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Spectrum heart plan to show red
Spectrum Health’s proposed heart transplant program would cost $3.78 million to run and would lose an estimated $2 million during its first year of operations, according to the health system’s application to the Michigan Department of Community Health.
Spectrum estimates that as many as 33 heart transplants could be performed at the Meijer Heart Center during the program’s first three years: nine the first year and 12 in each of the two subsequent years.
The health system is seeking state approval to launch a heart transplant program, likely to begin in 2011. Its next step is a review by the Alliance for Health, the local nonprofit health planning agency, which is expected during January, Spectrum Health spokesman Bruce Rossman said.
MDCH spokesman James McCurtis said the department has until March 2 to take action on Spectrum’s application. He said the department sought counsel from the attorney general’s office, but did not elaborate.
“We did get advice from the attorney general and that’s confidential. While it’s under review, we are considering the legality of it, we are considering the standards, and see if they will meet them,” McCurtis said.
Revenue from other hospital services would be needed to subsidize the transplant program during the initial period, states the application for a Certificate of Need.
“Until completion of the initial start-up phase of the proposed transplant program, after which time agreements will be developed with third-party payers, the costs of the program will be subsidized by revenues received for other services provided by Spectrum Health Hospitals,” the application states.
Rossman said that Medicare would provide no heart transplant coverage until the program has performed 10 transplants. Medicare patients in the early group would not face hospital charges.
“Medicare won’t pay for any until we’ve done at least 10,” Rossman said. “There would be no charges for Medicare patients, but the first 10 patients won’t necessarily all be Medicare. We could at any point negotiate with third-party payers, and they could all be different.”
The cost of renovations would be about $500,000, mostly going to create “positive pressure” rooms, Rossman said. These rooms have air systems that allow the air pressure to be higher than the adjoining hallway, thus preventing contaminants from entering.
In the application, Spectrum Health proposes to modify three intensive care rooms for heart transplant patients. Each room would have HEPA filtration, temperature controls, bathrooms with showers, washable ceiling tiles and a patient monitoring system.
In 2008, the hospital referred 19 patients for heart transplants, according to the application. The hospital expects about 20 more referrals for 2009, including 15 patients who have received ventricular assist devices.
Spectrum initiated the VAD program in April, in anticipation of establishing a heart transplant program. VADs help the heart pump blood. They are not artificial hearts, which replace the natural heart.
“Initiation of the VAD program has increased clinical capabilities to care for transplant-eligible patients,” according to the application.
The average charge per transplant would be $544,337 and the average loss would be $226,598. The program would require five new full-time equivalent employees, including a heart transplant program administrator.
Rossman said negotiations are underway with a transplant surgeon certified by the United Network for Organ Sharing.
The Meijer Heart Center houses the state’s busiest open heart surgery program, serving 972 adults and 117 children during 2008.
AeroMed, Spectrum’s helicopter ambulance service, would be used for transportation of organs, donors and blood serum, according to the application. The hospital has an agreement with a private firm for fixed-wing service for longer trips.
Spectrum Health would have 18 months following Certificate of Need approval to implement the program.
Currently, heart transplants in Michigan are performed at the University of Michigan, which did 33 in 2007, and Henry Ford Hospital, which did 10 in 2007. Children’s Hospital of Michigan handles pediatric cases under Henry Ford’s Certificate of Need.
Earlier this year, there was some confusion at MDCH over whether Michigan has two or three heart transplant programs, but the conclusion was that the Children’s Hospital and Henry Ford services count as a single program. MDCH standards limit the number to three.
“We think the CON Commission has done a fine job of counting,” Rossman added.