Abstract
At our tertiary, large, academic healthcare system, we have access to an academic medical center (AMC), a community based, orthopedic friendly, efficient hospital (CBH) and several ambulatory care centers (ASC) which are being prepared to provide same day discharge (SDD) TJA and UKA. We had a near-capacity AMC with an excellent ability to care for medically and technically complicated TJA patients. However, efficiency was less than desired regardless of case complexity with an average effective case time of 4 hours. Concurrently, the orthopaedically, under-utilized community-based hospital (CBH) wanted to increase volume, improve margins, and become a TJA Center of Excellence with the ability to provide an efficient Hospital Outpatient Department (HOPD) and SDD TJA surgery experience.
Methods
The CBH had a main operating floor and a separate floor of four OR suites which were repurposed with the goal of utilizing these rooms for TJA four days per week with an average of 3.5 cases per room per day. We preferentially performed primary, uncomplicated TJA, UKA, and minimally invasive TJA at the CBH. Revision surgeries, patients with extensive medical comorbidities, and complex primary surgeries would be performed at the AMC. Our goals were to decrease costs, readmissions, length of stay, and increase margins at the CBH while increasing efficiency, revenue and volume. Protocols were developed to facilitate SDD UKA and THA at both hospitals as well as rapid recovery protocols for TKA at both hospitals with the understanding that the CBH would perform more of these cases but the efficiency could also be implemented at the AMC when possible. We also needed a strategy to deal with TKA and eventually THA being removed from the Inpatient Only (IPO) list. CMS has utilized the “Two-Midnight Rule” to define outpatient status for both THA and TKA. This has distinct financial implications for the facility's reimbursement with outpatient being $10,123 on average versus $12,380 for inpatient status. A protocol-based system was put in place to make both hospitals compliant with the removal of TKA from the IPO List in order to avoid Quality Improvement Organization (QIO) and Recovery Audit Contractor (RAC) after implementation.
Results
Comparing FY 2018 to FY 2019, volume increased 26.4% at the CBH. Outpatient case volume rose substantially from 14 cases to 243. Volumes were slightly decreased at the AMC (−4.57%) resulting in a substantial increase in margin contribution for the parent enterprise. Quality metrics at the CBH (surgical site infections (SSI), length of stay (LOS), readmissions, and mortality) were improved. LOS improved from 52% to 71% discharge before 48 hours. The LOS decreased 12% for THA and 8.1% for TKA. CBH readmission rates decreased from 1.38% to 0.9% with no deaths. Surgeon satisfaction is greatly improved as their volume, efficiency, quality metrics, and finances were enhanced.
Financial performance was improved in aggregate and per case for the CBH. Although the CBH per-case revenue was 80.3% and 74.4% of the AMC for THA and TKA: the net margins were 3.6% and 18.8% higher for THA and TKA, respectively. The increased efficiency, lower hospital cost and higher volume at the CBH allowed for an increase in revenue despite lower reimbursement per case.
Conclusions
A shifting reimbursement landscape, value-based payment initiatives, and increasing volume have challenged traditional TJA delivery systems. This demonstrates one strategy to help hospital systems improve net margins while improving patient care despite lower net revenue per TJA episode. These strategies will become increasingly important going forward with the transition of higher numbers of TJA patients to outpatient settings including ambulatory surgery centers which will be subjected to even further decreases in net revenue per patient.
