With the bundle payment initiatives, joint replacement surgeons and hospitals have started to assess the cost for the episode of care in an effort to reduce costs. One relatively easy item to manage is the cost of implants, which are highly unregulated. For example, a total knee implant not only varies between companies ($3000 – $5000), it also varies in different hospitals for the same company based on volume of cases (Stryker knee, Figure 1, can vary between $3200 to $4500 in NY hospitals).
One solution is to use “generic” implants without a “rep”. A rep is the company representative that is responsible for ensuring proper instruments, opening the sterile packaged implants and going through the steps of the procedure with the surgeon or the scrub tech, Figure 2). In routine cases, a total knee surgery is a stepwise, defined procedure and in the vast majority of cases with a trained team, a rep is not required. However, this “repless” model imposes challenges to the surgeon: allocating responsibilities that the rep would do, taking additional risks such as ensuring the correct implant, appropriate instruments and backup help are available if something goes wrong during the case. Moreover, switching to a different implant company that is willing to participate in the repless model is not an easy task.
The cost saving is enormous. A generic knee implant with a good track record can be less than $2000 in my hospital, which is roughly a $1.2 MM saving annually. The problem in my situation (hospital employee) is that this cost saving is for the hospital, there is no “gain sharing” and no negotiations.
- Is this transition worth the risk, especially since the cost saving is for the global healthcare and the hospital, not for the patient?
- Is using “generic” implants, which bears additional responsibilities, difficulties and risks, worth the savings for the hospital?
- What is the best way to manage a repless model?