The Changing Landscape of ASCs: Cash Cow or Troubled Venture for Surgeons?
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1 The Changing Landscape of ASCs: Cash Cow or Troubled Venture for Surgeons? Richard D. Guyer, M.D. Chairman, Texas Back Institute RF Associate Clinical Professor UT Southwestern Medical School
2 Disclosures Guyer (a) Alphatec; (b) Spinal Kinetics, Spinal Ventures, Mimedix; (c) DePuy-Synthes Spine, K2M, Flexuspine, Mimedix, Aescalup; Safe Orthopedics (d) DePuy-Synthes Spine, K2M, Paradigm Spine Key: (a) royalties; (b) stock/options; (c) consulting/sab; (d) Speaker/ faculty; (e) Research; (f) Fellowship and related research; (g) other
3 Shift from Inpatient to Outpatient Increasing numbers of outpatient non-instrumented spine surgeries Increasing numbers of outpatient instrumented fusions ACDFs Posterior cervical fusions Lateral lumbar interbody fusions L5-S1 anterior lumbar interbody fusions TLIFs SI joint fusions Increasing lumbar MIS internal fixation instead of pedicle screws Increasing use of post-op rehab facilities and hotels
4 Inpatient to Outpatient Inpatient Charge Single Level ACDF Cervical Arthroplasty Implants $32,613 $29,500 Total Billed Charges Ave. Insurance Payment $68,000 $61,095 $48,960 $43,988 Outpatient Charge Single Level ACDF Cervical Arthroplasty Facility $28,636 $22,891 Implants $2,375 $8,125 Total Billed Charges Ave. Insurance Payment $31,011 $31,016 $14,500 $17,000 Average Co-pay $0 $0 Credit: Richard Wohns, Average of EOBs from Puget Sound Region Hospitals
5 Outpatient vs Inpatient ACDF 1000 consecutive patients underwent ACDF in an outpatient setting Complications occur at a low rate (1%) and can be appropriately diagnosed and managed in a 4-hour ASC PACU window Comparison with inpatient ACDF surgery cohort demonstrated similar results, highlighting that ACDF can be safely performed in the outpatient ambulatory surgery setting without compromising surgical safety. In an effort to decrease costs of care, surgeons can safely perform 1- and 2-level ACDFs in an ASC environment. Journal of Neurosurgery: Spine, Feb. 5, 2016
6 Outpatient vs Inpatient ACDF Outpt vs Inpt ACDF is associated w/ improved patient safety: analysis of 7,288 pts from NSQIP (National Surgical Quality Improvement Program) Database Prospective quality improvement registry representing more than 150 hospitals, 1-3 level ACDFs Outpt ACDFs had 58% lower odds of having major morbidity and 80% lower odds of a return to OR within 30 days The Spine Journal 14 (2014) IS-183S
7 Bundled Payments ASC Bundle Pro fee, technical fee, implant costs, anesthesia fee Medicare Bundled Payment Program CMS Pay for Performance initiative Surgeons directly control patients and receive all resulting savings Surgeons go at risk for DRG Bundles that are potentially profitable because surgeon is confident that he can complete care (90+ days after discharge) for a total $ amount lower than the Bundle provided
8 Spine Bundles Huge variation in spine surgery costs 196,918 patients with cervical or lumbar surgery, At least 2-yr pre-op and 90-day post-op follow-up data Significant variation between DRGs, ranging from $11,180 (30-day bundle, DRG 491) to $107,642 (30-day bundle, DRG 456) Significant cost variations Post-discharge care accounted for relative small portion of overall bundle costs (4%-89% in 90-day bundles) Total bundle costs remained relatively flat as bundle-length increased (total average cost of 30-day bundle $33,522 vs 90-day bundle, $35,165. Payments to hospitals accounted for the largest portion of bundle costs (76%) Spine, Vol. 39, Issue 15, July 1, 2014
9 ASC Bundles Orthopedic Surgery Center of Orange County Discectomy, laminectomy, laminotomy $14,225 2-level disc, laminectomy, laminotomy $16,200 1-level lumbar fusion and overnight stay $30,000 2-level lumbar fusion and overnight stay $38,000 Facet joint injection, cervical/thoracic (1-level) $ 2,100 Transforaminal epidural steroid, lumbar/sacral $ 2,100 Radiofrequency ablation, cervical $ 2,475
10 Success Rate >50% of hospitals that have tried bundled payments want to increase the number of procedures, care settings and partners including in the bundles 40% of hospitals reported savings of 5% or more >80% of hospitals w/ bundled experiences improved patient engagement, increased alignment w/ physicians and reduced administrative costs 60% of payers w/ bundles plan to expand their bundling efforts 57% of physicians say they will adopt bundles if their payers adopt them
11 ASCs Less expensive option for care Insurance companies will incentivize patients to use lower-cost ASC option CMS approved 10 new spine codes for ASC approvable list in 2017 Gives the surgeon owners a chance to control their destiny
12 Why ASCs Are Attractive to Surgeons Physicians who own their ASC: Are not at the mercy of hospital administration, often with decision makers in remote corporate office Select the equipment they want Hire staff members they want Set their own policies (within credentialing guidelines), i.e. run the place like it should be Can run more efficiently and can control costs better big box hospital administrators
13 Potential Disadvantages Increased responsibility Or less autonomy and lower profit margin if joint venturing with hospital, ASC management group, etc. Monitor for complications Control readmission rate Must be highly aware of ethical issues and potential changes in laws/regulations to remain compliant
14 Potential Disadvantages May not be able to get insurance contracts if not affiliated with a hospital system as out of network reimbursement slowly disappears May need to team with various facilities for patients to stay post-discharge and prior to returning home Step down units to Hotel rooms Including home health visits Still less expensive than hospital stay
15 Used cell phone app to monitor pts post-op Based on responses, blue, yellow, or red flag alert issued for nurse to contact patient 60 pts, monitored for 15 days post-op
16 App for Monitoring Post ASC Spine Surgery Example of screens used by pts VAS pain scale Bandage assessment Debono et al, Europ Spine J, 2016
17 Distribution of Alerts Received 29 alerts from 19 pts Most received 1-2 days after surgery No alerts received after day 8 Post-op day Blue flag: no response alert Yellow flag alert: VAS 5-8; fever C; painless voiding difficulty; blood stain not overflowing dressing Red flag alert: VAS 9-10; fever >39 C, painful voiding difficulty; new neuro deficit; blood stain overflowing the dressing Debono et al, Europ Spine J, 2016
18 Results of App Program 29 alarms from 19 pts: Post-op pain management and optimization of analgesics in 21 events Low-grade fever <38.5 o C in 4 cases Voiding delay in 2 cases Problem with surgical wound or dressing 2 cases All problems solved by nurses responding to alerts avoiding trips to ER or early office visit Debono et al, Europ Spine J, 2016
19 Barriers to ASC Spine Surgery are dissipating Originally, reactions to anesthesia, such as nausea, was one reason to admit pts to hospital No longer a problem for most pts Managing post-op pain was greater challenge yrs ago than now Less invasive surgery, better understanding of how to treat and newer techniques
20 2014;4: Survey sent to ISASS members 84.2% of respondents performed some manner of ambulatory spine 49.1% were investors in an ASC ASC investors more likely to perform procedures of increased complexity at ASC than noninvestors
21 Points of Concern from Survey Responses 8% of surgeons using ASC did not have mechanism for dealing with complications that could not be managed there 10.3% identified complications that could not be handled in their ASC Trend for investors to do more complex cases at ASCs may suggest that financial incentive plays role in the decision to perform procedures in ASC vs. hospital, where a patient may have better access to care should a post-op complication arise requiring emergent treatment Baird, Global Spine J, 2014
22 Partners in ASC Once investors own interests in an ambulatory surgery center, it is very difficult to force redemption without creating significant legal risk. Many ASCs eventually faced with problem of some partners not bringing in as many procedures as others, getting a free ride from higher producing partners This issue is a perfect set up for violating Antikickback Statute specifically prohibiting basing investment offering on volume or value of referrals Ware, JDSupra, 2017
23 Criteria for Outpatient Spine Surgery Must be within 30 min of a hospital BMI < 42 Pts with chronic illnesses must be cleared by family practitioner or specialist Pts with hx of heart disease must be cleared through cardiologist evaluation including echocardiogram and/or stress test Must have responsible adult staying with them for >24 hrs post-op Low to moderate anesthesia risks (ASA score 1 3) Chin et al, Clin Spine Surg, in press
24 Protocols: Post-Op Pain Control Patient education/expectations Instruction/meds Pain protocols Catheters Presidex Programmable pumps Post-op protocols Recovery Pain control after D/C Complications
25 Protocols: Patient Education Patient education Address possible concerns about going home too early Check that someone is available to provide / assist with care for several days Plan for post-op pain management Provide education to pt and care provider Bandages, when to call office or go to ER, etc.
26 Protocols: Discharge Discharge criteria should include: Stable vital signs Return to baseline orientation Return to baseline ambulation No dizziness Acceptable pain level Minimal bleeding at incision Not extremely nauseous or have other significantly uncomfortable condition
27 Be Prepared Must have a plan for the unexpected Emergencies occurring intra-op Transfers to hospital due to complications
28 Discussion Choose your partners carefully Implement safe, comprehensive and proven protocols Careful planning must be employed for: Legal/ethical compliance Structure of partnership Greater percentage of ownership the greater the risk How to address under-performing investors
29 The Future is Outpatient Surgery (ASC) and while it may not be a cash cow it can be a very profitable ancillary SG2 projected 22% increase in ASC services from 2010 to 2019 More than 50% of all spine surgeries can be safely performed outpatient Macroeconomic forces Outpatient is 30-60% less expensive than inpatient Clinical innovations Minimally invasive is more and more suited for ASCs Popularity with patients Outpatient leads to higher patient satisfaction Fewer complications including infections
30 Thank You
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