Quality-Based Procedures (QBPs) and policies are a key part in the provision of quality healthcare. Analyzing the issues, relationships, emerging strategies in hospitals, and policy needs around hip and knee implants is pertinent. There are increasing demands for hip and knee replacements and implants and this growth is further expected to be substantial. This interview was done with a nurse leader at the local community hospital who is part of the hospital’s healthy policies assessments and policy appraisals for RN projects. The interview aims at providing a distinction of the selected factors that affects healthcare delivery systems and organizations in the United States. In addition, the examination of the factors that affect systems of finance, payment and the evaluation of policy and frameworks, and strategy formulations for coalition building and advocacy of health. Finally, to provide insight and synthesize analysis of policies that affects advanced practices in nursing. The rationale for conducting this interview is established the policy issues related to knee implant project guidelines. This information will be vital as it will in the development of the appropriate nursing policies in regards to knee implants guidelines.

 

Description of Policy Issue 

            The most commonly performed and effective operations in the United States of America are replacements surgeries to the hip and knee. With the increase of the number of replacement procedures, there is increased focus in the strategies and policies in the management of costs and ensuring the appropriate usage of such implants. The demands for hip and knee replacements are annually rising. For instance, in 2004 and 2006, the costs reached a high of $11 billion for hospitals and $5 billion for Medicare respectively (Wilson, Schneller, Montgomery, & Bozic, 2008). Complexities are added to this ever increasing cost by the prevalent relationships among the key stakeholders.

As reported during the interview the nurse leader reported, “….despite the success in conducting replacement surgeries for knees within the hospital, the costs for doing this are high…..these affect the hospital and trickles down to the patients.” There are several emerging strategies undertaken for managing implants and especially their costs (Wilson, Schneller, Montgomery , & Bozic, 2008). Moreover, various policy considerations such as developing a national council for assessing data and technology, a national joint registry, incentives, and price transparency.

Organizational Assessment

            The organizational assessment is as reported by the nurse leader within the hospital. According to the response by the interviewee (nurse leader), the costs of conducting knee replacements have constantly increased throughout the years. This increase in cost has had a financial bearing on the patients that has increased their concerns about the costs of care. The respondent indicated that, “…most sponsors of such patients complain of the costs of the treatment….and in some cases have suspected fraud.”

To deal with such dire accusations and stakeholders’ statements, measures were undertaken to ensure transparency.  For purposes of price transparency the company has employed staffs that have received specialized financial training. These staffs answer any questions from the patient and their families regarding the estimated prices including the provision of any other explanations regarding the variations that may occur in pricing depending on the patient’s care needs. From the interview response, the entire staffs of the hospital are involved in interactions with patients and their families. These staffs are well-trained on the institution’s information on price. This also comprises of the means of connecting the patients including their families to specially trained staff that have knowledge on the charges rendered for different services in the hospital, policies on financial assistance, and the billing practices used in the hospital.

A Joint Implant Price Registry

            From the response of the organizational assessment as provided by the nurse leader interview, a policy to establish a joint implant registry should be established to ensure price transparency in the institution.

Policy Analysis

Problem Definition

Data in the country reveals that there is not only a large volume and concern about safety of the devices used, but most importantly the high cost involved in knee implants. Hip and knee replacement surgeries are among the most commonly effectively performed operation in the country. This success in treatment has been associated with an increased prevalence. This is as reported by the nurse leader during the interview where he reported that surgery rooms and the wards are full of individuals needing such care and treatment.. This has also been accompanied by an increase in the cost of providing such treatment. For instance, the mean cost for implants is approximately $9,547 for a total knee replacement compared to $6,584 for a total hip replacement (THR) (Paxton, Kiley, Love, Barber, Funahashi, & Inacio, 2013). The respondent indicated that this acts as a financial barrier to most of their patients and that there is a need to streamline the costs as most patients are complaining of the high costs.

Evidence

Every year over 900 medical devices that can be implanted are approved by the FDA in the United States. Approximately 1,131,000 individuals receive either a TJR, pacemaker, or pacemaker leaf implant a figure that is expected to rise of the next ten (10) years (Paxton, Kiley, Love, Barber, Funahashi, & Inacio, 2013). For instance, as aforementioned, the average cost of joint replacements is $6,584 for a THR compared to the $9,547 for TJR. These procedures have been reported to be among the largest hospital expenditure for hospital (Paxton, Kiley, Love, Barber, Funahashi, & Inacio, 2013). Further, according to Paxton et al. (2013), the costs for these devices are expected to grow to over $100 billion over the next few years. In relation to the payers, the costs are also high. This is as reported by the nurse leader that the patients and their sponsors complain of the high costs of implants and the replacement procedures (Wilson, Schneller, Montgomery, & Bozic, 2008). For example, the highest payers of joint replacements in the country averaged about $11,000 for primary surgeries and $14,000 for revisions (Wilson, Schneller, Montgomery, & Bozic, 2008). This indicates the high cost of care involved in knee replacement.

Alternatives

            In case there is an increase in the number of knee replacement surgeries as has been projected, then the costs for payers will consequently increase as a response. Moreover, the costs incurred by the hospital will be way above the reimbursements they receive. In such a case this would be deleterious to the entire state’s welfare of the people. In the context of the current issues and the suggested projections two alternative policies are feasible and these include:

  1. Increased incentives (financial) for stakeholders to encourage collaboration.

This would promote increased collaboration between the hospitals and physicians in the process of comparative evaluation of the implants. This is in response to the sentiments expressed by the nurse leader during the interview where he indicated that most of the patients that found the treatment costly would sort for cheaper alternative. This involves sharing of gains between the two parties as is commonly used in the field of cardiology. For instance, a study in the field of cardiology in reference to gainsharing revealed that costs to the hospitals were reduced by approximately 7.4% due to the reduced prices (Ketcham & Furukawa, 2008).  This could be a useful policy and strategy in orthopedics; however, they face significant obstacles in regards to regulations which are considered strict and difficulties in obtaining a favorable opinion from the Office of the Inspector General (OIG).

  1. An Implant Price Registry

As mentioned earlier, the nurse leader interview reported that the payers often do not understand why the costs are too high and at time suspect fraud and corruption. Therefore, the development of an implant price registry is important in ensuring transparency of any information that is related to price. This equips the hospital, payers, and other stakeholders better information and opportunities to participate in decision making based on values. For instance as stated above, the Medical Device Pricing Transparency Act of 2007 (s 2221) was introduced in October of the same year in the Senate (Lerner, Fox, & Nelson, 2008). Patients and their families demand and deserve to be provided with the required information regarding the prices charged for receiving care in hospitals. They also demand that the information provided (Bhandari, 2011). As reported by the nurse leader during the interview increases transparency in regards to financial reporting and provision of information would allow the stakeholders not only in the hospital but also the entire healthcare system. He also reported that this would ensure more informed value-based decisions are made. The Medical Device Pricing Transparency Act of 2007 (s 2221) was introduced in October of the same year in the Senate (Lerner, Fox, & Nelson, 2008). This was established as there were increased discrepancies and unexplained variations in the prices of hip and knee implants.

The pricing was found to be as high as three times the required price. This was similar to the response given during the interview. Therefore this bill requires the reporting of the average and median selling prices for all implantable devices produced by manufacturers. This Act requires quarterly reports to be provided by manufacturers on data of sales prices and include any discounts (volume or cash), rebates, charge backs, and any other discount offered (Yong, Saunders, & Olsen, 2011). In the absence of such a mandatory requirement for transparency, the costs of implants will a mass and negatively impact provision of care as it will be come to expensive. Therefore, implementation of a Joint implant registry as a policy is required.

Evaluation Criteria

From the discussion above, the main issues of concern is in regards to cost saving for payers, ease of establishment, and sustainability. Moreover, from the interview the nurse leader also reported that the needed policy should be on that that can ensure minimal treatment costs even at the hospital level only and ensure transparency in finances while ensuring positive treatment outcomes.

Projected Outcomes

            The projected outcomes for establishing the increased incentives (financial) for stakeholders’ policy there may be reduced regulations form Medicare and Medicaid. There may also be increased reimbursement to hospitals and physicians that actively engage in collaboration to promote gainsharing. While for the policy to establish an implant registry, the transparency and communication of financial information, the payers and other stakeholders may have appropriate financial information that empowers them to make sound and value-based decision. This promotes cost saving and the entire treatment outcomes.

Trade-offs

            Between the two policy options there are two key trade-offs that are vital in deciding the most appropriate policy option. Firstly, in the increased incentives approach while cost saving may be achieved through the reimbursements provided these may benefit only the hospitals and the doctors themselves and may not necessarily transform to reduce costs in the treatment procedure. Secondly, due to the lack of transparency the payers and other stakeholders cannot access the relevant financial reports; therefore, they do not have a foundation for making value-based sound decisions. On the other hand, the implant price strategy allows for transparency in financial reporting hence ensures that any cost saving trickles down to the payers. Moreover, the establishment can be done at the hospital level and does not involve the OIG hence easy to establish. Finally, the transparency allows sound decision making by parties and ensures provision of quality low cost treatment.

Decide

            The implant price strategy is the best policy for ensuring cost saving and delivery of quality services. This is because of its transparent nature that ensures even the payers know the existing costs and make decisions based on the value they need. The interviewee also reported that this is the best method to eliminate doubt regarding the high cost of knee replacements. This should, therefore, be established at the hospital level.

The Story

Following the interview, it was evident that the hospital needed urgent reforms in terms of policy to ensure cost saving in knee implants. Lack of transparency promotes doubt as the payers cannot understand why such a procedure would be so costly. Therefore, establishing a policy that would allow them including the hospital to have access to the financials creates trust and also provides a pool of information where they can select the most cost effective suppliers of the implants. They are able to make value-based decisions that not only save costs improve treatment outcomes.

Conclusion

            The prevalence of the needs for knee implants surgeries is increasing and this result in a consequential increase in the demand for knee implants. The costs of these items are high and are predicted to increase in the future this is also as reported by the nurse leader during the interview. There is  a need to contain these costs while ensuring positive treatment outcomes. The implant registry provides a transparent source of financial information regarding knee implant where payers and can buy at reduced price hence reduce the overall cost of treatment. This because these registry monitors performance and these influence purchasing decision. Hence, to encourage purchase high performance is required that improves overall treatment quality.

 

References:

Bhandari, M. (2011). Evidence-based Orthopedics. Hoboken, New Jersey: John Wiley & Sons.

Ketcham, J. D., & Furukawa, M. F. (2008). Hospital-Physician Gainsharing in Cardiology. Health Affairs, 27(3), 803–812.

Lerner, J. C., Fox, D. M., & Nelson , T. (2008, November). The Consequence Of Secret Prices: The Politics Of Physician Preference Items. Health Aff November vol. 27, 27(6), 1587-1598.

Paxton, E. W., Kiley, M.-L., Love, R., Barber, T. C., Funahashi, T. T., & Inacio, M. C. (2013, June). Kaiser Permanente Implant Registries Benefit Patient Safety Quality Improvement, Cost-Effectiveness. The Joint Commission Journal on Quality and Patient Safety, 39(6), 246-251.

Wilson, N. A., Schneller, E. S., Montgomery , K., & Bozic, K. J. (2008, November). Hip And Knee Implants: Current trends and policy considerations. Health Affairs, 27(6), 1587-1598.

Yong, P. L., Saunders, R. S., & Olsen, L. (2011). The Healthcare Imperative: Lowering costs and improving outcomes: Workshop Series Summary. National Academies Press.