Value Following Shoulder Arthroplasty

Dear CSS Members and Collogues:

Enclosed are two important articles which deal with the question of value following shoulder arthroplasty. The articles by Jawa and colleagues points out that the most expensive resource during an episode of hospitalization for joint replacement is the implant. The article by Farley, Wagner and colleagues considers the value of volume and outcome with a longer time period. One is a TDABC analysis of cost over a short period of hospitalization and the other is an analysis of complications and readmissions over a longer period following surgery and it does not consider the cost analysis of such complications. It is important to understand the difference between the two. I am also enclosing the discussion curated from our WhatsApp group, so it is not lost in all of the discussion. Finally, please note the link at the bottom of this discussion to our article entitled “Building a Bundle on Value” published in the HBR Blog. This article considers outcomes and cost over 1 year following an arthroscopic rotator cuff repair. It highlights the importance to consider both cost and outcome in analysis of value.

Kind Regards,

“JP” Warner

Founder, CSS

Eric Wagner:

Dr. Jawa and Warner's study is an excellent example of TDABC and ways we hopefully can innovate going forward to makes things more efficient, cost-effective, and help everyone recover from this difficult time. I am attaching an article we recently just published supporting the consolidation of shoulder arthroplasties at high volume hospitals (>70/yr.), centers, and surgeons as a mean to not only reduce costs, but also various costly complications. We also are finishing a clinical study on the use of Exparel in shoulder arthroplasties. Although it appears to reduce POD #1 pain, there are no differences in total opioids taken, length of stay, outpatient vs inpatient surgery. And one has to ask is the added cost worth the potential early pain relief, without other added benefits. Hopefully, more studies from leaders like Dr. Warner and Jawa will emerge from this crisis and help us to efficiently and effectively evolve and be better as a group.

One thing potentially to consider as we emerge from this crisis and start doing cases, anything we can do to continue to push towards outpatient arthroplasties will be worthwhile. In addition to the Exparel study, we are finishing an oral steroid RCT that has shown a lot of promise at reducing pain and opioids consumed. Synergistic multimodal options such as these could prove to be quite worthwhile, even if a small additional cost, if they allow for more and more cases to be done without taking hospital beds and the added inpatient costs.

Ron Navarro:

Thanks, Eric, for your assessment of need for expensive items like exparel when things like multimodal can achieve home recovery wo the expense. And thanks for citation 40 in your RTSA experience article which we did in part at the urging of JP to me to perform many yrs. ago during and AAOS meeting. Full circle; thx again JP.

JP Warner:

Very nice work Eric et al. It always troubled me a bit that our (Jawa's article) made the case that the implant was the biggest cost driver. In fact, Porter defines "Value" in three Tiers: 1. The Outcome; 2. The Process and 3. The Durability. When one looks only at the day of surgery as the "Episode of care" there is a risk to equate "value" for that day with the overall "value" to the patient over time. I wrote on "Warner's Corner" blog on the Codman Shoulder Society Website about this concept of Volume vs Value. It is intuitive that higher volume surgeons provide more value over low volume surgeons in performance of complex cases. Here is the link to the article published on this topic and our commentary: https://www.codmansociety.org/single-post/2018/05/01/Value-Based-Shoulder-Care-Volume-vs-Value . So, it is the lack of transparency on outcomes that has created an environment where pre- and post-Obamacare, the insurance payment is for the service and not for the outcome or the quality of the service, both of which figure into the overall Value Equation.

Bassem Elhassan:

I totally agree JP.

I was wondering whether we can come up with an equation or formula that we key in all important factors to come up with more accurate Value.

I think this is a good question for Derek Haas of Avant-Garde Health to address as it is consistent with how we approached building a bundle with a warranty on value. Larry Higgins and I went through this exercise which gave a warranty on outcome of one year and also managed costs for patient's undergoing an arthroscopic rotator cuff repair. We did so in collaboration with Bob Kaplan at HBS and with Harvard Pilgrim Healthcare, a local insurance company. This was proposed as a demonstration project for the MGH. It was turned down. The link to this study is here: https://hbr.org/2013/10/how-to-design-a-bundled-payment-around-value/ .

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