Quantifying the Cost of Wounds and Wound Care

Peter L. Salgo, MD: Let’s talk about wound care now in the 21st century and in the metrics we all appreciate. Let’s talk about money, all right? What percentage of the payer budget is dedicated to wound care, or winds up being diverted to wound care because of the circumstances? Who’s got a number on this?

Michael T. Kazamias, MS, DPM: It’s difficult to pin down because wounds….

Peter L. Salgo, MD: Oh, try.

Michael T. Kazamias, MS, DPM: Well, wounds are so poorly tracked based on where are they coming from, the risk structure in a particular area, who pays the bills? It’s very difficult to quantify the cost. Many times, patients get admitted to the hospital with diagnostic related groups. Many times the wound may be a secondary or tertiary finding on that, which may not appear as the primary diagnosis, but is the cost driver for that patient.

Then we look at what’s the overall cost to society. CMS [Centers for Medicare & Medicaid Services] has a program called MRA, which is Medicare Risk Adjustment. This applies primarily with the managed care companies in the Medicare Advantage space. What they do is aside from providing these health plans an ability to pay for an enrollee based on a flat rate, when the physicians report back to CMS the conditions that have befallen that patient, CMS and Medicare adjust that score accordingly. I would say in the past at least 10 years, Medicare has determined that the HCC score, which is the Hierarchical Condition Score….

Peter L. Salgo, MD: Say that 5 times fast.

Michael T. Kazamias, MS, DPM: Exactly. They call it an HCC score. Basically, what it says is that if a patient has a certain particular condition, whether it’s diabetes, or a wound, or a vascular disease, Medicare will adjust that reimbursement to the provider, to the insurance plan, to properly account for the cost. Now with chronic wounds, the important point is that Medicare has determined that it is in the top 5 of the most expensive conditions that can be set in Medicare benefits.

Peter L. Salgo, MD: That’s huge.

Michael T. Kazamias, MS, DPM: Huge.

Peter L. Salgo, MD: Which raises the question, how are we, as healthcare providers, doing it, as recognizing this? I want to ask about coding, not because I’m interested in getting paid, but coding in the interest of estimating how big a problem this is. How often does this simply get coded? This is a 1, 2, 3, .892 code. How often does that pop up?

Michael T. Kazamias, MS, DPM: Not very often.

Peter L. Salgo, MD: That’s my point, isn’t it?

Michael T. Kazamias, MS, DPM: Because it’s sort of a cottage industry. You can’t trace who’s providing the wound care, and the costs are separated in different buckets. Whether it’s the physician, whether it’s the hospital, whether it’s the home care agency, all of those are under a different mechanism for reimbursement. Some collect codes, some don’t. It’s very difficult to quantify the cost, even to find the code.

Peter L. Salgo, MD: You know, what’s interesting to me is you can focus on the codes, you can focus on the money, you can focus on Medicare and Medicaid, but try focusing on the patient for just a moment. This has tremendous impact whether you code for it or not, doesn’t it?

Robert J. Snyder, DPM, MSc, CWSP, FFPM RCPS: Well, when you think about where these patients are most likely to be treated, I think there’s a misconception that many of these patients are treated in hospitals. First and foremost the main reason why a diabetic patient would be admitted to the hospital would be because of an infected wound.

There was a recent study done by Caroline Fife, MD, FAAFP, CWS, and colleagues just looking at this. What they did is they looked at a huge number, hundreds of thousands of people in the Medicare rolls, and they found that the vast majority of these patients are treated in an outpatient setting. Very often those codes are not tracked.

Peter L. Salgo, MD: When you say that they’re treated or that they’re coming into the hospital because of a wound, often what you see, in my experience, is they come in coded as DKA [diabetic ketoacidosis], or some horrible complication with their diabetes. Then you look further and there’s this purulent wound, which probably pushed everything over the edge. But they’re not coded as a wound, right?

Michael T. Kazamias, MS, DPM: You have to look at the usual suspects. For example, if someone comes in with cellulitis. You look at the probability that a cellulitis occurred because of some infection in the skin, or a chronic wound, and then you can start investigating deeper and backtrack as to this may be the inciting cause, is actually the wound, and there’s a complication associated with it.

Peter L. Salgo, MD: That was my initial question, where’s the chicken, and where’s the egg over here? Again focus on the patient for a moment. We’ve been talking about wounds as cost centers. Talking about wounds as things that people have to treat. But what is the impact of this wound, if you would, on somebody who’s got it? A chronic wound, something that won’t go away. How does it affect their daily life? Because at the end of the day, I think we’re all charged with making people feel better, right?

Robert J. Snyder, DPM, MSc, CWSP, FFPM RCPS: It has a tremendous impact on a patient’s life. A patient unfortunately very often becomes defined by that wound. They’re seeing a doctor. They’re seeing a home health individual. They’re going for MRIs [magnetic resonance imaging]. They need antibiotics. They may need hyperbaric oxygen. There are a whole host of things. Secondly from a societal standpoint, they’re significantly impacted because they isolate themselves. Very often these wounds have an odor. They are afraid to even play cards with their friends, to be intimate with their spouses. Sometimes they have pain, sometimes the pain is significant, particularly if they have peripheral arterial disease.

When you look at these patients, and again, patients who have chronic wounds often have an underlying disease. That disease certainly will have an impact as well.