Twin Cities Orthopedics, a 144-physician group based in Golden Valley, Minn., named Aaron Johnson CEO in October, succeeding Troy Simonson in the role.
Mr. Johnson spoke to Becker's Spine Review about his focus for 2021, rising industry consolidation and bundled payments for spine and total joints.
Question: Congratulations on your new role. What prompted this move?
Aaron Johnson: Part of the reason for my transition into CEO for Twin Cities is due to the growth of some of the other areas of our business. Our management company Revo Health has seen significant growth, even throughout the pandemic, as well as our iHealth Collaborative, an independent multispecialty practice we're forming in the Twin Cities metro area. There are a lot of exciting things going on at TCO and it's my responsibility as CEO to continue our focus and strategy there.
Q: What are the key areas you will be focusing on as we head into 2021?
AJ: We're going to continue to focus on our value-based care initiatives and continue to grow our outpatient total joint program. We are doing Medicare total knees now in an outpatient setting. We're hoping total hips will be moved onto the ASC list soon so we can accommodate those procedures at our ASCs. We want to build on our strong quality outcomes and patient satisfaction scores and continue to provide care in a COVID-safe environment. It's promising to hear about the vaccine efforts, but we know this virus is going to continue to be around for a while.
We're positioned well for growth. We've continued to focus on that throughout the pandemic. I know a number of groups have put a hold on physician recruitment efforts, which we haven't done whatsoever. We also have a number of construction projects that are either underway or going through the due diligence process for market expansion.
Q: How is Twin Cities navigating the ongoing challenges brought by the pandemic, as COVID cases surge again across the country?
AJ: Now, we're dealing with a second wave of COVID cases and a second wave of hospitals postponing what they call elective orthopedic procedures. We're quickly pivoting to address staff shortages at hospitals and potential bed shortages due to the pandemic. Naturally, that means some of our cases will be postponed. Fortunately, our local department of health and state officials have not prohibited surgeries at ASCs at this time, nor are they limiting interactions in clinics. We're business per usual in our clinics, ASCs and our ancillary facilities as part of the practice. Currently, the only thing that's being impacted is our inpatient surgeries.
Q: How did the practice cope with the first wave of COVID-19 cases earlier in the year?
AJ: For about eight weeks, with the cessation of elective procedures at the onset of the pandemic, we took about an 85 percent hit. We've been operating at our usual capacity since about mid-May when surgical restrictions were lifted. For about eight or nine weeks, we were actually operating above our historical averages, simply because we were working through that backlog of cases. We were smooth sailing until about a week and a half ago when we saw COVID cases rising in Minnesota and Western Wisconsin, where we also treat patients. We're starting to see numbers dip a little bit again now.
Q: We've seen a significant number of mergers and acquisitions in the orthopedic field this year. Do you think these larger groups are the future for orthopedics?
AJ: I think consolidation in orthopedics has been accelerated by the pandemic. One of the benefits of being a larger group is the economies of scale as well as the ability to negotiate better contracts with implant or supply vendors. Additionally, from a reimbursement standpoint, typically the larger groups are able to leverage the commercial payers and negotiate more lucrative contracts. As the pandemic hit and groups started to see this financial pressure and the financial crisis it created, it was quick for them to realize that long term — if they wanted to be a viable, autonomous independent practice — they really need to band together to be able to deal with some of these pressures and challenges.
Q: Turning to value-based care, how is Twin Cities' bundled payment program for total joints performing?
AJ: We created our Excel program in 2011 and performed our first cases in 2012. This year, 2,200 of 10,000 total joint surgeries are expected to be done as part of our bundled payment program. It's a prospective bundle, so we have the same rate for all commercial payers. We don't negotiate up or down depending on the payer. A total knee from Blue Cross is going to be the same price for any other payer on the market. It includes everything from the date of surgery in one of our ASCs and extends for about 90 days postoperatively. For that bundled payment, you're getting a surgery center facility fee, physician fee, a PA or nurse practitioner fee. Anesthesia fees are included, our patients are discharged from an ASC to an orthopedic recovery care suite. Initially we outsourced that with assisted living facilities but recently we've built out our own care suite in house.
Typically, patients stay one night at the care suite, but they can stay longer. Most patients go home on the day after surgery. In the care suites, patients receive nursing care and in-room physical and occupational therapy. They're also rounded on by an internal medicine or family medicine physician as well as our orthopedic surgeons before being discharged. From there, any follow-up care in clinic and any outpatient physical therapy services at our facilities are included as part of that bundled payment. The philosophy of the program is to provide the highest quality care and outcome we can, and provide that at a lower cost. That was really the impetus for this program. We want to give patients a better experience than they receive at a hospital at a lower cost, and reduce their out-of-pocket expenses and costs of the healthcare system in general. On average, we're being paid about 30 percent less than what a traditional fee-for-service episode of care might be for that total joint or complex spine procedure.
Q: Have you achieved similar success for bundled payments in spine? What spine cases are included?
AJ: The Excel program includes total knees, hips, shoulders and ankles as well as one- and two-level ACDFs, one- and two-level lumbar fusions and cervical disc replacement. I think one of the benefits that our program provides is that recovery care suite. For spine, if you're looking at a typical true discharge-to-home same-day surgery type of program, you're going to run into concerns with anesthesia providers and surgeons about potential airway issues and complications that may occur when patients get home in that first 24 hours. We can really keep an eye on patients and care for them in the suites during this time. I would call our program more of a hybrid model because it's not true outpatient same day, but it's also not in a hospital. The care suites feel more like really nice hotel rooms. I think that structure allows us to accommodate those spine patients and manage any potential issues or postop complications that may arise.