Orthopedic Services in Post-COVID-19 Healthcare

What’s Ahead for Hospitals and Orthopedists

More than half of all adults and three quarters of those age 65 and older in the U.S. suffer from a musculoskeletal disease, making it one of the top reasons patients seek help from hospitals, doctors, and allied health professionals. However, as the world reacted to the spread of COVID-19, many patients were unable to receive (or delayed) needed care. Today, with the pandemic still a reality, healthcare providers across the U.S. are responding to pent up demand and, where allowed, performing elective surgeries. In the midst of the challenges, health systems and physician groups are responding to five trends that have shaped orthopedic care in the U.S. in recent years.

Trends That Impact Orthopedic Care

1. HIGHER DEMAND FOR ORTHOPEDIC SURGERY AND ADJUNCT SERVICES

As the U.S. population ages, it is also getting heavier. This combination means demand in orthopedics will grow for the next two decades in the U.S., especially in outpatient settings. In tandem, public interest in health and wellbeing, the prevalence of chronic diseases, and decrease in physical activity are offering opportunities for orthopedic services beyond the procedures they perform. Looking ahead, the demand from younger patients, plus opportunities in rehab, physical therapy, functional wellbeing, arthritis and workplace health will expand the orthopedic market with supplementary services in addition to growing surgical procedures.

2. CLINICAL INNOVATIONS THAT IMPROVE CLINICAL PROCESSES, INCREASE EFFICIENCY AND SHIFT SERVICES TO OUTPATIENT SETTINGS

Orthopedics is a hotbed for clinical innovation. Evidence-based innovations traverse the continuum of orthopedic services for spine, upper extremities (shoulder, elbow, wrists, and fingers) and lower extremities (foot and ankle devices). Examples include: orthobiologics, augmented reality, virtual reality, smart implants, composite tissue allograft, computer assisted surgery, bone allographic grafting, 3D printing for implant production, and more. In tandem, administrative process improvements have been integrated into scheduling. This has led to reduced cancellation rates and pain management.

The combined impact of these innovations has been a shift of surgical cases to outpatient settings. In the past five years, orthopedic outpatient procedures have increased by more than 25 percent while inpatient procedures have decreased by 3 percent. Looking ahead, this trend is likely to continue as ambulatory surgery centers and clinics become the predominant sites for care. Orthopedic services will also extend to workplaces, schools and homes to leverage health monitoring devices and digital connectivity. Facility modernization to foster a bricks and clicks model will thus be a major differentiator for orthopedic providers.

3. INCREASED PRESSURE FROM PAYERS TO CONTROL COSTS

Private insurers and large employers pay close attention to orthopedics. Demand for orthopedic services in the working age population is significant. As the cost is closely monitored in turn, several considerations include:

Medicare launched the Comprehensive Care for Joint Replacement (CCJR) program in 2016 as part of its Bundled Payment program (BPCI). Forty-one percent of orthopedic surgeons have participated to date, saving Medicare $1,166 per case. Last month, the Centers for Medicare & Medicaid Services (CMS) announced it would reimburse total joint procedures in outpatient surgery settings—additional evidence of CMS selective attention to orthopedics. It will save Medicare $935 per case and improve margins for ASC operators by 26 percent due to lower costs for nursing care, PACU and drug therapies in outpatient settings.
Major employers like Walmart, Boeing, Loews and others have negotiated carve-outs with provider organizations for spine surgery, total joints and other procedures. In most cases, these employers negotiate for a bundled payment rate that is based on a reference price and guarantee of outcomes. They do so to save money on health costs for their employees and dependents. For example, Walmart saved $32,000 per case on its spine surgeries by carving out its coverage with high-performing networks of providers. The result after three years: 54 percent of surgical cases were avoided via alternative treatments and 46 percent had surgery.

4. INTENSIFIED REGULATORY COMPLIANCE RISKS FOR SURGEONS AND THEIR TEAMS

Orthopedic services are highly regulated. Specifically, the safety and efficacy of implants and devices are overseen by the U.S. Food and Drug Administration. Competition between orthopedics programs is governed by the Federal Trade Commission. Consolidation is overseen by the Department of Justice. Medicare is the major payer for orthopedic services and imposes restrictions on physician ownership and self-referral. And states control licensing of clinicians, facilities, and programs often in collaboration with independent accrediting organizations like the Joint Commission, American Association for Accreditation of Ambulatory Surgery Facilities, Inc. (AAAASF), Accreditation Association for Ambulatory Health Care (AAAHC), Institute for Medical Quality (IMQ) Health Care Facilities Accrediting Program (HFAP) and others. Looking ahead, restrictions on self-referral will be lifted so that physicians and hospitals can collaborate in risk-sharing arrangements with private payers and expand clinical capabilities. Price transparency mandates and conflict-of-interest disclosures are also expected to increase.

These experiences factor heavily into reimbursement of CMS value-based purchasing. They also consider patient satisfaction and performance ratings for physician-sponsored private insurers from the Hospital Consumer Assessment of Healthcare Providers and Systems. As we move forward, every elective procedure or visit will be scheduled through digital platforms, plus estimated out-of-pocket costs for each test and procedure will be available to patients in advance. Additionally, physicians will utilize telehealth and e-visits to more effectively engage with patients.

As healthcare organizations try restoring some normalcy while the pandemic continues, re-engaging patients and procedures requires additional attention in the following areas:

Emergency Relief Funding

The two major sources for relief funds available to orthopedic service providers are the:

• Provider Relief Fund: A grant to practices based on their Medicare fee-for-service revenues
• Paycheck Protection Program: A forgivable loan tied to a practice’s retention of its employees. Attestation for both is based on verifiable COVID-19 expenses.