5 Challenges Facing Orthopedics in Surgery Centers and Best Practices to Overcome Them

Orthopedics is usually a breadwinner for surgery centers, but the specialty is facing a number of challenges that can reduce its profitability.

Here are five of the major challenges currently facing orthopedics in ASCs and some expert advice on how to overcome these obstacles.

1. Economy
As with most industries today, the state of the economy has a significant impact on orthopedics in surgery centers. A struggling stock market and the growing rate of unemployment have trickled down into healthcare.

As the economy continues to struggle, copays and deductibles on many patients' healthcare plans also continue to rise. This directly impacts orthopedics.

Marie Lee, surgical services administrator for the Ambulatory Surgery  Center at Northwest Health  in Springdale, Ark., has seen the effects first-hand.

"The economic downturn has postponed elective surgeries for many patients," she says.

Greg Roberts, MD, an orthopedic surgeon at Upper Cumberland Orthopaedic Surgery and Upper Cumberland Physicians Surgery Center in Cookeville, Tenn., also sees the effect of the economy on orthopedics.

"In our area we have seen a significant loss of industry," he says. "With these companies, many people are becoming uninsured or underinsured. Certainly this will put more pressure on the medical system as a whole but also lead to decreasing volumes and revenues."

Alan Davidson, executive director of the Orthopedic Institute of Pennsylvania in Camp Hill, says that this trend can lead to many patients not paying their copays at the time of their procedures.

Don Love, administrator of an orthopedic practice in Roanoke, Va., mentions several ways in which ASCs can better ensure payment from patients, including prescreening each patient's insurance benefits prior to the surgery to determine coverage eligibility and collecting copays at the time service is rendered. "It is important to help patients understand and be aware of what their copays and deductibles will be," he says.

Mr. Davidson agrees that increased attention to the workings of the revenue cycle will help combat this problem. "Staff must be trained to collect these payments at the time of service," he says. "Some insurance contracts provide obstacles to timely collection, and these clauses must be negotiated out of payor contracts."

Ken Austin, MD, an orthopedic surgeon in Airmont, N.Y., also notes that insurance companies can "place obstacles in the way of healthcare for both the patient and the practitioner." These obstacles include underpayments for procedures and excessive paperwork.

In addition, Dr. Austin notes that many patients have employers who constantly switch healthcare providers, and oftentimes the patients are not aware of what their requirements are as they change from plan to plan. "Insurers make it as difficult as possible for patients to understand," he says.

In the face of these economic troubles, a "quick-fix" solution to what seem to be mounting issues is not viable. Rather, many ASCs are working to ensure they maintain their standard of care as they weather the storm. "At present, we continue to strive to provide top-notch medical care as efficiently as possible," says Dr. Roberts.

2. Cost of implants
Another area of concern related to the economy for orthopedics in surgery centers, is implant costs and reimbursement for them, says Dr. Roberts.

"Many procedures that we could do well and probably save the patient and insurance company money — such as open reduction internal fixation of a distal radius fracture — are currently not possible at our center," he says. "Currently, Medicare and some other insurers will not pay for implants, only the center fee. Most of the time, the total payment is less than the cost of the implant, making these case impossible to do from a financial standpoint."

Expensive implants that surgeons want to use also can be a hindrance to profitable orthopedics. Sandy Berreth, administrator of the Brainerd Lakes Surgery Center in Baxter, Minn., sees this as a significant challenge for not only her center, but most centers.

Chris Metz, MD, an orthopedic surgeon at the Brainerd Lakes Surgery Center, agrees that centers should regularly consider and review what types of implants could be most cost-effective for the center. "New surgeons like to try the 'new and fancy' things," he says. "It is important to look at the benefits and prove that it is worth the expense. If it improves outcome (shorter recovery time, shorter surgery time), then it's worth it. If it's just like the ones that are already on the market, then you'd be hard pressed to make the change."

3. Compensation and disclosure
Recent reports in the media have shown that the industry and the government have become increasingly strict on surgeons receiving any type of compensation from device manufactures and drug companies. In addition, more and more companies are disclosing compensation information to the public.

As a result, it has become important for administrators and surgeons at centers to become and remain aware about what kinds of activities could fall under this umbrella.

Nancy Burden, director of BayCare Ambulatory Surgery Centers in Tampa Bay, Fla., says her ASC takes proactive approaches to minimize conflicts of interest.

"We are attentive to and concerned about compliance issues and legal requirements and the avoidance of any financial gain," she says. "For example, we might help the orthopedic surgeon plan a lecture and give ideas for advertising, but the surgeon would pay for any ads or fliers, not the ASC. Any assistance with an associated cost (such as providing a luncheon for meet and greet) fits into strict allowance guidelines and is documented and tracked."

In addition, Ms. Burden says that her ASC requires any physician in a leadership or decision-making role to sign an annual disclosure of any conflicts of interest. 

4. Scheduling
Keeping track of surgeons' schedules can often be a challenge for centers. In addition, finding a schedule that makes the most sense and is the most efficient is important for administrators and surgeons.

Ms. Lee suggests sitting down with surgeons to figure out their best schedules. "Collaborate with surgeons and establish block time or surgery days that promote productivity," she says. "We reviewed a surgeon's schedule — he changed his clinic days and we assigned him specific OR time, and ultimately he gained a half-day per week to see clinic patients, schedule additional surgery or add to family time."

Ms. Berreth also offers the following advice for administrators to help them determining an efficient schedule:

  • Scheduling should be monitored. "Procedure lengths should be based on experience, not on the orthopedic surgeon's memory," she says.
  • She suggests that centers not start the day with a large case (such as shoulder, ACL) as these types of cases require more time for prep work for anesthesia and often utilize regional blocks before the procedure. "Have the orthopedic surgeons working on smaller procedures that can start on-time, while the larger-procedure patient is being prepped," she says.
  • Start on time.  "Define the 'start time' with the surgeons, and keep them honest," she says. She suggests monitoring each doctor and showing them, in minutes, how much it costs the center when cases start late.

Dr. Metz notes the importance of having an efficient schedule. "We take it for granted," he says. "A good scheduler is a huge part of making sure that the center runs smoothly."

He also notes the importance of keeping turnaround time low. "We try to schedule all right-side procedures in a row, then all lefts," he says. "This is so you don't have to change all of the equipment from one side to the other between every procedure."

Dr. Roberts notes that his facility tries to schedule all-day block time for their surgeons rather than half day. "This allows us to achieve better flow to our schedule and decrease down time," he says. "We also try to arrange all cases with a C-arm need together to cut down on the X-ray time needed."

By taking the time to assess these issues, ASCs should find it easier to develop a schedule that works best for their centers.

5. Equipment
Finding the best kind of equipment at the best price can be a challenge for orthopedic practices. The surgery center setting lends itself to creating a situation where every surgeon may want to use a different product, but doing so can quickly drive up costs and reduce an ASC's ability to make bulk, discounted purchases.

"We got all of our orthopedic surgeons, as much as possible, to agree on the appropriate equipment and supplies," says Dr. Roberts. "We attempt to standardize equipment when possible, allowing better price negotiation."

Ms. Berreth says it is important to keep track of pricing. "All new products at our center meet agreed on pricing before they can be used and purchasing orders are issued," she says.

Additionally, Ms. Berreth suggests preventing one equipment challenge before the center faces it. "Although expensive at startup, you must have the right amount of equipment to be efficient," she says. "If your orthopedic surgeons are successful and have the expectation to do many cases in a day, the center should have equipment to facilitate how that will look. In other words, the faster turnovers are facilitated by the availability of equipment."

She also notes that most vendors are typically looking to sell their product at the best price. "Big institutions that purchase lots and lots often can purchase the same product for much less than a small surgery center; that is why group purchasing organizations are so important to the small ASCs," she says. "They provide purchasing power."

She also suggests appointing designated material managers. "They are worth every penny, and I try to tell mine that all the time," she says.

Contact Renée Tomcanin at renee@beckersasc.com.

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