Achieving Better Margins in the Surgical Unit

The U.S. spends more money on some surgical procedures than anywhere in the world. Much of this has to do with the fragmented, fee-for-service system of healthcare that America has grown to endure.

With payment penalties and reimbursements increasingly tied to measures of quality, satisfaction and cost performance, surgical service line margins are compressing. Outpatient surgical centers are becoming more prevalent as providers pursue new care delivery models. These new models of care re-engineer care processes to bring cross-continuum providers together to deliver a total care approach for patients.

One group doing this particularly well is a collaboration of hospital administrators, anesthesiologists and surgeons from community hospitals, academic medical centers and physician groups that are implementing the Perioperative Surgical Home (PSH) model of care.

The PSH Learning Collaborative engages specialists to improve internal efficiencies, and reduce length-of-stay (and thereby increase bed turnover), 30-day readmissions and hospital-acquired conditions. To improve, members are implementing evidence-based protocols, reducing care variation and standardizing supply chain processes. The PSH approach includes a strong emphasis on patient education, rigorous process standardization and evidence-based clinical care pathways, as well as robust coordination and integration of post-operative care.

The PSH Model

The PSH is an innovative model of care driving meaningful and lasting change in lowering perioperative care costs, while supporting better margins, and improving outcomes and experiences for patients.

Unlike traditional surgical care management, which requires little pre- and post-procedure planning and often varies greatly across organizations, the PSH model guides patients through the entire surgical experience, from the decision to undergo surgery to 30 days post discharge and beyond. The physician-led model is an interdisciplinary, team-based system of coordinated care that is designed to achieve the quadruple aim of improving health, increasing provider and patient satisfaction, and reducing the cost of care.

The PSH model also overlaps and aligns with the goals of population health management and a variety of alternative payment models (APMs), such as the Centers for Medicare & Medicaid Services’ (CMS’) Bundled Payments for Care Improvement (BPCI) Advanced initiative, Medicare Accountable Care Organizations (ACOs), the Comprehensive Care for Joint Replacement (CJR) model, Medicaid Bundled Payment Programs, as well as commercial ACOs and bundled payment models.

Additionally, the PSH is approved for the Quality Payment Program’s Merit-Based Incentive Payment System (MIPS) Improvement Activities (IAs). The PSH care coordination activity has also received the rare distinction of being eligible for the Advancing Care Information (ACI) bonus.

The PSH Learning Collaborative

In today’s healthcare environment, it is imperative for organizations to seek strategic, systematic processes for transforming care from volume to value. Launched by Premier® and the American Society of Anesthesiologists (ASA), the PSH Learning Collaborative brings together leading institutions from across the country to share best practices and lessons learned that optimize the surgical process in an effort to advance quality, improve patient experience, elevate physician satisfaction and reduce costs.

Over the last four years, more than 100 organizations have worked with Premier and the ASA to identify which service line to launch a PSH pilot and start the process of performance improvement. In doing so, members have advanced their bundled payment and ACO goals, and generated significant returns on investment by reducing episode of care costs, length-of-stay, readmissions and skilled nursing facility usage.

PSH Collaborative members use implementation toolkits, pathways, protocols and templates that have been successfully implemented at other PSH member organizations, along with educational sessions and strategies on how to monetize the PSH model. They also work with dedicated PSH experts to create and achieve focused improvement goals.

Individual results show that participants in this collaborative have improved clinical outcomes in a number of ways.

Cost per Case Reduction

• A Southeast regional center reduced total joint cost per case by $1,816 and colorectal cost per case by $1,046.
• A West Coast academic center reduced operational costs for laparoscopic nephrectomies and open nephrectomies cases by 50 percent.
• A Southeast community hospital demonstrated an average savings of more than $4,000 per orthopedic case.

Post-Discharge Care

• A West Coast academic center increased patients discharged to home by 38 percent.
• A Southeast academic center increased patients discharged to home by 18 percent.
• A Southeast community hospital reduced admissions for orthopedic patients to SNF by 22 percent and admissions to home health by 34 percent.
• A Midwest academic center reduced readmissions for orthopedic patients by 50 percent.

Through the PSH Learning Collaborative, healthcare organizations are better managing care and reducing complications, readmissions and costs, while providing their patients with speedier recoveries.

Looking for ways to simultaneously advance the surgical field and your transformation to value-based care?

Listen to our webinar on how the PSH Learning Collaborative can help hospitals engage specialists and address blind spots in care, apply here or contact us.