I am hopeful the Centers for Medicare & Medicaid Services' (CMS) proposal to bundle payments for hip and knee joint replacement surgeries will become operational by early next year. But I wish the plan also scrutinized the number of such surgeries that are currently taking place in the United States.
When CMS announced the Comprehensive Care for Joint Replacement Model initiative earlier this month, it noted that for the $7 billion a year it spends on about 400,000 of the procedures, "the rate of complications like infections or implant failures after surgery can be more than three times higher at some facilities than others, increasing the chances that the patient may be readmitted to the hospital. And, the average Medicare expenditure for surgery, hospitalization and recovery ranges from $16,500 to $33,000 across geographic areas."
CMS proposed bundled payments that would stretch the episode of care to 90 days after discharge in order to ensure better quality. A total of 75 geographical areas encompassing some 800 hospitals would participate in the initiative.
But what the initiative will not do is examine why the number of such joint replacement surgeries performed in the United States has surged. Less than a decade ago, there were 675,000 such surgeries being performed annually, according to WebMD. But statistics from the Centers for Disease Control and Prevention say that has grown to about 1.05 million surgeries by 2010--an increase of about 50 percent. The American Academy of Orthopaedic Surgeons forecasts continued rapid growth of the procedures for at least the next decade.
For example, many people in their 40s or 50s want the surgery to preserve their active lifestyle. They may wish to continue hiking, climbing or engaging in some other extreme sports. But should an orthopedic surgeon replace a hip or knee joint just to retard the natural aging process, or only when a patient is experiencing too much pain to have a normal freedom of movement?
Of course, this goes to freedom of choice. A study by the University of Massachusetts Medical School published last year suggested that the longer one waits, the less improvement they will experience in motion. But that's also balanced by the risk of undergoing general anesthesia, the risk of infection, the risk of a failed joint, and a variety of other risks that can drive up the total cost of care by driving up demand.
And the volume-to-value movement also does not take into account that most U.S. doctors operate within an entrepreneurial model. For most American surgeons, the more patients on which they operate, the more money they will earn. And orthopedic surgeons are among the most highly-paid physicians in the United States. They earn around $450,000 a year on average; those who specialize in spinal procedures can take home nearly double that amount.
That's a big paycheck, but a successful orthopedic surgeon may have a seven-figure mortgage to pay down, along with private school tuition for their kids. Those two items could run $15,000 a month combined before car payments, vacations, groceries and other living expenses are tallied. Are those expenses lurking in the back of a surgeon's mind as they counsel their patients on hip replacements over analgesics or physical therapy? It's likely to some degree.
That the U.S. entrepreneurial spirit predominates in healthcare delivery is among the reasons why it's twice as expensive as any other developed nation in the world, while outcomes often do not match the expenditures. Many doctors elsewhere in the world are paid a salary as opposed to being compensated on a piecework basis. They may earn a little less, but that kind of compensation structure means it's also more likely that surgical procedures aren't being performed for volume's sake.
So, while the CMS initiative is a good idea, and it will likely cut Medicare costs for joint replacement surgeries, it won't make a dent in the volume of such surgeries being performed. As long as it remains a semi-elective procedure, a significant percentage of such procedures will be unnecessary, and costs will continue to rise. - Ron (@FierceHealth)
CMS to transform hip and knee replacement payment model
U.S. lags behind in health outcomes despite rising spending, costs