Bundled payments are another shift in how orthopedic surgeons and practices are addressing healthcare costs. Moving from a traditional fee-for-service model, in which the insurance company gets a bill from all of the different providers and facilities involved in a patient’s surgery, to one where the providers come together to standardize costs and bundle them together, is certainly a big shift.
Some orthopedic surgeons are successfully implementing bundled payments by opting to do procedures at ambulatory surgical centers, or ASCs. While ASCs might not be all that new as far as general surgery is concerned, it’s another big shift for orthopedic practices. Although certain arthroscopic procedures could be done on an outpatient basis, procedures like joint replacements have typically been done in a hospital setting.
Due to changes in surgical techniques, pain management, and having surgeons more involved in the planning process, it is now possible for even joint replacement procedures to be done in ambulatory surgical centers. Ambulatory surgical centers make it more achievable for orthopedic surgeons to implement bundled payments.
Bundled Payments Can Be a Benefit, Rather Than a Burden
Dr. James Ballard, an orthopedic surgeon in Portland, OR, was a guest on Episode 15 of our podcast. Dr. Ballard got together with a group of surgeons to start an ASC. For orthopedic surgeons, a surgeon-owned ASC allowed them to implement policies and standards to ensure that procedures would run smoothly. This includes procedures typically done in a hospital, like joint replacements.
Dr. Ballard and his group found several benefits to this model, including:
More Control Over Pricing & Processes
It can be more difficult for orthopedic surgeons to deal with bundled payments in a hospital setting. Often, they do not have complete control over the pricing or processes in a hospital. With an ASC, there is more control over these factors, especially when the surgeons own the facility.
Reduced Surgical Costs
In the ASC setting, Dr. Ballard and his colleagues found that bundled payments helped to keep surgical costs down. They were able to create a standardized process and standardized costs, which could then be bundled together and submitted to the patient’s insurance as a singular charge, rather than separate charges from all of the different providers involved in a patient’s procedure. Because this benefits the insurance companies, they are more likely to encourage patients to use ASCs with bundled payments, where they can still get high-quality care at a lower cost.
Patients Also Benefit from Bundled Payments in an ASC
An ASC setting, along with bundled payments, certainly has benefits for orthopedic surgeons and insurance companies. But most importantly, there are several potential benefits for patients.
Same-Day Return Home
First, in an ASC, patients return home the same day. Most patients do not enjoy staying overnight at the hospital and would prefer to recover in the comfort of their own home. Additionally, depending on the patient’s insurance, avoiding a hospital stay may reduce out-of-pocket costs for patients. Bundled payments may provide further cost savings to the patient.
Furthermore, patients are often better-educated when they have surgery in an ASC. Surgeons have to ensure that their patients are well-prepared to recover at home. As a result, patients get better education about the procedure and recovery from surgeons and staff. Well-informed patients may feel more at-ease with the procedure, because they know what to expect.
When surgical costs are reduced, this may be less that the patient has to pay out-of-pocket toward deductibles. All of the benefits of an ASC–recovering at home, cost savings, and better education–can also improve patient satisfaction, which is a win for both patients and surgeons.