Achieving Super-Outcomes Without Super-Costs: Reducing Orthopedic Surgery Costs and Improving Care in Managed Care Environment

January 30, 2020

Tara Vail is the Chief Operating Officer of HST Pathways and serves on the Board of the California Ambulatory Surgery Association.

On Sunday, February 2, millions of fans will tune into professional football’s annual mega-clash — Super Bowl LIV in Miami, FL. Drawn by the athleticism of the game, fans cheer for the teams and their players who demonstrate remarkable feats of strength, fitness, and agility.

Yet after a grueling schedule of 4 preseason games, 16 regular season games, and up to 3 playoff games, injuries inevitably take their toll on seasoned gridiron warriors. Shoulder, back, and knee injuries are as painful as “L’s” in the LOSS column. Many of these sports injuries will require corrective surgery in the offseason.

For professionals in managed care, the Super Bowl is an opportunity to reflect on winning strategies for 2020, particularly how we add a “W” to the WIN column for managing orthopedic injuries and reducing costs.

According to a 2019 review of medical claims data from 2010-2017 by the Blue Cross Blue Shield Association (BCBSA), knee replacements are up by 17% and hip replacements are up 33%. The same report also found that elective orthopedic procedures for commercially insured adult BCBS members cost approximately $25 billion in 2017, accounting for about 47% of total orthopedic care spending by the plan (an increase of 44% since 2010). With an aging population battling increasing joint problems, we can expect continued growth orthopedic costs and care.

As patient cases and cost containment pressure increases, here are 5 practical approaches that ambulatory surgery centers (ASCs) can adopt to improve cost and care management.

Take the pre-op prep online

Many managed care organizations strive for an era when more orthopedic procedures such as joint replacements are completed as an outpatient procedure. In order to maximize operating room time, pre-op tasks can be completed online by the patient and the admissions team in advance of arriving at the ASC or in the waiting room. Online pre-registration / pre-op assessment collects patient history, current insurance, consent forms, and other necessities in advance via a computer or device at home, take away the time required when patients must complete the forms onsite. Completing paperwork online also enables the patient to be directly connected to pre-op patient interaction and care, since surgeons and administrators can review and clear their paperwork prior to the patient’s arrival.

Identify and purposefully manage the small costs in orthopedic procedures

Managed care organizations can examine cost and treatment records to weed out unnecessary surgery supply costs. In a 2017 study, cost feedback to surgeons combined with a small departmental financial incentive was associated with significantly reduced surgical supply costs, without negatively affecting patient outcomes. Tracking and monitoring costs for items such as surgical tubing, needles, sutures, suction tips, retractors, and laparoscopic instruments can help reduce direct costs. (A 2016 study found that sponge gauzes, gloves and OR towels are the most wasted items). Tracking the costs electronically can help care teams make corrections or substitutions that add up to big savings without reducing care quality or impacting patient outcomes.

Keep a close watch on revenue capture and reimbursement for implants

Implants for orthopedic procedures can be very costly. As a result, payors will carve out implants in contracts and reimburse them separately and in addition to the cost of the procedure. Many managed care organizations examine cost and treatment records but fail to comply with implant contracts to ensure all services are billed correctly and submitted in alignment with payor requirements. Ensuring the physician’s operative note clearly states the implants used, and accurate data entered at the time of charge entry is critical to recouping the cost for the procedure. In addition to revenue capture, a systematic method of checks in balances is essential to ensuring payers reimburse according to the contract. Tracking the contract payment processes electronically can act as a second pair of eyes in the event that a typo or manual error is made.

Maximize Software Capabilities for Predictive Analytics

In the future, healthcare will increasingly rely on predictive analytics estimating the likelihood of a future outcome based on patterns in historical data. ASCs will increasingly use software for more complex tasks such as risk scoring, readmissions, curbing no-shows, and managing the supply chain. In orthopedics, predictive analytics could help forecast implant needs for upcoming procedures to reduce overnight shipping costs and trends for quality outcomes.

Use Data and Up-to-Date Software for Health System Alignment

Most health systems and ASCs are trying to reach interoperability requirements. ASCs, hospitals, and in managed care settings that strive for alignment are better able to enjoy the benefits of their health information system. This includes receiving alerts in real time and reducing the need for duplicate data entry, accessing data that can display check lists and decrease errors. Using up-to-date software also speeds up access to data as well as reduces paper use and chart storage needs. Digital tools also allow ASCs to gather clinical data for research, quality assurance, and compliance reports. ASCs can also use automated tools increase regulatory compliance by checking for chart completion. Revenue cycle management tools can aid in tracking contractual variances between expected versus received payments and overall procedure costs comparison by physicians on implants and supplies.

No football team goes into the Big Game without a game plan. A winning team understands its strategy to reduce risks, plays defense to guard against weaknesses, and initiates plays that leverage the strength of the entire team. Similarly, ASCs should move into 2020 with a clear game plan on how to use its team members most effectively, utilize digital tools fully, and strategically pursue ways to reduce costs and improve efficiencies. The growing number of orthopedic surgery patients represents a clear playing field on which to execute these strategies, with the ultimate goal of consistently delivering high quality patient care.