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High Costs With Total Shoulder Arthroplasty? Consider Bundling!

by Elizabeth Hofheinz, M.P.H., M.Ed.

With total shoulder arthroplasty (TSA) on the rise, say the authors of a new study, so is the need to find ways to decrease the associated costs. So what do you get with one surgeon, one ASC (ambulatory surgery center), and a line-by-line comparison of demographic and comorbidity factors? A detailed economic analysis.

Thomas (Quin) Throckmorton, M.D. is Professor of Shoulder and Elbow Surgery at the University of Tennessee-Campbell Clinic in Memphis, Tennessee. Along with colleagues from the University of Tennessee Health Science Center, Dr. Throckmorton looked at data from all patients undergoing a primary anatomic TSA at a freestanding ambulatory surgical center owned by a private orthopaedic practice (76 TSAs: 39 in the bundled group and 37 outside the group). Their work, “Bundled Payment Plans Are Associated With Notable Cost Savings for Ambulatory Outpatient Total Shoulder Arthroplasty,” was published in the October 1, 2020 edition of the Journal of the American Academy of Orthopaedic Surgeons.

Dr. Throckmorton told OSN, “The movement toward value-based care in orthopaedics has driven total joint arthroplasty to the outpatient setting, often in ambulatory surgery centers (ASCs). Concurrently, attempts by CMS to create cost reductions in total joint replacement led to the evolution of hospital-based bundled payment programs such as BPCI [Bundled Payments for Care Initiative] and CJR [Comprehensive Care for Joint Replacement]. While outpatient TSA has been shown to be safe with high patient satisfaction, less was known about the potential cost reductions created by moving the operation to the ASC environment. As a result, we sought to determine the effect of a private insurance carve out (i.e., bundle) program on costs in outpatient total shoulder replacement.”

“The average total implant charges were significantly less for the bundled group ($24,822.43 versus $28,405.51),” wrote the authors. “Average total surgery supply charges and anesthesia supply charges were similar. Mean total outpatient surgical day charges (implants, surgical, and anesthesia equipment) were significantly less for the bundled group ($29,782.43 versus $33,238.68), as were average operating room staffing costs ($135.37 versus $162.55).”

“After outpatient shoulder replacements were placed under the carve out program, substantial cost savings were realized compared to unbundled outpatient TSA,” said Dr. Throckmorton. “The primary driver of the reduced costs relative to unbundled outpatient TSA was more competitive implant pricing which was negotiated as part of the carve out process.”

Asked what sort of unique practices might cause costs to vary, Dr. Throckmorton told OSN, “With implant prices being the primary variable driving savings, costs are most likely to vary in accordance with the type of implants used as well as the negotiating power of the hospital or ASC. Shoulder replacement numbers in the US, while increasing rapidly, are still dwarfed by total hip and total knee arthroplasty. Therefore, an outpatient total joint replacement program likely requires a substantial hip and knee component in order to have sufficient leverage in order to maximize implant pricing. Further, a coordinated approach to implant price negotiation where surgeons agree on appropriate prosthetic requirements and pathways can also assist in cost reductions.”

Josh Sandberg

Josh Sandberg is the President and CEO of Ortho Spine Partners and sits on several company and industry related Boards. He also is the Creator and Editor of OrthoSpineNews.

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