23
ORTHOPEDIC SECTION
Orthopedics and Spine — 6 Trends for 2016
By Scott Becker and Laura Dyrda
L
oma Linda (Calif.) School of Medicine switched to a rep-less model
for orthopedic implant purchasing, according to a Surgical Products
Magazine report.
e rep-less model purchases implants from the materials manufacturer for
products that haven't had major implant design updates for the past 10 years.
e orthopedic implants Loma Linda uses are made in the United States and
have FDA clearance.
So is it working? Here are five things to know:
1. Loma Linda works with OrthoDirect to provide the knee and hip replace-
ment implants.
2. e surgeons came together for an evidence-based review of different
manufacturers and narrowed their choices down to a few manufacturers.
ere is a hospital employee who shared their knowledge about the implants
with the surgical technician at the hospital.
3. In the first year, there were persistent rumors about the change, and Direc-
tor of Loma Linda University Medical Center's East Campus Perioperative
Services and Loma Linda Health Perioperative Services Scheduling and Bill-
ing Ilsa Nation, RN, MA, had to continually discuss why the change was made.
4. e OR team eventually realized the system's benefits and the biggest sup-
porters are now taking ownership of the rep-less system.
5. More than 90 percent of the surgeries are done with implants purchased
from the manufacture at the hospital, and there has been nearly 60 percent
reduction in total knee replacement procedure cost and 54 percent reduction
in total hip replacement procedure costs. n
A
s we move into 2016, we see the following six trends and
concepts front and center for orthopedic and spine. We
would welcome thoughts and comments from others as
to what you see as the big trends.
1. The growth of super groups. Here, we see the continued
emergence of super groups like OrthoCarolina, Rothman Insti-
tute, IBJI, Midwest Orthopedics at Rush, OrthoIndy, Newport
Orthopedic Institute, The CORE Institute and others. These are
great large groups that have an important place in the commu-
nity and are expanding. These groups tend to do well for their
physicians and tend to serve as a market for payers.
Exact terms of merger agreements vary, but many independent,
entrepreneurial orthopedic surgeons can find the larger group
attractive because they're able to continue running their practice
with the economies of scale advantage of a large group. The af-
filiates give small operations leverage in payer contract negotia-
tions, support for electronic medical record implementation and
access to shared knowledge among colleagues.
2. Spine sector. In the spine sector, we continue to see both
large teams — Texas Back Institute, Laser Spine, Virginia Spine In-
stitute — as well as individual surgeons aggressively try and carve
out niches by themselves. We continue to see the development
of great individual spine entrepreneurs. Some are finding it more
challenging to stay independent.
Merger and acquisition deals among physician practices nearly
doubled in the first quarter of 2015 compared with the same pe-
riod in 2014 and continued to grow throughout the year. There
were 21 deals in the first quarter last year and physician practice
management companies led 18 of them. At the same time, hospi-
tal and health system practice acquisition slowed.
3. No contract spine groups. Over the past few years, we have
seen the emergence of "no payer" contract spine groups. These
groups still take insured patients. However, they work with the
patients to obtain payer reimbursement and, in fact, have such
an elite reputation that they can be a no contract spine group
and still do tremendously well.
4. Bundled payments. Bundled payments have been rumored to
be on the move for years and years. Now, we are actually starting
to see them really develop. Large employers including Wal-Mart,
Lowe's and Jet Blue launched bundled payments for six special-
ties including spine surgery. Throughout the country payers and
orthopedic groups and spine groups are looking more heavily at
bundled payments. For example, OrthoCarolina contracts for or-
thopedic and spine bundle payments with Blue Cross Blue Shield
of North Carolina with bundles running from $22,000 to $30,000
per procedure, according to The Charlotte Observer.
Half of all physicians, 78 percent of hospitals and 80 percent of pay-
ers find bundled payments appealing, according to Strategy&.
More than half of the hospitals attempting bundled payments re-
port wanting to increase the procedure volume, case settings and
partners included in the bundle. Eighty percent of hospitals with
bundles report improving patient engagement, increased align-
ment with physicians and reduced administrative costs.
5. Stubbornly independent. Orthopedic and spine groups re-
main stubbornly independent. This has been more so than we
would have expected. As the world has moved towards more and
more physicians employed by hospitals, we continue to see a great
deal of spine groups remain significantly independent. Nearly half
of orthopedic surgeons — 44 percent — were in private practice
groups, according to the 2012 American Academy of Orthopaedic
Surgeons Census data. Of those, 18 percent were solo practitio-
ners and 9 percent were in a multispecialty group private practice.
Only 9 percent earned a salary from a hospital or medical center.
6. ASCs and ancillaries. ASCs and ancillaries remain as or more
critical as ever to the financial and practice success of orthopedic
groups. Key ancillary services for orthopedic surgeons can include
imaging such as MRI or musculoskeletal ultrasound, physical ther-
apy, neuromonitoring, durable medical equipment and ambula-
tory surgery centers. In the past three years, 41 percent of indepen-
dent physicians and 20 percent of employed orthopedic surgeons
reported adding ancillary services to their practice, according to
the 2015 Medscape Orthopaedist Compensation Report. n
Did Loma Linda's Orthopedic Device Rep-less
Strategy Work? 5 Things to Know
By Laura Dyrda
