Improving Arthroplasty Efficiency and Quality Through Concentrating Service Volume by Complexity: Surviving the Medicare Policy Changes

Abstract We have an academic medical center (AMC), an associated community-based hospital (CBH) and several ambulatory care centers (ASC) which are being prepared to provide same day discharge (SDD) TJA and UKA. The near-capacity AMC cared for medically and technically complicated TJA patients. The CBH wanted to increase volume, improve margins, and become a Center of Excellence with an efficient Hospital Outpatient Department (HOPD) and SDD TJA experience. Methods We transitioned primary, uncomplicated TJA, UKA, and minimally invasive TJA to the CBH. Revision surgeries, patients with extensive comorbidities, and complex primaries were performed at the AMC. Protocols were developed to facilitate SDD UKA and THA as well as rapid recovery protocols for TKA at both hospitals. A protocol-based system was put in place to make both hospitals ready for the removal of TKA from the IPO List in order to avoid Quality Improvement Organization (QIO) and possible resultant Recovery Audit Contractor (RAC) audits if referred after implementation. Results The CBH volume increased 36.7% (+239) . AMC volume slightly decreased (-0.46%, -5) resulting in an increase in margin contribution for the system. CBH quality metrics (surgical site infections (SSI), length of stay (LOS), readmissions, and mortality) were improved. Surgeon satisfaction improved as their volume, efficiency, quality metrics, and finances were enhanced. Although CBH per-case revenue was 80.3% and 74.4% of the AMC for THA and TKA, net margins were 3.6% and 18.8% higher for THA and TKA, respectively. Increased efficiency, lower hospital cost and higher volume at the CBH allowed for an increase in revenue despite lower reimbursement per case. Conclusions This strategy will 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 which will be subjected to further decreases in net revenue per patient.