Implant costs are a burden for many ASCs, and many feel ASCs have irreparably shifted the implant industry.
Here are five ASC leaders and their thoughts on implant-ASC relationships:
Andrew Lovewell. Administrator at Surgical Center at Columbia (Mo.) Orthopaedic Group: Commercial contracts have to be well constructed to ensure that hardware and implants are being paid on all of those extremely complex procedures. In the world of CMS total joint arthroplasty within an ASC, implant costs mean everything. At some point, many administrators and surgeons may feel that there is a race to the bottom, and that simply can't happen. ASCs were designed to be a streamlined healthcare delivery model, but there is still an inherent cost of doing business.
Mark Kerner, MD. Surgeon at Hampton Roads Orthopaedics Spine and Sports Medicine (Newport News, Va.): The pandemic has accelerated the disruptive change ASCs are having on the implant and technology industry. In the world of ASCs, many physicians are owners, so they are incentivized to put a premium on efficiency. They have little desire to pay for technology where classic techniques can be used without it — that puts the physician on the other side of the negotiating table from industry. The incentive is low tech, low cost, which disrupts the sales paradigm that has built the implant industry and was formative to the careers of the sales force in it.
An industry that is conditioned to huge profit margins is going to face a race to the bottom for prices. Like any mature industry, economies of scale will begin to be meaningful. Only the larger and efficient will remain profitable at the new price points.
Brian Bizub. CEO of Raleigh (N.C.) Orthopaedic: The biggest challenge is with every move of an inpatient surgical case to the ASC is a substantial reduction in reimbursement, leaving little to no margin for profit unless the government engages in equipment, instrumentation, supply chain and implant costs similar to CMS' competitive bidding process on durable medical equipment and average sales price for medications.
Barbara Bergin, MD. Orthopedic Surgeon at Texas Orthopedics, Sports & Rehabilitation Associates (Austin): Now it's looking like a total joint replacement is going to be done more and more in the ASC setting, especially on healthy patients who are not on Medicare. Medicare may have said they're going to allow surgery in the ASC setting, but the amount that they pay is so little that it barely covers the cost of the implant and the other equipment that's necessary to perform the surgery. So I think it's going to be a little while before Medicare patients will be done in an outpatient setting.
Devin Datta, MD. Orthopedic surgeon at the BACK Center (Melbourne, Fla.): The biggest challenge ASCs will face with payers in the coming years will be dealing with implant reimbursement and showing insurance carriers the value ambulatory surgery provides for both patients and insurers.