“Surf’s up!" An industrywide wave is rising. Catch it and don’t get left on the beach. Below is our forecast of procedure volumes through 2009 for elderly spine patients. So far, the industry has only focused on spine patients under 65 years of age. Go ahead, ride that tide, but be careful because companies hanging out in the past might just fall victim to a rip current.
It’s Not Where You Have Been, But Where You Are Going
The raw numbers are remarkable. There are currently over 37 million people over the age of 65 in the United States. The U.S. Census Bureau projects that by 2020, over 54 million people will be older than 65. This unprecedented demographic shift presents significant opportunities and daunting challenges for the spine industry. Look at where we have been in spine, and where this seismic shift could take us.
One of the primary focuses in spine has been on treating common diagnoses such as degenerative disc disease and herniated discs. Based on the PearlDiver Patient Records Database, these diagnoses occur most often in patients aged 40-55. Indeed, indications in the age group are predominately disc disorders, spondylosis, sciatica, and idiopathic/adolescent scoliosis, in the case of younger patients. Table 1 is drawn from the PearlDiver Patient Records Database and displays the age ranges by gender where spine disorders are most commonly diagnosed. While these diagnoses are commonly seen in patients 35-60, these ranges represent the highest incidence rates.
Table 1: Age Ranges of Most Common Spine Diagnoses
Source: PearlDiver Patient Records Database (January 2004-June 2007)
The spine industry has responded by providing a myriad of implants such as screws, hooks, rods, titanium cages, PEEK/carbon fiber spacers, and plates indicated for use in surgical interventions related to these disorders. Along side of this has emerged a high growth biologics industry. We project sales of Medtronic’s INFUSE(R) (rhBMP-7), a growth factor used in spine fusion, to exceed a billion dollars by 2011.
Based on these demographics, spine has grown from a $300 million market in 1995 to a $7 billion market in 2007! We estimate that spine market revenues will grow between 12% and 14% annually over next five years. As can be seen in Chart 1, we estimate spine to be a $13 billion industry by 2012. However, we believe that revenues will increasingly be derived from the treatment of elderly spine patients.
Chart 1: Spine and Related Biologics Revenue Estimate ($ millions)
Source: PearlDiver Estimates
The Next 20 Years: A Shift in Diagnoses and More Comorbidities
In the next 20 years, the spine industry will be faced with a new demographic comprised of patients 65 and older. Surgeons and the industry are going to be challenged in addressing patients with a different mix of diagnoses and additional comorbidities.
Based on our research, degenerative disc disease and disc herniation are not the most common spine diagnoses in the elderly, as they are in younger patients. Based on MEDPAR data, lumbar spinal stenosis is the most common diagnosis (over 27%). The second most common is spondylolisthesis (15%), followed by lumbar degenerative disc disease.
As back pain is a chronic disease, many spine disorders in the elderly are the result of the progression of ailments seen earlier in life. Herniated discs, bone spurs, and osteoarthritis of the spine are common causes of spinal stenosis. Spondylolisthesis, or the forward slippage of vertebrae, can be caused by vertebral fractures caused by osteoporosis and degeneration due to aging. In the future, treatment solutions centered on spinal instability, VCFs, and canal stenosis should be a major focus for the spine industry.
According to the Agency for Healthcare Research and Quality, 23% of low back pain physician visits are from patients over 65 years of age. We estimate this will translate into over seven million visits annually from seniors for low back pain, a metric we see increasing through the next decade. According to the National Center for Health Statistics, there were over 750,000 hospital discharges for lower back pain in patients over 65 years of age in 2004. We estimate this could double by 2015.
In addition to shifting diagnoses, increased prevalence of comorbidities will be a factor in costs and treatment. Common comorbidities include diabetes mellitus, hypertension, osteoarthritis, obesity, smoking, chronic obstructive pulmonary disease, and hypercholesterolemia. According to the American Diabetes Association 12.2 million, or 23.1% of people 60 years of age and older have diabetes. According to the American Heart Association, 73 million Americans have high blood pressure.
CMS Has Already Taken Notice
In 2008, CMS (Center for Medicare and Medicaid Services) implemented the MS-DRGs (Medicare Severity Diagnosis Related Groups), which attempt to classify patient groups based on associated hospital-based resource demands and costs. On April 14, the CMS released the proposed payments for inpatient hospital stays. DRGs related to patients with multiple complications and/or comorbidities saw the greatest projected increases. MS-DRG codes related to patients admitted with major complications and/or comorbidities undergoing procedures such as anterior/posterior fusion (DRG 453), non-cervical fusion (DRG 456), and cervical fusion (DRG 471) all saw proposed payment increases of 20% or more.
Based on data from the Agency for Healthcare Research and Quality’s Healthcare Cost and Utilization Project, Medicare pays for 52% of all decompression procedures. Medicare pays for over 87% of all kyphoplasty/vertebroplasty procedures. This data also suggested that Medicare is paying for 34.7% of all posterior lumbar fusions and 38% of lateral lumbar fusions. Given that several MIS technologies approach the spine laterally, this technique may gain popularity in treating the elderly patient.
Osteoporosis and Vertebral Compression Fractures in the Elderly
According to the International Osteoporosis Foundation, over 10 million people have osteoporosis in the United States. Total osteoporosis related fractures are expected to rise to over three million by 2025. Currently, there are over 750,000 vertebral compression fractures annually. The National Osteoporosis Foundation estimates that 85% of VCFs are related to osteoporosis. Perhaps the most interesting fact is that VCFs are often asymptomatic and only one-third are actually diagnosed!
Seventy-five percent of VCFs occur in women. According to the United States Department of Health and Human Services, over 80% of VCFs are seen in patients 65 and older, with women being diagnosed 77% of the time. VCFs affect about 25% of all postmenopausal women. The condition is prevalent in 40% of women over 80 years of age.
The VCF market, which we currently estimate will drive over $500 million in revenues in 2008, should continue to see solid growth in the coming years. Kyphoplasty and vertebroplasty continue to grow in popularity as treatment choices for VCFs. We estimate there were over 140,000 percutaneous VCF procedures in 2007, and project this to rise to over 180,000 by 2009.
Table 2: Estimated Procedure Volumes for Patients >64 of Age
Source: PearlDiver Estimates
Spine Fusion and the Elderly Patient
According to Orthopedic Network News (Volume 18, Number 4, October 2007), 33% of lumbar fusions were performed on patients over 64 years of age, up from 24% in 2001. Cervical fusions performed on patients over 64 years of age rose to 16%, up from 10% in 2001.
PearlDiver analysts estimate that there were over 100,000 spine fusions performed on patients over 64 years of age in 2007, and expect this number to rise annually moving forward. We estimate there were over 75,000 lumbar fusions performed on patients over 64 in 2007, comprising the majority of fusion procedures in this age group. We present data from a paper that was submitted at NASS 2007 regarding outcomes in patients who underwent lumbar spine fusion.
NASS 2007 Submission: Electronic Posters 5. Paper 117
Spine Surgery in the Patient 80 Years of Age and Older
By: Dr. John Olsewski and Dr. John Czerwein
Based on the abstract “the purpose of this study was to determine if the results of elective surgery on the cervical or lumbar spine improved quality of life issues in a population age 80 years and older; and whether the complication rate was acceptable for patients in this age category.”
In conclusion, the authors stated that “Cervical and lumbar spine surgery for patients age 80 years and older with stenosis carries very favorable results…The complication rate was acceptable. Overall, spine surgery in this patient population carries a high satisfactory result rate with an acceptably low risk factor.”
Interspinous Spacers and the Elderly Patient
Over 50% of all decompression procedures are performed on patients 65 years of age and older. We estimate that there are nearly 250,000 decompressive surgical procedures performed annually. Spinal stenosis is the most common diagnosis associated with these procedures. In the PearlDiver database, lumbar spinal stenosis is the primary diagnosis in nearly 50% of inpatient decompression procedures as defined by ICD-9 procedure code 03.09. Stenosis occurs when the nerves in the back are compressed, causing claudication or pain that radiates down to the legs.
Interspinous process spacers could present an alternative treatment for aging patients diagnosed with lumbar spinal stenosis. Spacers are placed between the posterior spinous processes; generally at L3-L4 and L4-L5. The devices are contraindicated for patients presenting with spondylolisthesis and osteoporosis, which may limit their use for a portion of the elderly population. We estimate unit pricing of $4500-$5500.
Everything Improves With Age
Everything improves with age, except, perhaps the spine. In the coming 20 years, the spine industry will be increasingly focused on creating effective treatments, implants, and surgical techniques for the elderly patient. Patients presenting with back pain will also have increased incidence of comorbidities, which will present additional challenges to surgeons and the industry. However, great challenges are often accompanied by opportunity, and the aging spine is no exception. Surf’s up!