Category Archives: Case Studies

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LANDING: Aetna Georgia Successfully Driving Reduction in Cost of Care

Aetna Georgia Successfully Driving
Reduction in Cost of Care

Working together with IPG to Shift Performance of Total Joint, Spine
and other High Acuity Procedures to an optimal Cost and
Quality Setting for their Members.

In this case study, we will tell you how Aetna, specifically the Aetna-GA market worked successfully with IPG, in conjunction with Kearny Street Consulting, Pinnacle Orthopaedics and several of their leading ASC partners to implement a targeted plan to shift outpatient procedures to an optimal cost and quality setting.

MARKET OPPORTUNITY

Health plans are faced with finding new ways to contain medical expenses on behalf of their membership. One key area driving those expenses is surgical procedures, more specifically those surgeries requiring an implantable device, such as knee replacement and rotator cuff surgeries just to name a few.

Not only has the utilization of those procedures gone up, but so have the relative costs. US demand for implantable medical devices is forecast to increase 7.7% annually to $52 billion in 2015, with orthopedic implants forecast to rise 8.8% annually. The spinal surgery device market is expected to grow at a Compound Annual Growth Rate (CAGR) of 4% from $6.5 billion in 2011 to $8.7 billion in 20181.

In addition, a mere 15% of implant procedures are performed in an ambulatory surgery center (ASC) outpatient setting. On average, there are over 2,000 unique Site of Care eligible procedures and almost 500 implant-related Site of Care procedures capable of being performed in an ASC environment2. Recently, more complex procedures such as total joint replacements and spine procedures are safely and more affordably being performed in ASCs. However, due to fee differentials, many of these procedures are redirected away from an ASC location to hospitals or HOPD’s. The higher cost associated with the procedure being redirected away from ASCs are passed onto the health plan, employers and members.

“The IPG-Pinnacle model is a great success story that we are replicating across Georgia and other Aetna markets to promote the appropriate coverage and reimbursement structure that supports eligible procedures, like total joints and spine cases to be delivered in the optimal cost and quality setting. Working with IPG allows us to identify those eligible facilities, surgeons and procedures that can be done in a more affordable setting thereby helping us manage our surgical costs to the benefit of our members.”

Alfred Ross
Director of Network Management
Aetna

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CASE STUDY: Aetna
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LANDING: Pinnacle Orthopaedics, Aetna and Kearny Street Consulting

Pinnacle Orthopaedics, Aetna &
Kearny Street Consulting

Working together with IPG to Enable Performance of
Total Joint & Spine Procedures in an Optimal Cost and Quality Setting.

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Payer Reimbursement

Procedure coverage and reimbursement for higher acuity procedures

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Procedure Increase

Conservative estimate of 20+ new
high acuity cases annually (1-2 per month)

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Increased Margins

Significant increase in revenue and profit margins ($2,500-$3,500 per case)

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More Profit Less Outlay

Increased profitability without the need for upfront cash outlay

MARKET OPPORTUNITY

There was a time when procedures such as total joint replacements were thought to be too complex and risky to be performed in ambulatory surgery centers (ASCs). Today, those facilities have proven that with a highly trained surgical staff, a well-thought-out perioperative plan, and a motivated patient, these procedures can be done successfully in an ASC – and for about half of what they would cost in a hospital.

The primary obstacle that most ASCs like Pinnacle Orthopaedics face is getting the right reimbursement for the procedures to make them viable revenue sources. Pinnacle was initially out-of-network, and the majority of their contracts did not have a provision for implants. This limited the number of cases they could take to the ASC.

In this case study, we will tell you how Pinnacle Orthopaedics worked successfully with IPG, in conjunction with Aetna and Kearny Street Consulting, to enable their physicians to perform total joint replacement and other more complex surgical procedures at their facility.

“The IPG-Pinnacle model is a great success story that we are replicating across Georgia and other Aetna markets to promote the appropriate coverage and reimbursement
structure that supports eligible procedures, like total joints and spine cases to be delivered in the optimal cost and quality setting. Working with IPG allows us to identify those eligible facilities, surgeons and procedures that can be done in a more affordable setting thereby helping us manage our surgical costs to the benefit of our members.”

Alfred Ross
Director of Network Management
Aetna

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CASE STUDY: Pinnacle
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LANDING: Surgery Center of Mount Dora

SURGERY CENTER OF MOUNT DORA

Increased profitability from Partial and Total Joint Replacement
procedures in partnership with IPG.

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Procedure Increase


4-6 partial knee replacement procedures a month
(48-72 annually)

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Increased Margins


Significant increase in revenue
and profit margins
($2,700-$3,000 per case)

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Physician Expansion


Recruitment of two additional physicians

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More Profit Less Outlay


Increased profitability without the need to outlay the cash

MARKET OPPORTUNITY


For the past several years there has been an industry push to move total and partial joint replacement procedures to the outpatient setting.

However, few providers have been performing those procedures in the outpatient setting, mainly because CMS does not currently reimburse for outpatient joint replacement. More recently, private health plans are negotiating outpatient joint replacement carve-outs for healthier patients, for several reasons, but most importantly due to the cost differential in site of service, typically 3.5 to 4 times higher in an Inpatient setting.

Outpatient total joint procedure replacement volumes are expected to more than double over the next decade. The challenge for performing these procedures in the outpatient setting has been getting the right reimbursement, clinical protocols, capital outlay, equipment and trained staff to perform the procedures.

“Mt. Dora’s partnership with IPG has allowed facilities like us to negotiate coverage and reimbursement through their health plan partners to perform these partial and total joint and other procedures. Not having to outlay the cash for the procedure has given us the financial viability to be able to perform these procedures at affordable rates, subsequently leaving our physicians and patients happier and more satisfied.”

Juan Uson, RN, BSN (Administrator/Director of Nursing)
Surgery Center of Mount Dora

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CASE STUDY: Mt. Dora
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