Orthopedic groups scraped by under elective surgery bans: 6 industry insights


Under elective surgery restrictions, the average orthopedic practice didn't earn enough to cover expenses, according to survey results and calculations from the American Alliance of Orthopaedic Executives.

The alliance surveyed 100 member practices on March 30 about how they've been affected by bans on elective surgeries such as total joint replacements and spinal fusions. The sample represented about 10 percent of its membership.

Six takeaways:

1. Before March, practices averaged 700 elective surgeries per month. By April, the average dropped 61 percent, to 273 elective surgeries per month.

2. Members reported their average monthly elective case volume could plummet to 70 if the public health emergency lasts at least six months.

3. The median monthly revenue for orthopedic practices — including elective surgeries — is $441,366, the alliance's annual benchmarking survey found. On average, elective surgeries represent 73 percent of a practice's total volume, so the monthly revenue if practices must exclusively perform nonelective surgeries is about $119,169.

4. A 61 percent drop in elective surgery volumes means practices' estimated monthly revenue from elective surgeries decreased from $322,197 to $119,213. Therefore, elective surgery bans left orthopedic practices with an average monthly revenue of $238,382.

5. The remaining average monthly revenue falls just shy of the median monthly total expenses reported by orthopedic practices, which is $256,247. All other things equal at the start of the pandemic, "Orthopedic practices were earning just under what it takes to cover expenses," the alliance concluded.

6. Orthopedic practices had an average workforce of 179 employees pre-COVID-19. That decreased 22 percent by late March, to an average of 139 employees. The changes "have likely increased since, as the scale and scope of the virus and its economic fallout continues to evolve," the alliance said.

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