Orthopedic Services: Is It Right for Your Center?

Bones, joints, muscles, nerves. What don’t orthopedic services deal with? Could you bring in more money by adding such procedures, or would that expansion reduce your bottom line and needlessly increase stress?

Orthopedics deal with the diagnosis, care, and treatment of a huge breadth of disorders that pertain to the musculoskeletal system,¹ and as active members of the baby boomer generation enter their 60s, more will need ACL repair and other orthopedic procedures.² 

Plus, the forecast for knee and hip replacement surgery suggests robust demand.³ There is reason to be optimistic about the future need of joint care, but there are concerns about meeting those needs, namely because of decreased physician reimbursement rates for reconstructive surgery over the last 15 years, and because fewer orthopedic surgeons are pursuing fellowships in reconstructive joint surgery.³ 

According to the American Academy of Orthopaedic Surgeons (AAOS), opportunities in orthopedics will be largely influenced by an aging population (which will lead to more fractures and reconstructive surgeries) and by advancements in technology.

An Overview of the Orthopedics Industry

Orthopedic-only facilities often employ two to six orthopedic surgeons, including generalists and specialists. Together they treat any combination of the following: dislocations, torn ligaments, sprains, strains, club foot, tendon injuries, pulled muscles, ruptured disks, fractures, low back pain, scoliosis, knock knees, bow legs, bunions, hammer toes, arthritis, osteoporosis, bone tumors, muscular dystrophy, cerebral palsy and unequal leg length. Generally, the larger the multi-specialty group, the more specialties are represented.³ 

Many generalists have a special interest in a specific area, but still treat most injuries or diseases of the musculoskeletal system. According to AAOS, 32 percent of orthopedic surgeons designate themselves as general orthopedic surgeons, 37 percent consider themselves general orthopedic surgeons with a specialty interest, and 31 percent consider themselves specialists within orthopedic surgery.

Typically, the services that bring in the most money are also the services that cost the most to the physician in the form of equipment and time, says Aaron Kant, spokesperson for KSF Orthopaedic Surgery Center, a four-year-old ambulatory surgery center (ASC) located in Houston.

“There’s a lot more equipment involved in a hip replacement as opposed to a cyst removal,” Kant says. “If you’re replacing shoulders or hips or knees, you’re actually having to purchase the equipment to put the hardware into a person. Anything with a replacement would be the most expensive.”

Much like replacements, spinal procedures can be lucrative, Kant says. This includes kyphoplasty (a minimally invasive spinal surgery used to treat painful, progressive vertebral compression fractures).² According to AAOS, as much as 50 percent of an orthopedic surgeon’s practice is typically devoted to medical management or non-surgical treatment of injuries or disease, and 50 percent involves surgery.

If an ASC staff does not perform orthopedic services, but wants to add orthopedic services onto what they already do, it would not necessarily be a major undertaking, Kant says.

“A lot (of the decision) would depend on the type of physicians you have,” Kant says. “You would need an orthopedic surgeon, of course. There are so many things that need to be done to open any surgery center and you would already have (a lot of that work finished).

“You’d already have your anesthesiologist, and some of the staff you could use already, but you’d have to retrofit your rooms,” Kant says. “There is certain equipment and tools that you need for orthopedic surgery that you wouldn’t need in other surgeries.”

The difficulty of adding orthopedic services onto an existing center would depend on the extent and amount of procedures covered, Kant adds. In the relative area of Kant’s Houston ASC, three other orthopedic-only facilities opened in the last eight years, but there is still enough business, Kant says.

Determining Need

When a facility owner or administrator is considering adding any type of service, they should ask themselves certain questions, and should be serious about getting thorough answers.

The first question (and one that requires thorough research) that must be asked is whether there is sufficient need for the service that is under consideration, says Ken Rabinoff-Goldman, DC, CCRD, CDN, vice president of Buxton’s HealthCareID division. Buxton specializes in customer analytics for concepts ranging from retail to healthcare. Its HealthCareID program analyzes millions of consumer records (medical and non-medical) to identify prospective patients, ideal facility locations and characteristics.

When determining whether to add orthopedic services, always take into consideration not only the current reimbursement environment but also the likely future environment, Rabinoff-Goldman says.

“If a new cash-based service is being considered, are the economics necessary to grow and sustain that service there now and will they be there for the foreseeable future?” he recommends asking. “Is the proposed physical facility or new unit one that can change over time as circumstances change? That is to say, many types of services are very difficult to displace once they are built (surgery, imaging, for example). So, it is important to (put) these types of services in places where they will not hinder future growth.”

There is no reason why a facility staff can’t branch into orthopedics, Kant says.

“As long as you have the proper staff and physicians and nurses, I don’t see why any medical facility couldn’t do as much as they wanted to, as long as they continued to make sure that the staff and physicians were trained in those areas,” he adds.

Prospective Patients

Patient base is an obvious factor in determining whether a facility should expand.

“First and foremost, is there a high enough concentration of core potential patients for the proposed service living within an appropriate drive-time trade area (the average distance that a patient is likely to drive for that particular service)?” Rabinoff-Goldman asks.

Next, the potential business expander should ask if that core population will be growing five, 10, or 15 years down the line, or are there changes in the community that will reduce the need over time? Rabinoff-Goldman recommends asking if the investment required is likely to have a reasonable pay-back in a reasonable timeframe.

The most precise analysis is based on “psychographic patient profiling” which most ideally uses the provider’s own patient records as the basis for the profile. It evaluates the profiles of the “best” patients who have received the particular service in the past, Rabinoff- Goldman says.

“The application of that profile to a household database determines if there are enough potential patients to make the potential new service profitable,” he says. “The methodology used would apply to virtually any specialty.

The only significant additional consideration would be if the service proposed is intended to be cash-based, which might then require additional demographic analysis to determine which segments are financially capable of paying for the service.”

Education

According to the AAOS, orthopedics is an extremely competitive field. There are approximately 20,400 actively practicing orthopedic surgeons and residents in the United States.¹ To be certified as an orthopedic specialist by the American Board of Orthopaedic Surgery, a candidate must complete an orthopedic residency, practice orthopedic surgery for two years and pass written and oral examinations offered by the Board.

Once you have brought such an orthopedic surgeon (or a whole team) on board, there are several ways to make certain that they continue their education. This is particularly important because orthopedic procedures, implants and equipment are advancing rapidly. Several companies include educational services with or without purchase of their products.

Arthrex, Inc., for example, provides products and educational services for orthopedic surgeons in areas that include shoulder, knee, hip and small joint procedures. The company specializes in minimally invasive orthopedic surgery and provides courses in knee arthroscopy, shoulder arthroscopy, hip arthroscopy, foot and ankle, hand and wrist procedures, etc.

Minimally invasive spinal surgery is evolving quickly, and to help meet the need, Richard Wolf Medical Instruments Corporation educators provide courses, labs and workshops where doctors can learn innovative spinal procedures taught by other doctors.

Zimmer, Inc. (which provides orthopedic surgical products) offers the Zimmer Institute, which trains surgeons on minimally invasive procedures. The training environment in Warsaw, Indiana, is 15,000-square-feet and includes hands-on laboratory areas. More than 2,000 surgeons have attended the Zimmer Institute for training.

At Smith & Nephew Orthopaedics (which provides replacement systems for knees, hips and shoulders, etc.) a “MOBILAB” mobile training center goes directly to surgeons all over the United States.

“We are providing an opportunity for doctors to train on industry-leading products in their own backyard,” says Victor Rocha, director of media relations for Smith & Nephew, Inc. “The smaller setting allows for more personalized training and this investment has already been met with great enthusiasm from surgeons.”

The MOBILAB unit is a tractor-trailer that expands to a six-station operating-roomstyle training facility that can accommodate up to 24 surgeons at one time. Surgeons can also use MOBILAB’s facilities to perfect new techniques and practice with systems before a live surgery, without having to travel. Smith & Nephew also offers more traditional courses for surgeons and their staffs.

The orthopedic surgery industry is likely to continue growing, but whether your facility is part of that growth is a very individual decision that depends on demographics, need, available capital, and other resources. 

References 

1. The American Academy of Orthopaedic Surgeons: www.orthoinfo.aaos.org/topic.cfm?topic=A00388    
2. www.acius.net/Conferences/Upcoming?view=overview&id=51  
3. www.orthosupersite.com/sectionContent.asp?sid=50  

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