Bundled Payments For Joint Replacement Surgery

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What’s Wrong With Our Medical System?

The cost of healthcare and health insurance has risen continuously at an unsustainable rate this century. Inherent in this cost increase is an opaque and backwards pricing system whereby consumers cannot know the cost of care until after it has been delivered and only get the bill after the service. Such a system makes it impossible for those consuming healthcare and ultimately paying for it to shop for value like a true consumer in a product or service market.

This paradigm is changing as employers struggle to afford healthcare benefits for their employees and as individuals and families struggle to afford health insurance at the current rates. Higher premiums and high deductible plans have shifted an increasing burden of the cost to the patient or the employer while the large consolidated insurance companies see their quarterly profits continue to rise. In response to the growing need for innovative cost control solutions, a market for direct care has arisen based on cash prices which are known in advance of the care along with inclusions and exclusions.

Direct care implies that patients and companies can enter into a relationship with a provider or facility directly without the need for an insurance plan or referral network. Direct employer contracting is when a provider contracts with an employer to care for its employees using a transparent pricing structure. This allows a direct cash payment between the consumer and the provider without the need for a benefits broker, insurance plan or third party administrator.

The market for these services is growing as insurance companies continue to increase the cost of premiums and as large consolidated health systems leverage market share and ownership of services to continually drive up the cost of care. Such health systems have a large administrative and capital overhead that limits their ability to be nimble and competitive in a market providing high quality care at low cost. This market will be driven by independent providers working at independent locations who are not employed or administrated by the current entrenched system.

Transparent Cash Prices:

Price transparency means that the cost of care is known in advance of the service and there are no hidden fees, balance billing, out of network charges or other tools that the current industry uses to upcharge medical care. For self-funded employers and benefits advisors who help manage and structure plans for them, cash prices are a significant win in terms of being able to substantially reduce costs directly and reduce the administrative burden of payment. This is often done through bundled payments at centers which are still private and not part of a large health system or a third party management company.

What is a Bundled Payment?

In a traditional fee-for-service system, individual parts of a care episode are billed to an insurance company through separate claims. Each claim must be adjudicated by the insurance company effectively leading to many bills being submitted and paid for one “product.” As an example, for a total knee replacement, the insurance company would get bills from the surgeon, facility (hospital or surgery center), anesthesia provider, visiting nurse service, and physical therapist. This would be similar to purchasing a smartphone and instead of paying one price to the cell phone carrier, the consumer would pay each company separately that contributed technology to the phone.

A bundled payment combines the total cost of a procedure into one fixed price that is known in advance of the service. One bill gets submitted to the insurance company and the payment then gets distributed to the individual components and providers of the care team by a third-party bundle manager. This significantly simplifies the administrative cost of care. Bundled payments are growing in popularity for diagnoses that have well defined care episodes such as total joint replacement.

Bundled payments can either be day of surgery only or 90-day bundles. Day of surgery bundles include the facility fee, surgeon fee, implant fee and all other durable medical and pharmaceutical items, anesthesia fee and onsite physical therapy. 90-day bundles include all of this plus postoperative care for the first 90 days to include office visits, postoperative physical therapy and customized “navigation” as patients progress through their recovery.

Who is eligible for bundled payments?

Currently our practice offers bundled total hip and knee replacements for patients with several of the well-known insurance carriers. Surgery is performed as an outpatient at Stratham Ambulatory Surgery Center using our AVATAR customized rapid recovery care program. By avoiding hospital-based care, our bundled payment program can lead to cost savings of as much as 60% compared to traditional fee-for-service care despite no change in the care itself.

We also offer direct employer contracting and cash-pay options for self-insured companies, health sharing programs (such as ministries), or patients who simply wish to pay directly for healthcare without going through an insurance vehicle. Finally, we work with several companies who help align those seeking cash prices with those providing such services.

What is PACE?

An acronym that stands for Personalized Ambulatory Care Excellence, PACE is our bundle management program that organizes the surgical procedure, the care customization and navigation and the payment to all members of the care team including the surgery center, implant vendor, surgeon, anesthesia provider, visiting nurse association and physical therapist. We work with specific therapists who are contracted as part of our PACE program. These are therapists we trust to provide the best care to our patients and achieve the results we expect for excellent outcomes. All of our PACE patients benefit from our AVATAR rapid recovery program. Despite the substantial cost savings, we spare nothing to ensure the best possible care for our patients.

Experience and Quality:

Our practice has performed well over 2000 outpatient hip, knee and shoulder replacements over the past 7 years. This large volume of experience has allowed us to perfect our care plan to minimize complications and maximize patient safety. Our infection and hospital readmission rate are a fraction of the national average and our patient satisfaction score is 97%. Experience matters when it comes to outpatient joint replacement and other orthopedic surgeries. With our AVATAR program and customized care navigation, we can achieve a level of quality that substantially increases value to the patient.

Surgical Tourism:

This refers to the concept of travelling for surgical care. Our bundled payment program offers such a degree of cost savings over hospital-based care that patients can still save money if they travel from a distance and stay locally at a hotel that can accommodate post-operative patients. Our team can help arrange travel and we can customize our care plan around patients travelling from a distance either by car or by plane. We have had patients come from as far away as Alberta. Canada, Salt Lake City, Utah, Hawaii and all New England states including New York. Considering that a well-done surgery can provide results that last for decades, travelling for the right care is often the right decision. Our commitment is the level of engagement we place in the care process to ensure our patients have the highest likelihood of success.

Is Outpatient Joint Replacement Safe:

Multiple studies have now proven that in properly selected patients, outpatient joint replacement is not only safe, but often safer than hospital-based care. Studies have shown higher patient satisfaction with fewer complications and hospital readmissions. Proper vetting of patient eligibility is important as is team experience in managing outpatient care. Our team has performed over 2000 outpatient hip, knee and shoulder replacements over the past several years, and 70-90% of our patients go directly home after surgery on any given day. This experience has allowed us to perfect our process to maximize the chances of success. Our surgery center also has abundant experience with these cases in using the most advanced anesthetic techniques and rapid recovery pathways. We have had patients in their late 80’s successfully go home the same day with no complications. Our experience is unparalleled around the region, and the commitment of our team ensures that patients are always able to reach us if problems arise.

How It Works:

To receive a specific quote contact our Case Navigator Kathleen Leavitt, PA-C. Provide your name, contact information and the name of the procedure you are inquiring about. She will present this information to Drs King and Parsons who will determine if the treatment is appropriate or if further diagnostic information is needed.

Once the case is accepted, a Letter of Agreement will be sent outlining the care plan, included services in the bundle and other recommended supplies. Travel arrangements can be made if necessary. Once the patient signs the Letter of Agreement, the case will be booked along with all preparatory work including labs, imaging and medical clearance if necessary. Our scheduling experts can help arrange all of this as well as the collation of any prior medical records pertinent to the case. Please note that medical clearance is not part of the bundle.

All patients will see the surgeon for an in person consultation prior to the surgery. This can be arranged near the date of surgery for patients travelling from a distance.

Payment for services is expected within 30 days of surgery for patients or companies paying cash. Specifics of payment may differ for patients undergoing a commercial bundle through an insurance plan. In these cases, some patients may be required to pay some or all of their necessary deductible if this has not already been met. Our Case Navigator can determine these details in advance.

Bundled Pricing

Click on a joint below to see pricing