prevention of future complications will more likely be forthcoming from those who promote prefabrication than those who custom-fabricate. While this is a strong statement, cost-effective innovation is growing faster in the prefabricated arena because that is what prefabrication is intended to do--reduce cost. <h4>Be an Effective Competitor</h4> Facilities and practitioners should not count on higher reimbursement. You need to be an effective competitor as to access, cost, and measurable quality and outcomes by: <ol> <li>Providing highly effective patient- and customer-friendly devices and components;</li> <li>Supplying the least costly but necessary device and components for what the patient or customer needs;</li> <li>Significantly reducing your unit labor and component costs associated with each device;</li> <li>Increasing your market share by achieving high marks in referral source and patient or customer satisfaction surveys; and</li> <li>Recognizing and meeting your competition, large and small, head-on with innovation in marketing, joint venturing, group purchasing, alliances, integration activities, cost accounting and cost containment.</li> </ol> Lobbying for increased reimbursement and grants for research and education is a wonderful goal, but it is expensive. The O&P industry historically has not expended, even on relative basis, the money that the pharmaceutical, medical device, medical, or hospital industries spend to politically influence funding decisions. While other <i>Perspective</i> authors in 2005 expressed a desire for more money, this one does not. Industry survivors will do more with less, grow market share, meet measurable outcome standards, and have highly satisfied patients, payers, customers, and referral sources. There is sufficient money available to support necessary orthotics and prosthetics in America, and even more for research, education, and innovation, if fraud and waste are reduced. In my opinion, the O&P industry would do well to move its hopes away from higher reimbursement and focus on cost containment, establishing outcome benchmarks, and implementing information systems that can reliably measure patient outcomes. And one final point: There will always be a need for facilities and practitioners who are outstanding in doing customized orthotics work. How much will be custom-fabricated will be determined by how much better patients do using custom-made rather than prefabricated devices. Available cost and outcome data will drive the direction of the industry. <i>John Latsko is a partner in the health law practice of Schottenstein, Zox & Dunn, Columbus, Ohio. He can be contacted at 614.462.2329; jlatsko@szd.com</i>
