A Role for Digital Health and AI in Outpatient Orthopedic Surgery

By Alan Young MD, MBA, Head of Clinical Partnerships and Gina Della Porta DHSc, Director of Research, KelaHealth.

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Demand for Joint Replacements in Orthopedic Surgery Continues to Increase   

Approximately 680,000 total knee arthroplasty procedures were performed in 2014 in the U.S., with an average cost to patients of $30,000 USD. According to a recent analysis, the number of total knee replacements  performed increased 119% between 2000 and 2014; by 2030, the number of total knee replacements is projected to increase by as much as 147%, which would equate to 1.68 million procedures each year1. The global orthopedic joint replacement market size is predicted to reach USD $26.9 billion by 2027, which represents a compound annual growth rate (CAGR) of 7.6%.

 

Joint Replacement Surgery Volume in Ambulatory Surgery Centers (ASCs) is Rising

According to Becker’s ASC Review, there are over 5,000 ASCs, around 30% of which offer outpatient joint surgery; the number continues to grow. In 2020, 32% of joint replacements were done in the outpatient setting, and this is estimated to hit 50% by 2026. Several studies have estimated the potential savings of moving total joint replacement procedures to ASCs is substantial, with the cost of treatment being about 40% less in a typical ASC when compared to inpatient care for the same procedure. The estimated average operational cost overall for joint replacement surgeries (e.g. hip, knee, ankle, shoulder) per patient was about $12,000 for the ASC and almost $20,000 for the same procedure in the hospital. However, this does not account for the increased variable costs associated with avoidable complications or unplanned readmissions.  

One of the keys for continued success in outpatient surgery is patient optimization. In other surgical fields, such as vascular surgery, artificial intelligence has already been demonstrated to provide value in optimizing patients to align patients with the best individualized treatment strategies2. KelaHealth offers a scalable risk assessment engine to support early optimization efforts for each individual patient based on a customized risk profile using machine learning algorithms. 

 

The COVID-19 Pandemic Disrupted Orthopedic Surgeries and Impacted Revenue

A recent publication by McKinsey & Company looking at the global impact of the COVID-19 pandemic on the healthcare industry reported that nearly 83.5% of orthopedic procedures in the U.S. have been delayed, postponed, or canceled since the COVID-19 outbreak, as they are considered to be elective and non-essential. While many large, prominent health systems report a resumption of normal surgical volumes, some hospitals and surgery centers are still struggling with backlogged cases and loss of revenue. Given the revenue and expense associated with each joint replacement surgery, any significant shift in patient acquisition or loss has a significant financial impact. 

 

Updates to U.S. Centers for Medicare & Medicaid Services (CMS) in 2021 Include Additional Coverage for ASC Procedures

In 2020, CMS removed total hip arthroplasty (THA) from the inpatient-only list of surgical procedures and added total knee arthroplasty (TKA) to the ASC-covered procedures list. This signalled a clear trend to identify lower-cost outpatient settings to perform surgeries previously considered appropriate only in the hospital setting. For calendar year 2021, CMS added eleven procedures to the ASC-covered procedures list, including more total joint replacement procedures, such as shoulder arthroplasty3. Joint replacement procedures, which are generally considered elective and tend to have a larger commercial payor mix, have been a profitable source of income for hospitals. The fiscal burden of joint replacements on the Medicare program is high. Along with other rising costs, joint replacement costs threaten program solvency; as the longevity of seniors increases, some patients begin to outlive their first joint replacement and need a second procedure later in life. Moving surgical care that can be performed in an ASC to the outpatient or same-day setting, rather than the hospital, will continue to impact the future of Medicare. While commercial payors have not fully embraced the same approach as CMS, it is a trend that started before the current pandemic and has only accelerated with the shift towards safer outpatient procedures. Many commercial payors are aggressively transitioning to value based care (VBC) payment contracts and Cigna, Humana, Anthem and Aetna have shared plans to shift to a majority of VBC contracts over the next five years. 

 

Recognition of ASCs as Viable Lower-Cost Options: Insights from the Orthopedic Value Based Care (OVBC) 2021 Conference 

The virtual OVBC 2021 Conference on April 9, 2021 highlighted the importance of value-based care in orthopedic surgery, including the potential for AI to reduce costs and improve safety. OVBC 2021 featured presenters from leading hospitals in orthopedic care, including the Hospital for Special Surgery (HSS), which has been ranked as the #1 orthopedic surgery hospital in the United States by U.S. News and World Report for over a decade, and NYU Langone Orthopedic Hospital, which is #4 in the 2020-2021 rankings. Dr. Joseph Zuckerman from NYU Langone and Justin Oppenheimer from HSS shared their perspectives on the significant shift towards outpatient ambulatory surgery centers (ASCs) accelerated by both the pandemic and by patient demands5

With the advancement of technology, analytics for patient selection, and optimization protocols, there is considerable evidence to support outpatient procedures as safe and effective options. Numerous factors will influence the magnitude of the shift to outpatient, including patient demographics (younger, healthier candidates), market growth of ASCs (number of locations, independently owned), surgeon practice patterns (larger specialty groups) and the payor and regulatory environment (as discussed). 

 

KelaHealth’s Approach Aligns with Current Strategies at Top Orthopedic Hospitals

At the OVBC 2021 conference, Dr. Bryan Kelly, Surgeon-in-Chief and Medical Director of HSS, shared that HSS has achieved fewer complications, surgical site infections, and readmissions in comparison to other national leaders. Like KelaHealth, the HSS approach to case selection focuses on selection of the right patient, for the right surgery, at the right time for optimal outcomes. 

KelaHealth is positioned to use insights and predictions from data science models at the point of care to augment a surgeon or clinician’s clinical decision making. KelaHealth’s data-driven approach predicts which patients and surgeries are optimal candidates for the outpatient setting.  

With support from a National Science Foundation (NSF) grant award, KelaHealth is optimizing its surgical prediction platform in orthopedic surgery, and is poised to impact value-based care in this specialty.

 

KelaHealth Featured at Digital Orthopedics Conference San Francisco (DOCSF) 2021 Annual Experience 

The Digital Orthopaedics Conference San Francisco (DOCSF) is an annual conference that focuses on implementation of digital technologies in health care. This year’s DOCSF21 virtual conference kicked off with a keynote session by Dr. Gretchen Purcell Jackson (IBM Watson Chief Science & Health Officer) that highlighted the use of applied AI to reduce human errors and help avoid complications and readmissions. DOCSF21 was augmented by an innovation and startup showcase entitled “Bone Tank”, in reference to the widely popular Shark Tank on ABC television. The top five digital health startups in the orthopedic surgery space were selected from a pool of applicants from around the U.S. and other countries.  The most promising technology solutions were focused on improving surgeon workflows and patient experiences through the use of cutting-edge AI such as machine learning and robotic process automation. 

KelaHealth was selected as a finalist and invited to participate in the Bone Tank showcase. KelaHealth presented how machine learning algorithms applied to big data in surgery can identify individual patient risk factors and empower surgical teams to select appropriate clinical interventions to reduce complications and readmissions. Orthopedic Surgeon Dr. Vonda Wright judged the startup presentations and agreed with KelaHealth that workflow integration into existing surgeon processes is a key factor in successful adoption of new technologies. 

As Dr. Nancy Lynch, Orthopedic Surgeon and Co-Chair of DOCSF, stated, “Startups in the musculoskeletal digital health space have the wind at their back these days. Early-stage companies with transformative solutions will reap the benefits of a robust funding environment.  These technologies will be disruptive not just in how we deliver care but in how accurately and efficiently we deliver it and how well our patients do as a result of our interventions.” KelaHealth, an early-stage company and technological innovator, is a prime example of this type of healthcare solution.

 

Literature Cited

1. Sacks GD, Lawson EH, Dawes AJ, Russell MM, Maggard-Gibbons M, Zingmond DS, Ko CY. Relationship Between Hospital Performance on a Patient Satisfaction Survey and Surgical Quality. JAMA Surg. 2015 Sep;150(9):858-64. doi: 10.1001/jamasurg.2015.1108. PMID: 26108091.

2. Chang B, Sun Z, Peiris P, Huang ES, Benrashid E, Dillavou ED. Deep Learning-Based Risk Model for Best Management of Closed Groin Incisions After Vascular Surgery. J Surg Res. 2020 Oct;254:408-416. doi: 10.1016/j.jss.2020.02.012. Epub 2020 Mar 17. PMID: 32197791.

3. Richards MR, Seward JA, Whaley CM. Removing Medicare's outpatient ban and Medicare and private surgical trends. Am J Manag Care. 2021 Mar;27(3):104-108. doi: 10.37765/ajmc.2021.88598. PMID: 33720667.

4. Sloan M, Premkumar A, Sheth NP. Projected Volume of Primary Total Joint Arthroplasty in the U.S., 2014 to 2030. J Bone Joint Surg Am. 2018 Sep 5;100(17):1455-1460. doi: 10.2106/JBJS.17.01617. PMID: 30180053.