Executive Summary
Wrong-site surgery errors continue to happen at an unacceptable rate, along with retained foreign objects. Facilities and providers must look for new strategies to avoid these errors.
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Clinicians should be reminded that site marking is not foolproof.
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Having X-rays posted in the OR can help avoid laterality errors.
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A postop debrief can help avoid retained objects.
By Stephen W. Earnhart, MS
CEO
Earnhart & Associates
Austin, TX
The line between hospitals and freestanding ambulatory surgery centers (ASCs) is becoming more and more blurred.
The national trend of doing total joint replacements in freestanding surgery centers is expanding. Medicare is allowing spinal procedures to be performed in ASCs, but not joint replacements — yet.
With Blue Cross citing that the cost of a total knee or hip replacement, in the hospital, can be as high as $69,000 without complications, the pressure to bundle these procedures with the surgeon, the facility, anesthesia, and rehab is a compelling argument. This argument is especially convincing now that many freestanding ASCs are doing just that at a significant savings to payers.
Adding to that shift: The number of hip procedures has doubled and knee replacements tripled in the past 10 years. It is no wonder that there will be changes in the very near future on where these procedures will be performed. Both of these procedures are typically age-related, and 10,000 people turn 65 years old every day, which is a trend that will continue for the next 20 years.
On a side note, we have found that of the non-Medicare eligible patient procedures performed in an ASC, we need to deduct these procedures by 20% for acuity. This estimate means that if your surgeon has 100 total joints they replace in a year and they have a payer mix of 28% Medicare, then the total potential joint replacements they can do in your ASC is 58 per year. (The Medicare deduction is 28%, so 100 - 28 = 72. Then the 20% deduction for acuity from 72 is 14. Then 72 - 14 = 58.) Still, it’s a very attractive market. While the supply and implant cost is high, if you can control your costs, you would do well to explore this market.
By bundling your costs, ASCs have a distinct financial advantage over most hospitals, especially because ASCs can bundle the surgeon fee into the mix.
Spinal surgery, which CMS saw the light on this year by allowing many of the more common procedures to be done in an ASC, has the same option. Depending upon the need for the procedure, typically the acuity is not as limiting on the patients who are healthy enough to have surgery performed in an ASC. The number is closer to 5% vs. 20% for total joints. Again, significant savings can be achieved by bundling.
Many not-for-profit (NFP) hospitals have their own freestanding surgery centers, but they cannot partner with the local surgeons due to Stark and other federal regulations. Therefore, they are at a distinct disadvantage in bundling the surgeon fee into the mix. Even if they could, with the lower cost of the facility fee for a for-profit ASC vs. an NFP hospital, the overwhelming portion of the facility fee for the NFP hospital would dramatically decrease the amount of the bundle that the surgeon would receive.
This issue of bundling, associated fees, and when and where these procedures will be performed is going to continue for many years. The solution? Very simple. Blend the for-profit ASCs with the NFP hospitals. We have been doing it for years.
When hospitals realize that they are going to continue to lose market share across the spectrum of surgical procedures, we will see more and more joint ventures between these two parties. The problem is that both cannot have 51% ownership! [Earnhart & Associates in Austin, TX, is a consulting firm specializing in all aspects of outpatient surgery development and management. Web: www.earnhart.com.]
