Gina DiPietro 0:04 Half a million common elective procedures like hip, knee and shoulder replacements are performed every year in the United States. Most, outside of the hospital - with a one night stay or less. Welcome to Industry Insights: a healthcare podcast presented by Novant Health. I'm your host, Gina DiPietro. Regulatory changes over the past few years have made it increasingly easier to perform orthopedic procedures in an outpatient setting. This shift was driven by the Centers for Medicare and Medicaid Services, or CMS, with a goal of reducing the national spend on health care and creating access at lower cost sites. Here to explain it all is Dr. Bryan Edwards, system physician executive at Novant Health Orthopedics and Sports Medicine Institute, and Zack Landry, system administrative executive for that same institute. You'll hear Zack Landry jump in first. Thanks for listening.Zack Landry 1:03 What we are seeing both nationally and at a local level for Novant Health is that many orthopedic procedures that were once exclusively performed within inpatient hospitals are now actively moving to ambulatory sites of care. So you mentioned common elective procedures like hip knee and shoulder replacement, those are increasingly being performed at outpatient surgery center. So nationally, the impact of that is there's a lot of really value to be gained, you look at close to half a million hip and knee replacements that are performed a year in the US several billion in spend on those procedures a year. So we hear all the time about growth of healthcare spending as a percentage of GDP, we have an aging population, so that we know, you know, those hip and knee replacements aren't going away, there's gonna be more of them. So I think there's a real interest in how can we reduce the cost of care? How can we create more value? How do we make them more cost effective. And so I think that then this you know, confluence of factors that are driving cases to the outpatient space has really put the spotlight on orthopedics, I'd say probably over the last couple of years, especially this year.Dr. Bryan Edwards 2:05 Gina, this started back probably 2014 or 2015. When Medicare (CMS) came up with a program, it was basically the Bundle Care Initiative. So it was a program where Medicare looked at their spend every year, and the highest spend they have on a procedural DRG is hip and knee replacement. So obviously, if you're at the top of their list, there are going to be more eyes upon you. And at that point, they created a program called BPCI, which basically was a bundled program, where the government Medicare was going to pay you a set amount of money for that bundle, and you had to manage it the best way possible. And so that led to a lot of changes and how the patient's journey was mapped out. So focus has got placed on preoperative optimization of patients, better pain control techniques, better mobility, removing skilled nursing facilities from the discharge planning, moving to home with home PT. And to this day, it's the only bundle program for Medicare that's actually done what it wanted to do it actually improved quality could decrease length of stays, decrease readmissions and a decreased cost. And when that was happening, what they also noticed is how many patients that we treat with hip and knee replacements they were being discharged with just one night stays. They also noticed that we were discharging patients same days, I think when the light went off with CMS and said, Well, obviously, the site of service that we're delivering is hip and knee replacements. And if patients are only staying one night, well, that's truly outpatient, that's not really an inpatient resource consumer. And so you started to see things such as knee replacements got taken off the inpatient only list and placed on an outpatient list. And then once the government or Medicare, a Medicare makes a move like that, than the insurers follow. And so over the last several years, that's what's happened. And that was kind of the market forces that pushed all of us to take a hard look, because not everybody is going to go home the same day and certain criteria that we've come up with national criteria, not everybody's going to stay just one night. So is a select group of patients. But this select group of patients are what we're talking about in this shift. Gina DiPietro 4:19 What prompted this shift? Is it revenue driven? Does it improve patient outcomes? Perhaps the combination of both?Zack Landry 4:27 Yeah, I'd say there's a couple things that collectively are both prompting the shift and accelerating the shift. And our partners at SG2, a healthcare consulting firm, they even refer to it as the perfect storm for surgical migration. And so Bryan mentioned some of the regulatory perspective. That's the first one and it really starts with CMS, some of the rule changes that they've had over the last couple of years. They make it easier to perform cases outside of the hospital. So hip, knee and shoulder replacement are those high volume big spend items for Medicare, but there's about 300 procedures that CMS actually is removed from the inpatient only list with those goal of reducing the national spend on healthcare creating access at lower cost sites. The second is clinical perspective. Brian mentioned a lot of those. It's easier and safer now to perform procedures and outpatient surgery centers than it was say 10 years ago, you have advancements in medicine, clinical pathways, technology, and equipment allows our surgeons to provide safer procedures and faster recovery. And so you don't need that long hospital stay, it's now become unnecessary, you have the consumer perspective. Third, there's growing interest by patients and insurers to operate at lower cost. And so they're actually incentivizing payers, our physicians and patients to choose the lower cost settings and sometimes pass those savings along to the patients as well to eliminate out of pocket expense. And then lastly, I'd say you have the impact of the pandemic that we've seen over the last 12 months where in the state of North Carolina elective procedures shut down for about six weeks during the height of the pandemic. And beyond that it's really kind of changed the way that people access care. When you think of elective procedures, especially a lot of people thought it was best to wait it out until the pandemic had clear they had concerns about receiving care in a hospital during COVID. We saw the impact of people who lost access to employer sponsored insurance all together. Those are the ones I'd say that SG2 refers to as the perfect storm for orthopedic migration. So you could say that makes Dr. Edwards and George Clooney and Mark Wahlberg and a lot of ways just as we navigate these rough seas for outpatient migration.Gina DiPietro 6:23 Dr. Edwards, would you agree with that - George Clooney? Dr. Bryan Edwards 6:26 I'm definitely George Clooney, in my mind. Gina DiPietro 6:30 You have to love their sense of humor. You'll notice Zack mentioned faster recovery times. Another practice in orthopedics is something known as enhanced recovery after surgery, or ERAS. It's an evidence based approach to shorten both hospital stays and recovery times and decrease the risk of complications. It starts with making sure that person is ready for surgery. So do they smoke? Are they at a healthy weight, if it's a diabetic is their blood sugar controlled? Here's Dr. Edwards.Dr. Bryan Edwards 7:01 You're making sure that the patient before surgery is medically optimized. Then, in that group of patients, you're also doing a lot of messaging to them that we expect you to go home after one night. So you want the whole team to be kind of in a consistent message you know you're going to gray or take good care of you. It's not like we're rushing patients out the doors just we know that they only need a certain amount of resources to succeed. During the surgical period, we've taken a lot of steps to decrease the patient's pain and discomfort we use an agent called TXA. It's an IV medication given a patient's before HIPAA near procedures, and it substantially decreases the amount of bleeding that they have at the time of surgery. So we've seen significant reductions in post operative pain and swelling from the use of TXA. We have anesthesiologist here that perform peripheral nerve blocks and spinals to patients are avoiding generally anesthesia. So they avoid potential complications from that with the peripheral nerve blocks as well. They're taking far less opioids, so they're not as nauseated and some of our surgical techniques become more minimally invasive. And all of that just came together to, I think, give the patient a experience where they're not in as much discomfort as they were in patients procedures are pretty seamless to just take it to the you know, kind of a neat level. One of Dr. Holmes' hip replacement patients came in went home the next day and play golf six weeks after the hip replacement and got a hole in one on the fourth hole of his route. That's unheard of, you know, playing golf at six weeks wouldn't be thought of two or three years ago, but that shows you the minimally invasive techniques that can be done to get people back to what they want to do.Gina DiPietro 8:41 You talked about the difference between surgeries performed in the hospital versus in ambulatory surgery center. But how does this impact reimbursement?Dr. Bryan Edwards 8:51 Well, that's the main headache for a hospital chief financial officers is that it's significantly less reimbursement. There's three kinds of sites of service we have. We have inpatient hospital with HPD outpatient procedures done in the inpatient setting, if you will, and then you have a freestanding type of Center, which is a totally detached ASC. And as you move from inpatient to hospital outpatient to amatory surgery freestanding, there are significant decreases along the way. So obviously, that is less margin for Novant Health, which then requires the entire organization to sit back and say, Well, okay, well, orthopedics can't do anything about this. This is a market trend. It's what the patients and insurers want. Oh, but yes, we've got this decreasing potential margin head coming. So that's when you have to kind of say, Well, what can we do to mitigate that decrease in margin? Well, obviously, I think there's things that you can do that other systems are, you know, for us in orthopedics. We spent a significant amount of time in Charlotte and in Winston building out our trauma programs inside of Forsyth Medical Center and Presbyterian Medical Center. We're also putting in huge focus with neurosurgery on spine, then there's a point where, you know, orthopedics can only I would say, probably next year, about 95% of what we're going to be doing is outpatient. So then you have to really look at your colleagues and surgical oncology, Heart and Vascular, and really look at your product lines to see, okay, well, where else could we grow on the inpatient side?Zack Landry 10:21 I think that's well stated. I would say kind of at a high level, there's opportunities and risk with the shift out of the hospital. And I think you had the chance to speak with Jesse Cureton, and Melanie O'Connell not so long ago about patient affordability and pricing transparency. And so we know that there's the financial impact of moving and that's a risk for us that we need to manage. But there's also the opportunity to bring lower cost care to patients and the process of going through their clinical steps, the operational steps, workflows of moving a case out of the hospital into a surgery center, it helps us to learn a lot about ourselves. And it helps us to better connect with our consumers. And the reality is that our surgeons, too, are getting a lot of pressure from patients. Well, if we can't do it in a surgery center here, then I'm going to go see another surgeon. So it's always our goal to reduce clinical variation to cut out waste and bring affordable products to our patients. And so we keep that in mind too, as we try and balance the impact to hospital financial margin to with the opportunity to deliver lower cost care.Gina DiPietro 11:20 You are both familiar with this idea, this concept of value-based care where people are shifting away from the quantity of care they provide a patient with the quality of care you provide patients. So it's much more outcomes driven. Would you say that this shift that you're seeing is something that supports that shift in healthcare to make it a more value based approach for folks?Dr. Bryan Edwards 11:44 It definitely what we're seeing is. You know, number one, Zack mentioned earlier for our own company, for Novant Health team members, we launched a bundle over a year and a half ago. Our own team members were able to have their joint replacement in a Novant Health facility and minimal out of pocket for them a tailored experience. Obviously, it's a little complicated because no one's self insured. But we proved that the product work, people liked the fact that they had limited out of pocket. They like the connectivity of the bundle with the digital engagement tools that we had to engage them. So there's no question on quality thinking the competitive marketplace for insurers, especially the self insured employers, they're looking for a great result for their team members at the best price of the company. So we've got that in our bundle division, we've created that product with Novant Health team members, and we're ready to use that product to go after the self insured employers.Zack Landry 12:43 I think that's part of the value of having a diad leadership structure, as well and having Dr. Edwards as the traditional clinical expert, and visionary for orthopedic services, and then, you know, our team of leaders who are more focused on the business side and the financial outcome. I go back as a traditional MBA to the Porter's value equation, how do we improve quality? And how do we do it at lower costs. So value is something that we talk about quite a bit. I think that we're really lucky that we have a couple of things that are unique for us. We have expert Surgeons of every nearly every sub specialty throughout our markets. And then we have orthopedic focused hospitals as well. So when you talk about Charlotte orthopedic hospital, you talk about Clements Medical Center being a mostly orthopedic hospital, we have ASC's that are within close proximity to both of those sites. Now, New Hanover having an orthopedic hospital as part of our organization as well. We really have a lot of opportunities to create Center of Excellence around specialized fellowship trained total joint surgeons, for instance, where we can bring the experts to the table, we can bring experts in inpatient nursing care, we have outpatient facilities that can deliver great low cost care and that same remarkable care that we do in the hospital on an outpatient setting, we look at value in a lot of different ways. And we've been able to successfully attack that in a number of ways, whether that's through cost reduction, whether that's through our readmission rates, which are less than half of the Medicare national average, having that diad leadership and having the clinical experts that can lead that across our institute is something that's helped us be successful in delivering value.Gina DiPietro 14:16 Do you know it healthcare systems are seeing this shift from inpatient to outpatient procedures in other programs outside of orthopedics?Dr. Bryan Edwards 14:24 Yes, with Heart and Vascular. There's been also a push for simple cervical lumbar procedures to be done an outpatient setting. So those are two service lines in addition to us that will feel some of these pressures.Gina DiPietro 14:37 It might be nice to sort of wrap up our discussion with lessons learned. So if you could, what have you experienced as the benefits to this approach that maybe you could recommend as best practice to others as they kind of delve into this?Dr. Bryan Edwards 14:53 I think the things you have to do in this business is you got to listen to the customer and listen to the surgeon. So talking to the patients about what worked, what didn't work, you know how they felt like they move through the journey, you learn a lot about where there's educational gaps, you learn a lot about a quote unquote phone call wasn't answered on the answering service. So how do you kind of streamline and package it, we got a lot of great patient feedback from our employer bundles with Novant Health. That was one of the advantages when that was put together, I get a classic example Gina, is that we saw this little blip in readmission, I believe it was around the 10th or 12th day. For some reason, that was a day where people are going to the emergency room for some issue after their hip and knee replacement. It wasn't a lot, but it was statistically it's why is this and it had to do with how you know several things. But what we figured out is, you know, patient being discharged, we were calling him at like two days or three days after they got home, they were calling him at 14 days. So what we did is we adjusted the calls to start calling them around seven to 10 days, and so we could get ahead of you know, they're constipated a question about their wound. You know, frequently, a lot of after surgery, people have a lot of extremity swelling, and they always think they have a blood clot. So they always want to go to the ER and always want to get an ultrasound. And it's really rare that happens, it does happen, but it's not calm. And so we were able to kind of intercept a lot of those patients, and direct them on an outpatient basis to get you know, we would number one, adjust medications work on the GI issues and then you know, get an outpatient based ultrasound. So that way listening to the consumer, you can keep them out of the ER, you don't have any expenses, keep them healthy. And so once a month, we're always hashing out flows and what worked and what didn't work. So I'd say the key for anyone is listen to your patients and listen to the surgeons. And part of that too is we have a lot of input from our nursing staff and physical therapists. Because, you know, nurses see a lot of what's happening on the floor, Zack sits on a team called a best practices team. And in the best practices team, once every two months, we sit down with nursing leaders, therapy leaders across the company. And we find out a lot about the clinical care delivery on how we can improve.Zack Landry 17:06 I would definitely echo that. I think it's very important to listen to our surgeons and our patients and get the insights from them as to how we're delivering value. The one other thing I'd mentioned is taking the time when you're really looking at value to do some patient journey mapping and really trying to understand what's the perspective of the patient? And what's the experience that they're going through, not just for procedure, not just date of surgery, and a day or two of recovery. But what is their entire journey look like? Starting with the first physician office visit when they're first experiencing knee pain or shoulder pain? What's the education look like leading up to that surgical procedure? The surgical wellness visit the optimization steps, are they getting a full packet of 2000 pages that they have to sort through are they getting education in little bite sized bits that they can understand and be fully prepared to take on that surgery to take on their recovery. And I think as we started to do that, as we pulled together all the frontline team members from every part, whether that was the clinics, the hospitals or home health agencies, partner skilled nursing facilities, as we did that, we started to realize little gaps that might occur 30 days pre op that might affect the readmission on the backside. And so I think taking the time, and it was really time intensive for us to be able to build that for our total joint episodes. But since we did that for our team member total joint replacement, which we started about two years ago, and we've seen that performed extremely well, we've actually seen our patients, on average, save about $3,000 out of pocket, because we've been able to eliminate a lot of the waste. And then also too we've had no readmissions over the last year for anybody that's gone through one of those procedures. So we're really proud of the results. And we want to continue to learn and grow from there.Gina DiPietro 18:50 That's fantastic. And I really liked that point that you made around, you know, someone doesn't want to go home with 2000 pages to read through. So really, you know, breaking it down into bite size info. And I think to making sure it's written in a way that people understand it because medical jargon can be tricky and sometimes go over people's heads.Dr. Bryan Edwards 19:10 You have to also understand that every patient wants to receive information like every other patient, right? So you kind of have to figure out millennials that it's really a Gen Z millennial thing, you know, what do people want and you can't have one delivery mechanism.Gina DiPietro 19:28 Thank you for listening to this episode of Industry Insights. You can find more episodes under the Industry Insights channel of the Novant Health podcast family. There's tons of great content there around creating a culture of diversity and inclusion, using technology to transform care delivery, price transparency, and workforce burnout. So feel free to browse around. We're on Apple, Google, Spotify or anywhere you listen to podcasts.
