Case Study

How Two Orthopedics Programs Shifted Joint Replacements to ASCs

20 Minute Read

Overview

The challenge

Hospital-based total joint replacements (TJRs) are increasingly at risk as payers expand ambulatory surgery center (ASC) coverage and physicians become more interested in performing cases at freestanding sites. Hospital-based orthopedics programs face rising pressure to adapt to this shift to avoid leaking these high-revenue procedures to competitor ASCs. For some hospitals, physicians’ desire to shift care out of the hospital puts physician relationships at risk as well.

The organizations

  • Virtua Health is a five-hospital health system based in southern New Jersey. It’s Joint Replacement Institute operates a hospital-physician joint venture ASC total joint replacement program.
  • The Bone and Joint Institute of Tennessee (BJIT) is a joint venture partnership between a 16-physician orthopedic practice group and Williamson Medical Center, based in Franklin, Tennessee. BJIT’s freestanding orthopedic center, which includes an ASC, opened in 2018.

The approach

Virtua and the BJIT avoided leaking joint replacements to competitor ASCs by proactively establishing their own hospital-physician ASC joint ventures. The two organizations leveraged strong stakeholder alignment and success at hospital-based same-day discharge to shift clinically eligible cases to the ASC—despite the financial challenges the freestanding model poses.

The result

Despite elective surgery cancellations due to Covid-19, Virtua and BJIT have seen rapid growth in TJR volumes since they established their ASC TJR programs. Their focus on outpatient care has strengthened quality and patient experience, enabling them to retain their volume and compete for new patients and payer relationships.

 

Approach

How Virtua and BJIT built their freestanding TJR programs

Virtua and BJIT each made a strategic trade-off in shifting proactively to the ASC setting: they deprioritized maximizing per-case revenue in favor of retaining volumes within the system. This shift to outpatient sites offers little room for financial or clinical error. As a result, program leaders at both organizations had to work closely with finance, physicians, and other clinical staff to enable the shift out of the hospital.

 

The three keys to success

Virtua Health and the Bone and Joint Institute of Tennessee each adhered to three keys to success as they implemented this strategy:

  • Key

    Prove success at same-day discharge in the hospital setting

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  • Key

    Clarify goals and scope of partnership with physicians

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  • Key

    Account for costs before entering payer negotiations

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Results

BJIT and Virtua Health have both rapidly scaled up their ASC joint replacement presences, enabling a greater share of patients to reap the quality and patient experience benefits of freestanding surgery.

  • Volume growth: Virtua Health grew its ASC-based joint replacement volume by 80% between 2019 and 2020—despite over two months of elective surgery suspension due to Covid-19. At present, 29% of Virtua’s joint replacements are performed in the ASC setting, including 76% of its outpatient joint replacements.
ASC joint replacement volume

  • Quality: No joint replacement patients in Virtua’s ASC were transferred to the hospital, and 0.4% visited the emergency department (ED) within 72 hours of surgery in 2020. BJIT, meanwhile, is accredited by the Joint Commission and has been ranked a top 10% provider for joint replacement in Tennessee by CareChex.

Both organizations are also taking advantage of their progressive freestanding TJR programs to expand their market presence. Virtua Health has begun capturing patients from across its regions who are traveling to its ASC for care. And BJIT has engaged with major employers in its market to pursue direct-to-employer contracting for joint replacement.

0.4%

Of Virtua’s ASC joint replacement
patients visited the ED within 72 hours
of surgery, 2020 

0%

None of Virtua’s ASC joint replacement
patients were transferred to the hospital
in 2020

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