Do surgeons need incentives to cut costs?

Shortly after our recent post Optimizing patient outcomes by spending health care dollars wisely a colleague called attention to an article in the Harvard Business Review: Physicians Can Help Cut Costs. They Just Need the Right Incentives.

The thesis of this article is that "Many of physicians’ daily decisions — such as their selection of drugs, devices, and technologies, and the amount of time they utilize resources such as operating rooms and hospital beds — have a significant financial impact on hospitals. By providing physicians with the appropriate incentives, hospitals and health systems can enlist them in the effort to manage costs while simultaneously maintaining or improving patient outcomes."

This article tries to answer five questions:
1. Broad or Narrow Incentive Structures?
2. Individual- or Team-Based Incentives?
3. What’s the Right Timeframe for Compensation?
4. How Much to Compensate?
5. Financial or Alternative Forms of Incentives?

Surgeon decisions such as 

preoperative plain films versus 3D CT scans, 

anatomic versus reverse total shoulder for osteoarthritis, 

standard versus augmented glenoid components, 

general anesthesia versus general anesthesia + interscalene block, 

transosseous cuff repair versus double row suture anchor repair, and

cuff repair alone versus cuff repair with a patch 

have a substantial impact on the cost of care, yet their impacts on patient comfort and function are not well defined. 

Surgeons determine other costs that are harder to measure and harder to include in an incentivization scheme, for example 

the cost of disposables versus reusables, 

the cost of opened but unused implants, 

the cost of sterilizing unused instruments, and 

the cost of getting rid of the trash from each surgical case.

It is interesting that surgeons make different (more economical) choices about expenditures when they perform surgery in an ambulatory surgery center in which they have a financial interest in the bottom line as opposed to performing the same operation in a medical center in which they do not have a financial interest.

There are many ways to get good outcomes while spending less money. Some are pointed out in Optimizing patient outcomes by spending health care dollars wisely. If we can get good comes for less money, it's a win.  Sometimes this can be accomplished by doing less.  A favorite non-orthopaedic  example is the scooter bike. We all know that outcome we want for our kids learning to ride a bike is good balance. The expensive approach is to get a bike with training wheels. However this does not teach balance, it teaches dependency on training wheels. 

The less expensive approach is the scooter bike that has no training wheels, yet safely teaches the child balance. 

Can you think of analogs to the scooter bike in shoulder surgery?

In fiscal year 2023, healthcare expenditures made up about $1.4 trillion out of a total federal budget of roughly $6 trillion, or about 23-25% depending on exact allocations. This percentage is rising annually. As surgeons we are in a strong position to reduce health care costs by making informed decisions about the technologies we use and those we advocate.

Each of us should be on constant lookout for ways to reduce the cost of health care, even if we're not incentivized to do it - it's the right thing to do.

You can support cutting edge shoulder research that is leading to better care for patients with shoulder problems, click on this link

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Here are some videos that are of shoulder interest
Shoulder arthritis - what you need to know (see this link).
How to x-ray the shoulder (see this link).
The ream and run procedure (see this link).
The total shoulder arthroplasty (see this link).
The cuff tear arthropathy arthroplasty (see this link).
The reverse total shoulder arthroplasty (see this link).
The smooth and move procedure for irreparable rotator cuff tears (see this link).
Shoulder rehabilitation exercises (see this link). 

Rethinking How We Spend Healthcare Dollars During—and After—the Pandemic

Rethinking How We Spend Healthcare Dollars During—and After—the Pandemic

The coronavirus pandemic is having a profound effect on healthcare economics. A recent article in Health Affairs1 estimates that the median direct medical cost of a single symptomatic COVID-19 case can exceed $3,000 during the course of the infection alone. As of this writing, there have been almost 2.5 million confirmed cases in the US,2 with the number of known cases doubling every 2 months.3 These numbers suggest that the direct medical costs of the pandemic could easily exceed $8 billion. In addition, federal legislation enacted to help mitigate the effects of the pandemic is estimated to cost more than $480 billion over the next 10 years.4

Independently, the application of new technologies has also been pushing healthcare costs upward for decades. Long before the pandemic, a 2008 report from the  Congressional Budget Office concluded that “the bottom line from all these analyses is that the single most important factor driving the long-term increase in health care costs involves medical technology” and that “technological advances on average have brought major health improvements, but they often then get applied in settings where their benefits seem much less obvious.”5

In orthopaedics, we are strongly attracted to technology. In some cases – such as arthroscopy – technological advances enable less invasive, more effective, and safer treatments. In other cases, the patient benefits “seem much less obvious.” A recent review article makes the following observations about technology use in arthroplasty:

• Computer-assisted technologies that are used in arthroplasty include navigation, image-derived instrumentation, and robotics.
• Computer-assisted navigation improves accuracy and allows for real-time assessment of component positioning and soft-tissue tension.
• It is not clear whether the implementation of these technologies improves the clinical outcome of surgery.
• High cost and time demands have prevented the global implementation of computer-assisted technologies.

If we take shoulder arthroplasty as a general example, we see that prior to the introduction of routine preoperative CT scans, 3D planning, patient-specific instrumentation, metal-backed and augmented glenoid components, and short-stemmed and stemless humeral components, the results of anatomic total shoulder replacement for osteoarthritis were excellent, with 10-year revision rates under 5%.6,7 Such outcomes do not leave much room for improvement from newer technologies, each of which carries incremental costs of research, development, clearance by the FDA, marketing, learning curves, and potential product recalls and unanticipated long-term adverse effects.8 As Rosenthal et al. recently pointed out, “Since 3D planning and intraoperative navigation is more costly than 2D planning, and augmented glenoid components are more costly than standard glenoid components, the cost-benefit of these changes with respect to mid-term and long-term clinical outcomes and implant survival has not been ascertained.”9

Robust clinical data are needed to establish the incremental benefit to patients of each new technology in order to justify its associated incremental costs in comparison to legacy approaches that have been in place for years.

As a more specific example, the average cost of a preoperative shoulder CT scan ranges from $625 to $8,400,10 yet it remains to be demonstrated whether application of this technology leads to better shoulder arthroplasty outcomes in comparison to results obtained with conventional preoperative radiographic imaging.11 Agyeman et al.(see this link) recently concluded that  “although CT scans are associated with greater financial cost and exposure to radiation than radiographs, the literature has yet to describe the additional clinical value and/or potential cost-value benefit as a result of improved outcomes provided by the use of CT scans in patients undergoing total shoulder arthroplasty, even when integrated with virtual planning software and generation of patient specific instrumentation.” If a preoperative shoulder CT scan costs $1,000, the very low end of the aforementioned range, avoiding routine preoperative CTs in 3 shoulder-arthroplasty patients would save an amount of money equal to the average direct medical cost of a patient with COVID-19—$3,000.

We conclude that this is a good time to seriously reconsider how we apply new technologies in orthopaedics by asking a simple question: Are we spending our more-precious-than-ever healthcare dollars in ways that best serve the population as a whole?

References

1. Bartsch SM, Ferguson MC, McKinnell JA, O’Shea KJ, Wedlock PT, Siegmund SS, et al. The potential health care costs and resource use associated with COVID-19 in the United States. Health Aff (Millwood). 2020;39(6):927-35.
2. John Hopkins University CSSE. COVID-19 dashboard by the Center for Systems Science and Engineering (CSSE) at John Hopkins University (JHU). 2020 Accessed June 28, 2020. Available from: https://gisanddata.maps.arcgis.com/apps/opsdashboard/index.html#/bda7594740fd40299423467b48e9ecf6.
3. Hernandez S, O’Key S, Watts A, Manley B, Pettersson H, CNN. Tracking Covid-19 cases in the US. CNN, 2020 Accessed June 28, 2020. Available from: https://www.cnn.com/interactive/2020/health/coronavirus-us-maps-and-cases/.
4. Congressional Budget Office. The budgetary effects of laws enacted in response to the 2020 Coronavirus pandemic, March and April 2020. 2020 Accessed June 28, 2020. Available from: https://www.cbo.gov/system/files/2020-06/56403-CBO-covid-legislation.pdf.
5. Congressional Budget Office. Technological change and the growth of health care spending. 2008 Accessed June 28, 2020. Available from: https://www.cbo.gov/publication/24748.
6. Australian Orthopaedic Association National Joint Replacement Registry (AOANJRR). Annual report 2019: Hip, Knee & Shoulder Arthroplasty. Total Shoulder outcomes over two decades. Figure ST22, Page 16. 2019 Accessed June 28, 2020. Available from: https://aoanjrr.sahmri.com/documents/10180/668596/Hip%2C+Knee+%26+Shoulder+Arthroplasty/c287d2a3-22df-a3bb-37a2-91e6c00bfcf0.
7. Neer CS, 2nd, Watson KC, Stanton FJ. Recent experience in total shoulder replacement. J Bone Joint Surg Am. 1982;64(3):319-37.
8. Somerson JS, Neradilek MB, Hsu JE, Service BC, Gee AO, Matsen FA, 3rd. Is there evidence that the outcomes of primary anatomic and reverse shoulder arthroplasty are getting better? Int Orthop. 2017;41(6):1235-44.
9. Rosenthal Y, Rettig SA, Virk M, Zuckerman JD. The impact of preoperative three-dimensional planning and intraoperative navigation of shoulder arthroplasty on implant selection and operative time: a single surgeon’s experience. J Shoulder Elbow Surg. 2020;Epub ahead of print.
10. Poslusny C. How much does a CT scan cost? New Choice Health, Inc., Pensacola, FL, Accessed June 28, 2020. Available from: https://www.newchoicehealth.com/ct-scan/cost.
11. Matsen FA, 3rd, Whitson A, Hsu JE, Stankovic NK, Neradilek MB, Somerson JS. Prearthroplasty glenohumeral pathoanatomy and its relationship to patient’s sex, age, diagnosis, and self-assessed shoulder comfort and function. J Shoulder Elbow Surg. 2019;28(12):2290-300.