1. Bundled charges will be a big draw for hospitals. More payors, both federal programs and commercial payors, are leaning towards bundling charges as opposed to paying for single services. In this process, a payor will pay a single base charge for a single procedure and not pay separate fees to the facility or the surgeon.
According to Bob Kahn, CEO of Orthopedic Specialists of Texarkana (Texas), this trend will have a huge impact on how orthopedic and spine departments are managed. “Payors want more control over how healthcare providers are paid for their services, and this process has been growing and evolving over many years. Bundled charges appeal to payors because they only have to pay a single charge, and then it is up to the facility to handle the rest,” he says.
Mr. Kahn notes that payors want to be able to have a definable charge, which can be amended should complications arise. “It’s similar to when you go to McDonald’s. You know what the base price is for your value meal, but if you want to add on or super-size, you can see what those charges are,” he says.
This trend means that more payors will look to arrange contracts with hospitals, which can better negotiate these arrangements than private orthopedic and spine practices. However, Mr. Kahn says complications may arise when determining who will be paid what percentage of the bill. Physicians who are employed by hospitals will more than likely see these payments as part of their annual salaries. Physicians who are in private practice may have to work out additional arrangements with hospitals moving forward, Mr. Kahn says.
2. Hospitals will continue to develop Centers of Excellence. Centers of Excellence distinctions are important for hospitals, especially when it comes to orthopedic and spine service lines. The distinction can help hospitals negotiate better payor rates and allow hospitals to better market their services and physicians to the outside community. Recently, the Blue Cross Blue Shield Association extended its Blue Distinction program to include spine surgery and knee and hip replacement services.
Mr. Kahn says, “It is easier to market the entire Center of Excellence as opposed to a physician group or individual physician. Hospitals will need to focus on drawing in traffic from outside areas, especially as the number of orthopedic surgeons is decreasing, leading to orthopedics becoming more centralized than it has been in the past. Therefore, patients will have to travel to see an orthopedic specialist and will be more likely to shop around before coming to a hospital or a surgery center for care.”
Hospitals may also be able to use a Center of Excellence to better negotiate bundled rates with payors, according to Mr. Kahn.
The establishment of these Centers of Excellence will also encourage hospitals to focus on quality, efficiency and patient safety within the hospital and can be a great opportunity for private practice physicians to maintain some autonomy while partnering with a hospital.
Central Maine Orthopedics in Auburn, Maine, recently partnered with Central Maine Medical Center to create the Orthopaedic Institute of Central Maine, a hospital within a hospital. The orthopedic group is able to help the hospital improve its orthopedic profile and in return has been able to use some of the hospital’s resources to improve the practice’s marketing efforts, while maintaining its status as an independent orthopedic group. Additionally, practices can take advantage of the hospital’s access to updated technology, including surgical and imaging devices.
3. Changes are needed to ensure new orthopedic surgeons are well-trained to handle increasing demand. Hospitals, surgery centers and private practices have raised concerns over the potential shortage of orthopedic specialists as demand for orthopedic services increases. Aging Baby Boomers and the growing numbers of elderly patients who wish to remain active will continue to drive the demand for orthopedic services and the need for qualified orthopedists will continue.
According to data from the Department of Health and Human Services’ Health Resources and Services Administration, around 26,320 orthopedic surgeons were projected to be in practice in 2010, 980 short of the projected baseline requirement of 27,300 surgeons. With the increase in the elderly population, the demand for orthopedic surgeons may reach 31,600 in 2020 — an increase of 23 percent from 2005-2020 — while the agency is projecting only 26,630 surgeons to be in practice by then, an increase of only 3 percent from 2005-2020.
Healthcare facilities have, as a result, been concerned with how current orthopedic residents are trained and what the generational shift may mean for how care is delivered.
A recent report in the Journal of Bone and Joint Surgery showed that the heads of 17 of the country’s leading orthopedic training programs believe changes are needed to training programs so orthopedic residents are better prepared for these demands. Work-hour restrictions, generational and gender differences were listed among the major concerns. For example, residents can work no more than 24 hours and must have one day off in seven, which some say limit the scope of treatment they are permitted to provide to patients. Additionally, residents today balance training with family life and more extra activities than their mentors, according to the report.
As a result, hospitals, surgery centers and practices are creating initiatives to address this generational shift, which may indicate why more new orthopedic surgeons are looking for employment by hospitals or other corporations.
“Younger orthopedic surgeons are trained to be part of a team and are looking to work within an institutional setting,” Mr. Kahn says. “They are used to a digital environment, opposed to older physicians, and hospitals and larger orthopedic groups are the ones who have the funds for the technology and the team environment they are looking for.”
4. Spine and more complex procedures are moving toward the outpatient setting. Spine surgery continues to be of interest for surgery centers as it can be an excellent way for ASCs to grow their centers. New technologies and more minimally invasive surgeries have led to more spine procedures approved for the hospital outpatient department and ASC settings.
According to a Sept. 2009 report from Accelero Health Partners, outpatient spine surgery increased 10 percent from 2002-2008, with a 2 percent decrease in inpatient back and neck non-fusion surgeries. In comparison, outpatient cervical fusion procedures increased 4 percent in the same time period.
Mr. Kahn agrees with this outlook. “We’ve seen more outpatient procedures [across our services] and more complexity in the type of cases that are performed in the outpatient setting. This means greater usage and strain on the post-op observation areas as the number of 23-hour stays [due to the complexity of the cases],” he says.
