Bundled Payments, Prosthesis Cost and Private Practice: Listen Up - - PowerPoint PPT Presentation

Bundled Payments, Prosthesis Cost and Private Practice: Listen Up to Protect Yourself!

Michael P . Ast, MD

Director, Outpatient Joint Replacement Program Mercer County Surgery Center Director, Robotic Joint Replacement Program RWJ-Barnabas University Hospital- Hamilton

Disclosures

• I have no relevant disclosures for this

talk

Bundled Payments

• We are all a little sick of hearing about

them

• Future is unknown

– Likely hear to stay in some fashion

• Mean very different things to academic

and private surgeons

Implant room

Implant stock

Equipment storage

My hospital implant room

My hospital equipment stock

Bundles in the Literature

• Literature often talks about complex

programs to be developed

– Navigators – NPs in ED to prevent readmissions – Additional FTEs on floor to accelerate

discharge

– Hiring evening physical therapists to

increase POD#0 evals

Bundles in the “Real World”

• Hard to get small hospitals on board

with any expenditure

– Even with proven long term savings

• Hard to get multiple competing

surgeons on the same page

• Need simple quick solutions

Where are the Savings?

• JAMA Intern Med 2017
• Navathe et al

– Savings in a bundle

• Implant Prices
• Post-Acute Care Setting
• Focusing on these are the simplest start

Implant Pricing

• Several studies have shown dramatic

variation in costs of TJR in the US

• Implant costs are a large driver of

variation

• Some hospitals spend 2x as much on

implants as others

Haas et al. J Arthroplasty 2017 Haas et al. Arthroplasty Today 2017 Bosco et al. J Arthroplasty 2014

How to address this?

Implant Pricing

• The simplest way to quickly reduce

costs in a bundle

– Can reduce costs by up to 29%

• f total

costs

• Several proposed methods

JAMA Intern Med 2017

Basic Negotiating

• “Flea Market

Bargaining”

• Usually done on

hospital side only

• No input from

surgeons

• Usually unsuccessful

Single Vendor

• A favorite of implant companies and

hospital administrators

• Contract based on guaranteeing a

certain percentage of volume (80-90% )

• Costs generally about 20%

higher than maintaining competition

Haas et al. J Arthroplasty 2017

Physician Committee Shelf Pricing

• Collaboration between surgeons and

hospitals to decrease implant pricing

• Takes trust and work on both sides
• Hospitals must make real effort to

negotiate and treat everyone honestly

• Surgeons must stick to their side of the

bargain

Shelf Pricing

• A fair price is determined
• All implants that meet this price can be

used without question

• Any implant that cannot meet this price

will no longer be used

• Surgeons must be willing to walk away

from their implant for a few cases

– Companies will always come back to the

table

Shelf Pricing

• Often does not include revisions
• May consider demand matching for

certain “premium” implants

– Surgeons set criteria for certain implants

• Can be based on age, activity level, etc
• Must always be room for special

circumstances

Savings

• These should be shared as much as

possible

• If direct payment to surgeons can’t be

made

– Ensure money goes to Joint Center – Hire Nurse Navigator – Improvements on the floor or PT gym – Should NOT offset other hospital budget

shortfalls

Thank you!