Learn about the market forces driving value-based care in orthopaedics (ASCs, bundled payments), and the clinical outcomes and economic impacts imparted by the use of value-based implants.

2. The Role of Value Based Implants
in Orthopaedic Trauma
Peter L. Althausen, MD/MBA
Reno Orthopaedic Clinic

3. Smith & Nephew
Research Support
The Orthopaedic Implant Company (OIC)
Stock or stock options in a company
Journal of Orthopaedic Trauma
Reviewer
Journal of AAOS
Reviewer
Disclosures

4. What are High Value Implants
High Value Implants Conventional Implants
Historically, medical device companies have used innovation
as means of differentiation and driving up costs.
In the orthopaedics, we’ve seen a tremendous
slowdown in true innovation.

5. What are High Value Implants
High Value Implants Conventional Implants
High Value Implants Conventional Implants
Under the hood they are the same.

6. High Value Trauma Products
• Cannulated Screws
• Nails
• External Fixation
• Anatomic Plates and Screws

7. Healthcare is the single greatest expenditure of most
developed nations
Total U.S. cost $2.9 trillion
17.4% of U.S. GDP
3 top expenditures
Arthroplasty ($7.2 Billion)
Cardiac Surgery ($6.4 Billion)
Hip Fractures ($4.7 billion)
US Healthcare Costs

8. Changing Reimbursement

9. Market Forces are Changing
Ambulatory Surgery Centers
• Many are physician owned
• Increased indications (joints, trauma, spine)
• 80% of all orthopaedic cases will be done in an ASC by 2020
• Development of Orthopaedic Urgent Cares will further
drive fracture care into ASCs
Surgeon Alignment
• Service line re-investment
• Gain-sharing
• Co-management agreements
• Hospital employed physicians
Healthcare Policy
• Bundled Payments (Government and Private Payors)
• CJR/SHFFT

10. Trauma Landscape
• Fastest growing area of orthopaedics
• Device market: $6.3B in 2016 to $14B in 2028
• Non-elective. Trauma patients will always
need surgery.
• Patients cannot be turned away
by EMTALA Laws.
• Most underinsured/uninsured segment
of orthopaedics.
• Need to be treated in the most
economical means possible.
• Must have high quality implants to
prevent complications.

11. Trauma Landscape (Cont.)
• Hip fracture bundles are here with BPCI,
but more trauma bundles will come
• As more trauma and fracture care moves
to ASCs and outpatient, hospitals will be
stuck with most costly patients
• Perfect storm is here, as surgeon owned
orthopaedic urgent cares will be driving
more trauma business to their ASCs
• Both ASCs and hospitals are now
seeking high value trauma implants

12. Gainsharing/Co-Management
Co-manangement
• A relationship between a group of physicians and a hospital
where both parties are actively involved in managing a
specific hospital service line
• Physicians receive a portion of service line revenue (3-5%)
• These agreements are legal
Gain-sharing
• If I, the physician, assist you, the hospital, in saving money,
then you will share some of the savings with me
• This can be more difficult to set up, so the
government has stepped in

13. Bundled Payment for Care Initiative
• The latest cost saving program developed by CMS
• Legalized form of gain-sharing
• Institutions and orthopaedic surgeons can
directly benefit from cost savings
• 4 models exist
• Physician eligible for 150% of procedure
if beats target
• Incentive payments made to group from the
difference between the claims paid by CMS
during the 90-day period versus the target
price set by CMS

14. Scientific Support
CONCLUSIONS:
“Hospital implant costs were decreased
significantly without any associated increase
in complication rate or change in
radiographic outcome.”

15. My Experience
• Average of 60% savings
• 30% increase in cases at ASC
• Saved of $850K in implant costs over a
12-month period at local hospital
• BPCI Program saved hospital over $1.9M
• BPCI Program generated over $1.2M for practice
• No increase in complication rate
• Decrease in OR time
• Similar Clinical Outcomes

16. Conclusion
• Due to market forces, High Value Implants are
here to stay
• Savings are significant to Patients,
Hospitals and ASCs
• Physician mindset is changing due to new
innovations in reimbursement, rise of ASCs
and orthopaedic urgent cares
• Physicians are aligning with their institutions
to deliver better value in healthcare due to
gain-sharing and co-management