Cost containment for Employer-sponsored Surgical Redirection Programs

With new patient redirection programs, employees and dependents with a BMI over 40 cost their companies more because their surgery cannot safely be performed in an outpatient surgery center setting.

On average, in a recent report published in Benefits Pro, normal-weight employees cost an average of $3,830 per year in covered medical, sick day, short-term disability and workers’ compensation claims.

But what the article didn't address was the new trend in direct-with-employer patient contracts for cost containment and patient redirection to ambulatory surgical centers for bundled case rate surgery. When an employer or its contracted managed services company redirects a patient for a bundled and transparent surgery price to an ASC, the case usually won't be accepted for a patient with a BMI of >40 due to medically-accepted safety standards set by anesthesia.

In many cases, this restriction often causes the self-funded ERISA employer or union-sponsored health benefit program to pay a difference of over $60,000 for the same, identical surgery in an hospital setting. There's also a greater risk of post-operative complications such as deep venous thrombosis (DVT), pulmonary embolism (PE) and greater risk of post-operative infection.

Many of the surgical cases redirected these days are for orthopaedics where infection risk mitigation is critical. But when you add "fall risks" on a newly installed knee or hip implant, the fall risk compounds the infection risk because the implant has a few porous plastic parts that, if infection settles in due to a crack from a fall, the entire surgery may have to be repeated or the plastic part will require surgery to be replaced. On a patient with an ACL graft or meniscus tear, or even a shoulder repair or carpal tunnel procedure, a fall can also be devastating because the newly repaired knee, wrist or shoulder can be dislocated and new tears or graft insults and disruptions can result.

If an obese patient also has other comorbidities such as diabetes, vertigo, sudden unexpected pain from osteoarthritis in the contralateral leg or ankle or hip, fall risks compound yet again.

The financial differences are very real. At Robotic Orthopaedic Institute St George in collaboration with St George Surgical Center, in Southern Utah:

• The price of a fully-inclusive total knee replacement with a 30-year Smith + Nephew Oxinium Journey II implant is $15,985. That includes facility, surgeon, anesthesia and implant using robotic assistance and the PICO-7 negative wound pressure dressing, as well as travel coordination, take home medications, and an overnight stay for the patient, if medically necessary. Compare this to an average of $40-60,000 for a traditional hospital surgery. Yes there are deals, but it takes time to locate them, and get acceptance for the case and rarely will they be done with an expected outpatient stay. And a patient fall is not a "never event" so you'll pay for the do-over or complications.
• The price of a fully-inclusive total hip replacement with a 30-year Smith + Nephew Oxinium hip implant is $17,985. That includes facility, surgeon, anesthesia and implant using robotic assistance and the PICO-7 negative wound pressure dressing, as well as travel coordination, take home medications, and an overnight stay for the patient, if medically necessary. Compare this to an average of $60,000 for a traditional hospital surgery. Yes there are deals, but it takes time to locate them, and get acceptance for the case and rarely will they be done with an expected outpatient stay. And again, a patient fall is not a "never event" so you'll pay for the do-over or complications.
• The price of an arthroscopic ACL reconstruction with autograft is under $10,000. But the guides to set the graft are far more difficult to use in an obese person because of the girth of the knee joint. But not anywhere near that in a hospital setting.

Obese patients frequently suffer from sleep apnea, which, when coupled with post-operative opioid pain medications can exacerbate hypoxia while asleep. This condition may require constant monitoring and high-flow oxygen through a nasal canula in an inpatient setting for a few days. Hence, the value of low-opioid multi-modal pain management cannot be over-emphasized. The hypoxia could lead to other comorbidities if the obese patient is managed with post-operative opioid pain medications for other than breakthrough pain. And the opioids themselves could lead to additional problems.

None of these realities were mentioned in the Benefits Pro article in any detail to explain the depth of the contrast and comparisons when managing health benefits for obese employees. Getting weight down is critical because for every pound of weight loss, one reduces the impact on the knee by four pounds of pressure on the joint! And to bring the BMI down to <40, thousands of dollars in expense and additional risk, both medical and financial, are mitigated. The problem is, when the patient is in pain, it is difficult to exercise or even walk to reduce weight. A vicious cycle, indeed!

Want to know more about how your company or union can save money on over 450 surgical procedures in fifteen specialties for your employees and their dependents?

Call me at (800) 727 4160.

I'll guide you to providers across the nation who offer bundled case pricing, both inpatient and outpatient for surgery, physical therapy, imaging, and even behavioral health medically supervised detox programs. I have been doing this sort of work since 1993, and I work for these providers as their business development expert and assist with connecting employers, insurers and unions and their TPAs to the providers. I don't charge any hidden (or transparent) markups on their prices. You pay the provider directly and I am paid my hourly wage for my work and expertise. It would be my pleasure to assist you or your TPA or broker or agent of record as an industry resource.

About Maria Todd

Maria Todd is an expert authority on healthcare business development both in the USA and 120 countries. Leveraging 45 years of professional work experience in the healthcare industry, Maria is also the author of 23 internationally-published books on managed care and third-party payor contracting, physician employment, physician-hospital integration and alignment, HIPAA compliance, altitude physiology, and medical tourism. She brings a wealth of knowledge and diverse experience and training as a former surgical nurse, ASC administrator, hospital administrator, and a former HMO provider relations director, a health law paralegal, and a former international TPA owner-operator and revenue cycle management consultant. In the 1980s she owned a physician billing company and maintained a 98+% net collections ratio. She was also the subject matter expert to co-develop several software programs for medical travel logistics and bundled surgical price calculations (nuanced by individual surgeon, time, and for single or bundled surgical procedure(s)) and managed care contract language analysis.