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The Clinical and Economic Impact of Value-Based Implants in Orthopaedic Trauma - OMTEC 2018


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Learn about the market forces driving value-based care in orthopaedics (ASCs, bundled payments), and the clinical outcomes and economic impacts imparted by the use of value-based implants.

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The Clinical and Economic Impact of Value-Based Implants in Orthopaedic Trauma - OMTEC 2018

  1. 1. The Role of Value Based Implants in Orthopaedic Trauma Peter L. Althausen, MD/MBA Reno Orthopaedic Clinic
  2. 2. Smith & Nephew Research Support The Orthopaedic Implant Company (OIC) Stock or stock options in a company Journal of Orthopaedic Trauma Reviewer Journal of AAOS Reviewer Disclosures
  3. 3. What are High Value Implants High Value Implants Conventional Implants Historically, medical device companies have used innovation as means of differentiation and driving up costs. In the orthopaedics, we’ve seen a tremendous slowdown in true innovation.
  4. 4. What are High Value Implants High Value Implants Conventional Implants High Value Implants Conventional Implants Under the hood they are the same.
  5. 5. High Value Trauma Products • Cannulated Screws • Nails • External Fixation • Anatomic Plates and Screws
  6. 6. Healthcare is the single greatest expenditure of most developed nations Total U.S. cost $2.9 trillion 17.4% of U.S. GDP 3 top expenditures Arthroplasty ($7.2 Billion) Cardiac Surgery ($6.4 Billion) Hip Fractures ($4.7 billion) US Healthcare Costs
  7. 7. Changing Reimbursement
  8. 8. Market Forces are Changing Ambulatory Surgery Centers • Many are physician owned • Increased indications (joints, trauma, spine) • 80% of all orthopaedic cases will be done in an ASC by 2020 • Development of Orthopaedic Urgent Cares will further drive fracture care into ASCs Surgeon Alignment • Service line re-investment • Gain-sharing • Co-management agreements • Hospital employed physicians Healthcare Policy • Bundled Payments (Government and Private Payors) • CJR/SHFFT
  9. 9. Trauma Landscape • Fastest growing area of orthopaedics • Device market: $6.3B in 2016 to $14B in 2028 • Non-elective. Trauma patients will always need surgery. • Patients cannot be turned away by EMTALA Laws. • Most underinsured/uninsured segment of orthopaedics. • Need to be treated in the most economical means possible. • Must have high quality implants to prevent complications.
  10. 10. Trauma Landscape (Cont.) • Hip fracture bundles are here with BPCI, but more trauma bundles will come • As more trauma and fracture care moves to ASCs and outpatient, hospitals will be stuck with most costly patients • Perfect storm is here, as surgeon owned orthopaedic urgent cares will be driving more trauma business to their ASCs • Both ASCs and hospitals are now seeking high value trauma implants
  11. 11. Gainsharing/Co-Management Co-manangement • A relationship between a group of physicians and a hospital where both parties are actively involved in managing a specific hospital service line • Physicians receive a portion of service line revenue (3-5%) • These agreements are legal Gain-sharing • If I, the physician, assist you, the hospital, in saving money, then you will share some of the savings with me • This can be more difficult to set up, so the government has stepped in
  12. 12. Bundled Payment for Care Initiative • The latest cost saving program developed by CMS • Legalized form of gain-sharing • Institutions and orthopaedic surgeons can directly benefit from cost savings • 4 models exist • Physician eligible for 150% of procedure if beats target • Incentive payments made to group from the difference between the claims paid by CMS during the 90-day period versus the target price set by CMS
  13. 13. Scientific Support CONCLUSIONS: “Hospital implant costs were decreased significantly without any associated increase in complication rate or change in radiographic outcome.”
  14. 14. My Experience • Average of 60% savings • 30% increase in cases at ASC • Saved of $850K in implant costs over a 12-month period at local hospital • BPCI Program saved hospital over $1.9M • BPCI Program generated over $1.2M for practice • No increase in complication rate • Decrease in OR time • Similar Clinical Outcomes
  15. 15. Conclusion • Due to market forces, High Value Implants are here to stay • Savings are significant to Patients, Hospitals and ASCs • Physician mindset is changing due to new innovations in reimbursement, rise of ASCs and orthopaedic urgent cares • Physicians are aligning with their institutions to deliver better value in healthcare due to gain-sharing and co-management