The growth of outpatient spine — 9 Key Points

Written by Scott Becker and Megan Wood | February 03, 2016 | Print  |

The last 10 years have seen an immense growth in outpatient spine. This article briefly discusses some of the challenges, thoughts and observations on this growth.  The growth has been driven by several top line factors including (1) surgeons becoming much more comfortable with outpatient spine including younger surgeons initially training up with outpatient spine; (2) patients becoming less scared of outpatient spine surgery and more concerned regarding hospital based infections; and (3) payers becoming more willing to allow spine cases to move from hospitals to ASCs.  There remains pushback from payers as to the amount of spine surgeries in total and from hospitals as to the movement of surgeries out of hospitals.

1. From 2005 to 2015, there has been a movement to a place where nearly 45 percent of all spine cases done on an outpatient basis. This compares to approximately 5 percent in 2005, according to the Society for Ambulatory Spine surgery.


2. The total number of spine cases per year is nearly 650,000 to 700,000. Of these, approximately 280,000 to 300,000 are done on an outpatient basis. [Lumbar decompression and anterior cervical fusions, for example, are most commonly performed in the outpatient setting.]


3. The drivers of outpatient spine include several different factors. These include (1) lower cost per case in an outpatient setting; (2) improved technology; (3) younger doctors who grew up on outpatient spine immediately out of (or in) their residencies and fellowships; (4) patient preferences for performing surgeries where they are in and out; (5) significant improvements in anesthesia; and (7) great improvements in postsurgical pain management.


According to data published by NeoSpine founder Richard Wohns, MD, outpatient single-level cervical discectomy and fusion, average facility fee for the ambulatory surgery center is $28,365. The implants cost $1,800 and total bills charged are around $30,165. The average insurance payment is $11,065 and average patient copay was $1,122.


4. Medicare also has been a newer driver of outpatient spine. Recently, in 2014 and effective in 2015, Medicare approved nine different codes that could be used for outpatient spine procedures in the surgery center. This was the first time this was done.


The nine new procedure codes on the ASC payable list in 2015 include:

 

  1. [Neck spine fuse & remov bel c2 (22551)]
  2. Neck spine fusion (22554)
  3. Lumbar spine fusion (22612)
  4. Neck spine disc surgery (63020)
  5. Low back disc surgery (63030)
  6. Laminectomy single lumbar (63042)
  7. Removal of spinal lamina (63045)
  8. Removal of spinal lamina (63047)
  9. Decompression spinal cord (63056)


5. Payers have been very ambivalent about outpatient spine in surgery centers. This has often been due to the fact that hospitals fought very hard with payers to keep those cases at hospitals. Thus, there has been some reluctance for spine surgeons to push hard to move cases to surgery centers. More recently, we have seen some of these payers relent. For example, one surgery center that was cut off from outpatient spine for years finally signed a contract with a Blue Cross entity that will now allow them to do a great deal of the cases in the surgery center. This reflects a significant change from years ago.


6. There are also a great number of spine practices and spine surgery centers that are doing business on a cash or out-of-network basis. The patient may still bill the payer for reimbursement. However, on the upfront situation, the surgery center accepts cash or out-of-network. This has been a model for success in several different practices and centers.


The Orthopedic Surgery Center of Orange County in Newport Beach, Calif., for example, practices price transparency by listing all-inclusive prices for 54 procedures, including six spine procedures. The charges include:

 

  • Minimally invasive discectomy, laminectomy, laminotomy: $14,225
  • Two-level MIS discectomy, laminectomy, laminotomy: $16,200
  • Single-level MIS lumbar fusion with overnight stay: $30,000
  • Two-level MIS lumbar fusion with overnight stay: $38,000
  • MIS discectomy and/or fusion with overnight stay: $31,500

 

7. Another interesting statistic about outpatient spine relates to the fact that it's estimated that inpatient costs are approximately five times those of outpatient costs. A study published in Surgical Neurology International reports outpatient single-level cervical disc arthroplasty was 84 percent less than inpatient cervical disc arthroplasty and 62 percent less expensive than outpatient single-level cervical anterior discectomy with fusion using allograft and plate.


Thus, there has also been great movement driven by the difference in cost to doing procedures in surgery centers versus hospitals.


8. Finally, surgeons have a great ability to be the leaders in projects and bundles. They need enough infrastructure and strength to be able to lead on such projects. Spine surgery costs drastically vary, which impacts spine-focused bundled payments. A 2014 study published in Spine reported 30-day bundles range from $11,180 to $107,642. The post-discharge care accounted for 4 percent to 8 percent of the overall costs in 90-day bundles. The largest portion of the bundled cost were hospital payments; 76 percent of the bundle went toward hospital payments on average. Bundled payments are beginning to catch on among large companies as well. Wal-Mart established bundled payments for six specialties, including spinal surgery, in 2013.  


As to bundled payments, the surgeon has (1) great control over implants; (2) the time spent in the operating room; (3) time under anesthesia; (4) length of stay; and (5) recovery time. Thus the surgeons are in a great spot to engineer the actual savings and cost-savings of doing a case in a surgery center versus in a hospital or elsewhere. The surgeons are also in a great place to be in charge of the evolution of the management of the total cost of the procedure.


9. Outpatient spine is also growing due to the evolution in recovery care settings. More and more states are more flexible about allowing patients to go home or go to a different venue for recovery care time. It is not so much that payers are increasingly paying for those. Often they are paid for out of the surgery center bundle or the surgeons' bundle. However, more and more states are more permissive about a patient being released to a hotel, a home or some other place where they will have postsurgical care.


The state of Florida is one example of the expanding legislation. Legislators have attempted multiple times over the past few years to extend surgery center patient stays. Earlier this year, bills in the Florida House and Senate were introduced to allow ASCs to keep patients up to 24 hours as well as 72 hour stays at recovery care centers.

 

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