Financial

Orthopedic surgeons should lead the process of bundled payment initiatives

During the next decade, The Advisory Board Company projects increases in both inpatient and outpatient orthopedic care. Knee and hip replacements will continue to lead the growth of inpatient procedures. Furthermore, due to modern anesthesia techniques and increased sophistication of patient care in an ambulatory setting, a transformation is underway, which will drive more than half of these procedures into an outpatient setting in time.

Many forces have affected the expansion of orthopedic care — aging population, increasing rates of osteoarthritis, comorbidities such as smoking, diabetes and obesity, more revision procedures and continued innovation of medical devices and techniques. With the predicted increases in the number of people age 65 years or older, the overall expenditures for orthopedic care will continue to increase dramatically and, as such, have become targets for ways to reduce health care spending. Arguably, most current methods have not controlled costs and the value of care is not well defined.

Comprehensive orthopedic care

Many components, including the surgeon, hospital, implants, OR equipment, anesthesia and rehabilitation, comprise the resources needed to provide each episode of comprehensive orthopedic care. Each member of the team has a vested interested in the care of patients and provides services and creates expenditures specific to various components of the episode of care.

CMS recently required hospitals in 75 geographic areas to participate in the Bundled Payment for Care Improvement (BPCI) initiative. Hospitals, physician groups and others are transitioning from a preparatory period to a risk-bearing implementation period in which they assume financial risk. For bundled payments related to joint arthroplasty, there must be a a relationship between the hospital administrators and the orthopedic surgeons organizing and providing care. This is already in place at academic medical centers with the employed-physician model. However, more than 75% of all total joint replacements are performed at non-academic community hospitals by low- to mid-volume joint replacement orthopedic surgeons who typically do not have close working relationships with their hospital management, including financial data, which is necessary to have a fair process for developing a bundled payment that assumes shared risk and potential shared benefit.

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