Finding success under a joint replacement bundled payment program in an ASC

As more ambulatory surgery centers are trying their hand at joint replacement surgery, the potential benefits of a bundled payment program prove alluring.

During a panel titled, "Save your OR: A proven model for succeeding under bundled payment for joint replacement surgery," Jeffry Peters, president of Chicago-based Surgical Directions, offered proven strategies for ASC success within a bundle. Joseph Bosco, MD, an orthopedic surgeon at New York University Langone Medical Center, concluded the presentation by offering key insights into reducing operating room time to drive value and lower costs.

The panel took place at Becker's ASC 23rd Annual Meeting: The Business and Operations of ASCs in Chicago from Oct. 27 to Oct 29.

"As healthcare providers, as we look at bundles, and we're looking at outcomes, what we really have to pay attention to, is what's important to the patient, because ultimately, that's how we're going to get reimbursed," said Mr. Peters.

Defining value
As the healthcare industry moves forward into value-based care, patient satisfaction will play a pivotal role in defining value. Mr. Peters stresses successful providers will pay attention to the elements important to the patient.

"When we're looking at value, it's not just the outcomes we've historically measured, it's how the patients feel about their lifestyle," he added. Value equals outcomes divided by costs, but when cutting costs, outcomes can't be cut as well.

To survive in this increasingly competitive arena, Mr. Peters noted facilities must not just deliver high quality, but achieve high volume as well.

The government has witnessed the most success with bundled payments in surgery, zoning in on joints, as they represent the largest volume of surgeries nationally.

"The procedure [for joints] is one of the most easily adaptive in moving from a hospital setting to an ambulatory setting because of the improvements in pain control," added Mr. Peters.

The bundle timeline extends from 72 hours pre-surgery to 90 days post-surgery.

"If you're looking at a strategic growth opportunity for your ASC, this is it," said Mr. Peters.

As for the target price, facilities should focus on their costs as compared to others within their market, as regional pricing and regional outcomes will drive key metrics. At the end of the year, CMS will compare actual episode of spending to the target price. If a center's spending is less than the target and it also meets clinical metrics, it will receive reconciliation.

"It requires us to do a lot more follow up and research, because if there's a problem, we want to know it before the payers do," said Mr. Peters.

He notes the real advantage of a bundled payment is the opportunity for gain sharing. If metrics are met, 50 percent of the procedure may be paid as a gain-sharing payment to the surgeon.

"I think ASCs, typically, are more entrepreneurial and more comfortable with [gain-sharing], but if you're in a market where the hospital isn't comfortable with gain-sharing, part of your way to attract market share and volume is putting in a gain-sharing component as part of your program at an ASC," Mr. Peters suggested.

Keys to success
When it comes to success under a bundled payment model, Mr. Peters highlighted surgeon education, metrics, physician leadership, pre-anesthesia testing, anesthesia, information and case time as key components.

He noted about 80 percent of surgeons will grasp and accept the concept of bundled payment during the first discussion, while 20 percent of physicians will drag their heels. Therefore, strong physician leadership is crucial to persuade outlier physicians to jump on board.

In order to inspire support among speculative surgeons, present them with clinical, financial and patient satisfaction metrics and data.

Some clinical metrics include: length of stay; inpatient/same-day joints; discharge; surgical site infection; post-surgical deep venous thrombosis cardiac event; and readmission rates.

"We, as ASCs, have to develop those mechanisms to follow [those metrics], because if you're not getting the best practice metrics, you could be under the target price, but you're not going to get the reconciliation," Mr. Peters said.

From a financial perspective, gather data on each surgeon's cost of care; joint implant costs; supply costs; and imaging studies.

When analyzing patient satisfaction, zone in on surgical episodes and functionality. Mr. Peters emphasized patient satisfaction must be measured long-term, not just immediately post-surgery.

"Compare [a surgeon's] practice to their peers within the same institution. You want to focus on the outliers," said Mr. Peters.

ASCs should also analyze their clinical pathways in the operating room and central sterile processing, identifying pre-operation preparation and administered drugs during surgery. Patient selection is also critical to a center's success, as it makes or breaks an outcome.

"We can't say enough about the importance of anesthesia driving the process," said Mr. Peters. "Coming up with the testing protocols; deciding who we'll do [and] whom we won't do; the risk factors..."

Reducing OR time
Operating rooms are a huge capital investment, and Dr. Bosco noted efficiently using an OR would reduce costs and drive value.

He recommended centers parse down their case times to the second. Case time begins when the patient enters the OR and ends when the patient exits, with the anesthesia ready; incision; and incision close time fragments sitting in between.

"Each set of these times is owned by a different set of people," explained Dr. Bosco. He suggested centers map out their case times to identify ways to speed up the process.

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