In recent years, orthopedic providers have watched a prolonged period of reimbursement stability come to an end. A significant number of elective procedures and a robust stream of revenue from ancillary services had largely shielded orthopedic providers from the reimbursement declines experienced by many other specialties. That, in turn, resulted in little change to orthopedic care delivery.
But shrinking reimbursement levels and new payment models are now directly affecting orthopedic physician practices. Payers and providers are seeking cost-saving opportunities amid high growth expectations. As a result, a dynamic environment is developing in which health systems and orthopedic physicians alike are looking to restructure and optimize the delivery of orthopedic care in the outpatient setting.
While orthopedic providers continue to navigate this new environment, the following outpatient trends are expected to continue taking shape in 2015:
Joint and spine surgical procedures will keep shifting to ambulatory surgery centers (ASCs).
Several key factors are driving this migration: the push toward price transparency, enabling patients to shop for low-cost, high-quality care; new technological innovations that are allowing a broader array of procedures to be conducted in the outpatient setting; and perhaps most significantly, CMS’s decision to approve reimbursement for certain surgical spine procedures conducted in ambulatory settings. And while CMS still doesn’t reimburse for total joint replacements in ASCs, private payers recognize the opportunity to lower costs and are increasingly heading down this road.
This shift in scope is expected to drive more profitable volumes to ASCs, creating new drivers that will affect the outpatient market for orthopedic surgery, including:
- Increased interest in partnership
- A need to develop new ASC infrastructure
- An acute focus on cost efficiencies
Orthopedic surgeons are increasingly looking for new revenue opportunities as they face downward pressure on reimbursement.
CMS continues to implement a small annual increase in payment for outpatient services. However, independent orthopedic surgeons are struggling to maintain historical compensation levels as out-of-network reimbursement disappears and competition increases for ancillary service revenue. This has led orthopedic surgeons to seek new revenue streams, including:
- Developing orthopedic urgent care and after-hours clinics
- Owning and operating physical/occupational practices
- Entering into management services arrangements with hospital partners
- Establishing ASC joint ventures
As value-based reimbursement becomes more prevalent in orthopedics, surgeons are aiming to create “one-stop shops” for orthopedic care.
With bundled payments, managed care, and shared savings/ACO arrangements becoming more prevalent in payer contracting, orthopedic surgeons are trying to establish a setting equipped to provide a number of services along the continuum of care. Developing one-stop shops for orthopedic patients is a solution some physicians are considering as a means to control the quality and total cost of care.
Of course, it’s still rare to see an orthopedic practice independently build a one-stop shop. But an increasing number of independent orthopedic groups are approaching health systems to establish these centers. This gives health systems an opportunity to develop collaborative relationships with independent orthopedic physicians that may lead to tighter integration in the future.
Tighter integration is a theme common to all of these trends, and emblematic of the transformational change affecting the entire healthcare industry. And while orthopedic care dodged the trend of declining reimbursement for nearly 10 years, the shift toward value-based care delivery won’t be so easy to avoid.