As more Americans approach their twilight years, a new, less invasive procedure for repairing faulty heart valves, called TAVR, offers patients a new lease on life. The only challenge is high costs limit its profitability.
Interventional cardiologist Stanley J. Chetcuti, left, and cardiac surgeon G. Michael Deeb perform a minimally invasive heart valve replacement at the University of Michigan Frankel Cardiovascular Center in Ann Arbor. Photographs by C.J. Benninger

Nearly five years ago, the U.S. Food and Drug Administration approved a new type of heart valve for patients with a progressive cardiac condition who were deemed too ill to undergo standard heart surgery. The decision opened the door to treatment for patients otherwise doomed to struggle with increasingly creaky aortic valves, the ones that control the flow of blood throughout the body.

But what is a lifesaver for these patients, and a welcome option for cardiologists who care for them, isn’t necessarily good news for the participating hospitals, at least fiscally. With a price tag of about $33,000, the valves take a huge bite from reimbursements that cover a team of surgeons, interventional cardiologists, and support staff, along with resources such as a hybrid operating room or a catheterization lab.

Transcatheter aortic valve replacement, or TAVR, is arguably the hottest innovation in cardiac care today. A handful of health systems in metro Detroit offer TAVR, including the Detroit Medical Center, Henry Ford Health System, the University of Michigan, Beaumont Health System, Oakwood Healthcare (now part of Beaumont), and more, with others likely to add the procedure in coming years.

“Everybody wants to be in the game, because if you’re not in the game your ability to market yourself as a cardiovascular center is pretty limited,” says Dr. G. Michael Deeb, the director of the multidisciplinary aortic clinic at the U-M Cardiovascular Center in Ann Arbor, and a leading TAVR researcher.

The procedure addresses aortic stenosis, a disease that comes with age. Like mechanical valves that stiffen as they accumulate deposits over time, so do heart valves.

TAVR allows physicians to snake a catheter through an artery at the groin up to the heart and place a crimped-up valve within the ailing aortic valve. The TAVR device then expands, pushing aside the failing valve. From there, it takes over the original valve’s function, opening and closing like healthy tissue.

As more people reach retirement, the potential TAVR patient population increases. According to one analysis, more than 91,000 Americans with aortic stenosis qualify for TAVR, and another 8,200 are entering the rolls annually. Today, Medicare will cover patients who are at very high risk of dying if they undergo surgical aortic valve replacement. Clinical trials currently underway may pave the way for intermediate-risk patients — those whose option now is to either have their chests cracked apart for open-heart surgery or forgo surgery and live with the condition.

“This procedure … will probably be one of the most common procedures performed because we have an extremely large aging population,” Deeb says. “Everybody wants a piece of the pie.”


In June 2015, the U-M Cardiovascular Center clocked its 500th TAVR case, a little more than four years after it undertook its very first patient in a clinical trial for Medtronic’s CoreValve TAVR system. By the end of 2015, just over 600 procedures had been performed.

High volume doesn’t necessarily equate to profits, though. Nationally, hospitals lost between $2,800 and $7,500 per TAVR case, according to various cost studies. Reimbursement in the pivotal clinical trial for rival Edwards Lifesciences’ Sapien TAVR valve system averaged $41,000, for instance, but with only Medtronic and Edwards Lifesciences currently approved to market TAVR valves in the U.S. the cost of the device hasn’t budged much from the low- to mid-$30,000 range.

That doesn’t leave a lot of wiggle room for covering other hospital expenses such as investments in infrastructure, length of stay, and complications. Even so, some Detroit-area hospitals have managed to stay in the black.

At U-M, efficiency proved to be one pathway to profitability. When the TAVR program launched in 2011, U-M already had a hybrid operating room — and it was a fully booked operating room. Deeb and the other TAVR team members initially had to squeeze their cases in on Friday morning, and were eventually given the full day on Friday for procedures. Still, they only completed two cases a day by staying until 7:30 p.m. They brought in efficiency engineers, and plotted out and timed everyone’s activities — from doctors to nurses to cleanup crews — step-by-step. Then they looked for opportunities to perform functions in parallel.

“Our ultimate goal was four (procedures) by 5 o’clock,” Deeb says. “Now it’s five (procedures) by 5 o’clock. To get five by 5 p.m., we needed two rooms so we could jump from one room to another. While they’re cleaning one room, we have the patient asleep and ready in the other room.”

Volume grew from eight cases in 2011 to 137 cases in 2014 (FY). TAVR’s direct margin per bed day, one way to assess profits, totaled $889 in 2011. By 2014, that grew to $1,004, and with the help of the fully implemented efficiency program, the sum reached $2,600 in 2015, according to the most recent analysis available.

High volume has allowed the center to get valves on consignment rather than purchase them — an upfront cost that can reach $200,000, since the two manufacturers offer several types and sizes of valves. “That’s a chunk of money that’s sitting there, not doing you any good,” he says. “If you can get them on consignment, you don’t pay for it unless you use it.”

Dr. Ruth Fisher, vice president of Henry Ford’s Heart and Vascular Institute

Other medical centers took a different approach to saving money. At Henry Ford’s Heart and Vascular Institute in Detroit, for example, they targeted the TAVR patient’s length of stay in the hospital. As it stands, TAVR patients tend to be elderly; the average age for extremely high-risk patients in the trials was mid-80s. However, since the procedure is less invasive and traumatizing than surgery, some patients can leave the hospital within days of their procedure.

That can result in big savings for hospitals. According to one look at Medicare TAVR patients, the total cost for a hospital stay of eight or nine days in 2012 was $61,792, while a stay of four to five days dropped to $51,850. In 2014, physicians at Emory University Hospitals in Atlanta reported that they shaved about $10,000 per procedure off hospital costs by reducing length of stay by an average of two days. Shorter stays also free up resources such as hospital beds and staff, and limit costly complications such as hospital-acquired infections.

“Our goal is to be one of the top five programs in the country, and part of being the best is to be the best in all the different areas,” says Ruth Fisher, vice president of Henry Ford’s Heart and Vascular Institute. “We knew we could be better on length of stay.”

Henry Ford began by developing a protocol for identifying which TAVR patients would be good candidates for earlier discharge by assigning a physical therapist to work with the patient early in the recovery phase, to get him or her on their feet more quickly. They also retrained nursing staff for TAVR procedures rather than standard surgery, and worked with discharge planners to educate patients and their families about the possibility of an earlier discharge.

“Many of our patients didn’t understand that they would be going home in four or five days, and their families didn’t understand that,” Fisher says. “Rather than having them be told on day three, ‘Your mom might be going home in two days,’ we frontloaded that with conversations when they came into the clinic. Having those conversations earlier really helped (reduce) our length of stay.”

The average length of stay dropped from 10.2 days in the first half of 2014 to six days in the second half, according to Mary Whitbread, the institute’s vice president for finance. Length of stay continued to dip in 2015, in its most recent assessment. At the same time, the number of TAVR procedures — 140 in 2014 — was projected to increase 30 percent in 2015, while direct costs per case declined 10 percent.

Dr. Theodore L. Schreiber, president of the Detroit Medical Center’s Cardiovascular Institute, says the DMC’s transcatheter aortic valve replacement program has attracted more researchers to be park of the next medical breakthrough. In the case is the mechanical heart pump used in the first successful open heart operation at in Detroit in 1952.

DMC’s Cardiovascular Institute also counts itself among metro Detroit’s high-volume TAVR centers. DMC boasts the title of placing the first CoreValve in a patient in Michigan in early 2011, but it has followed another tack that takes advantage of the skills and experience of its TAVR team to distinguish itself.

“Our particular ilk that got us well-established in the market is that we would do transcatheter valve implantations on the very highest extreme-risk patients,” says Dr. Theodore L. Schreiber, an interventional cardiologist and president of DMC’s Cardiovascular Institute. Schreiber’s experience with TAVR dates back more than a decade as a researcher in a TAVR feasibility study at Beaumont Health System in Royal Oak.

“We have become recognized in the market as providing good results for the sickest patients getting transcatheter valve implantation, and that has permitted the informal referral networks that we have to continue sending us cases across the metropolitan area and, in fact, across the state.”

Medicare reimburses TAVR cases — with one paying more for complications and whether the patient has other illnesses. Payments may vary to adjust for the hospital’s location, its status as a training facility, and whether or not it has a disproportionate share of indigent patients. In this way, hospitals aren’t penalized for accepting patients who qualify for TAVR but have poorly functioning kidneys or lungs, for example, that may make their cases more challenging.

But TAVR isn’t risk-free, either. In the trials and in practice, some patients have experienced strokes or bleeding problems, developed heart rhythm disturbances that required a permanent pacemaker, or even died. Nationally, the procedural mortality rate is 5.2 percent, and the stroke rate is 1.9 percent, according to a study published in 2015 in the Journal of the American Medical Association.

Complications during and after a procedure add to TAVR costs: The total incremental charge from complications in the two key clinical trials hovered around $11,000. Keeping complications to a minimum not only benefits the patient but also the bottom line. DMC relies on its staff’s expertise in techniques, such as the use of catheters and circulatory support systems, to avoid complications in even the sickest patients, Schreiber says.

Beyond its direct contribution to the bottom line, TAVR also provides indirect benefits. U-M, Henry Ford, and DMC all experienced a bump in their surgical aortic valve replacements as a result of TAVR programs, according to Deeb, Schreiber, and Fisher. The reason? Patients with aortic stenosis would visit their clinics hoping to undergo TAVR, but wouldn’t qualify under the FDA’s rules. Yet these patients, who were still in need of care, were suitable for standard surgery.

“We found that more patients had come to see us for aortic problems, and some will be better candidates for surgery,” Fisher says. “That’s pretty common for TAVR programs, that there has been a lift in surgical programs.”

This coattail effect tends to benefit a hospital because the contribution margin on surgical aortic valve replacements can be hefty. But TAVR’s halo effect may be the more impactful benefit. Heart centers with TAVR programs are considered the crème de la crème — a reputational boost that can affect everything from referrals to recruitments.

“When people think you do TAVR really well and you’re a high-volume area, they then send you more complex patients in general,” Fisher says.

Being seen as a leader in the use of TAVR can be a draw for hiring talented staff and attracting physicians who want to be affiliated with the program, Schreiber adds. It’s also a magnet for researchers who want to develop the next medical breakthrough.

“Our success in being able to deal with very sick patients, sicker than average undergoing TAVR, has led to interest on the part of the innovators of other valve techniques to consider us for inclusion in other research studies,” Schreiber says.

The biggest draw for those facilities that overcame the cost hurdles and developed viable programs might be the opportunity to be in on something momentous. Schreiber calls TAVR a game-changer. Fisher emphasizes the way TAVR reinforces team spirit, boosts morale, and inspires personnel to do more. Deeb sees TAVR as a new chapter in cardiovascular care, replacing surgery with less invasive treatments for all types of valve diseases and beyond.

“My mentees someday will be talking to their mentees and they will say, ‘I can remember when I was a student with Dr. Deeb, who would saw their chest open to replace an aortic valve.’ That second generation of students will shudder and say, ‘Oh, you’re kidding! Now we just use needle puncture.’ ”