Trends in Total Joint Replacement ASCs need to prepare for tremendous outpatient growth in the sector BY AMANDA OLDEROG

An aging population and high obesity rates con- tinue to increase the preva- lence of osteoarthritis and, subsequently, demand for

joint replacements. In the next decade Sg2 projects 84 percent growth in hip and knee joint replacement surgery. Despite increasing demand, inpatient (IP) growth will slow substantially due to payer and patient price sensitivity, technology advances, improved pain management efforts and surgeon prefer- ence. Outpatient (OP) growth, however, will soar—57 percent of all nonfracture knee and hip replacements will be per- formed in the OP setting by 2028. Capi- talizing on the opportunity will require provider systems to redefine the total joint replacement (TJR) experience via efficient, dedicated ambulatory spaces in both the hospital outpatient department (HOPD) and ASC settings. In short, cap- turing tremendous TJR opportunity calls for an optimized ambulatory experience. Sg2’s forecast for total joint replace-

ment surgery considers the short- and long-term implications for the strategic planning process. In the short-term— less than five years—the subset of young, healthy patients who are appro- priate—even eager—candidates for OP procedures will continue to rapidly grow as nearly half of all procedures today are performed on patients younger than 65 years of age. As once inpatient-only surgical procedures rapidly shift to less costly OP sites, comprehensive systems must have a strategic plan to manage the transition and must clearly identify the appropriate patient for IP, ASC and HOPD sites of care as robust demand for orthopedic services will create sys- tem-wide capacity challenges.

10 ASC FOCUS MAY 2019 |

IP and OP Hip and Knee Replacement Forecast, US Market, 2018–2028

Volumes Millions

2.6 1.8 1.1 0.2

2018 Millions

2.5 2.0 1.5 1.0 0.5 0.0

5-Year +25% -7% -6% 2023 2028 10-Year +84%

■ Sg2 IP and OP Forecast ■ Sg2 IP Forecast ■ Sg2 OP Forecast

Note: Analysis excludes 0–17 age group. Inpatient forecast indicates discharges; outpatient forecast indicates volumes. Discharges and volumes are for Osteoarthritis CARE Family only and include primary and revision hip/knee replacements as well as partial knee replacements.

2018 2020 2022 2024 2026 2028 43%

85% 15%

77% 23%

69% 31%

60% 40%


As organizations look further out to the future, the OP shift of largely elective procedures will require careful resource planning (e.g., facility and staffing capac- ity) to account for the more medically complex patient population remaining in both the IP setting as well as on- and off-campus ambulatory spaces. With new market players increasingly vying for high-revenue commercial volumes, access, convenience, experience and price will matter more than ever. High- deductible health plans, narrow networks and episode-based contracting (e.g., bun- dles, reference-based benefit designs) will incent patients to choose facili- ties based on value, forcing providers to compete on price and clinical outcomes across all settings.

48% 57%

Sources: Impact of Change®, 2018; HCUP National Inpatient Sample (NIS). Healthcare Cost and Utilization Project (HCUP) 2015. Agency for Healthcare Research and Quality, Rockville, MD; OptumInsight, 2016; The following 2016 CMS Limited Data Sets (LDS): Carrier, Denominator, Home Health Agency, Hospice, Outpatient, Skilled Nursing Facility; Claritas Pop-Facts®, 2018; Sg2 Analysis, 2018.

Developing Your Outpatient Joint Replacement Offering As consumer and provider demand for outpatient options increase, organiza- tions must prioritize the development of a comprehensive outpatient total joint pro- gram. Creating this new offering requires collaboration among surgeons, service line personnel and administrators. Pro- grammatic development should begin with a comprehensive market assess- ment to determine which patients may transition to an off-campus setting. After developing a comprehensive outpatient joint replacement offering, programs should maximize clinical performance and operational efficiency to best posi- tion themselves for overall care value.

The advice and opinions expressed in this column are those of the author and do not represent official Ambulatory Surgery Center Association policy or opinion.

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