Building Orthopaedic Practice Revenue: Four Economic Models
Reading Time: 5 minutes read
Evaluating the economic impact of the OnSight 3D Extremity System.
By Brian Curtin, orthopedic surgeon, Ortho Carolina.
Before investing in a new piece of imaging equipment, orthopaedic practices need to understand the potential financial impact. Contribution to patient care is paramount; however, so is the potential to increase orthopaedic practice revenue.
The Carestream OnSight 3D Extremity System is a Cone Beam CT (CBCT) scanner designed for easy, day-to-day extremity evaluation in the orthopedic practice. As this technology becomes more widely available, orthopedic practices need to understand the economic implications of owning this next generation clinical tool.
Carestream Health commissioned a working group of surgeons and administrators from four leading orthopaedic practices to evaluate its impact on orthopedic practice revenue. An independent consulting organization coordinated with the four practices (practice sizes ranging from seven surgeons to over 100) to create pro-forma implementation models. The models were created based on four levels of imaging throughput (moderate, low-mid range, high-mid range, and high) and two practice sizes (five surgeons and 10 surgeons).
The final paper outlines the results of that working group’s findings, including specific economic models for orthopaedic practice revenue for practices of various sizes and throughputs. Here’s a summary of their findings.
Excellent projected ROI for most orthopedic practices
Based on the regional reimbursement profiles in the four practices, integrating the OnSight 3D Extremity System should be profitable for a large number of orthopedic groups. Most practices are projected to achieve positive cash flow in the first year after implementation of the OnSight system.
These models were built using:
- Surgeon-derived clinical utilization models
- Administrator-derived regional reimbursement, staffing, and operational models
- Company-advised equipment, service, and financing cost models.
The pro-forma financial models for a five-surgeon practice, operating in the low-mid throughput range, is shown in this blog. Practices operating in this range are projected to yield an annual increase in net profitability of approximately $270,000 beginning in year one.**
Dr. Brian Polsky of Baltimore, MD, a participant in the modeling team said, “Point-of-Care 3D CBCT imaging will change the practice of orthopedics, in terms of diagnostic specificity, right-the-first-time diagnosis, and a better patient experience. It will also bring practice improvements in operational efficiency and financial performance.”
Enhanced imaging capabilities
The benefits of using the OnSight 3D Extremity System extend beyond increasing orthopedic practice revenue. Increasing patient throughput via faster and more confident diagnosis, planning and treatment also is possible due to the system’s enhanced imaging capabilities. The OnSight system is designed to provide pristine 3D images at the point-of-care with a wide-door opening for easy step-in patient access that allows weight-bearing studies not possible with conventional CT, providing more “true-life” imaging.
The OnSight 3D Extremity System also delivers fast, accurate image capture with high-image resolution and a lower radiation dose than CT, which enables a timely diagnosis and commencement of treatment. Its uniform spatial resolution in all three directions contributes to the diagnosis of occult fractures, fusion evaluation, mal-union and non-union of fractures, arthritis, flat foot, and soft tissue abnormalities.
The system also has the capability to capture full 3D images at a radiation dose 50 percent lower than traditional CT scans by focusing on the effected extremity rather than both extremities.1,2 Its unique weight-bearing capabilities — not available with CT — are also especially beneficial when diagnosing knee, ankle and foot pathology.
The OnSight 3D Extremity System also provides state-of-the art reconstruction with advanced scatter and metal correction features, providing improved images for post-surgical evaluation.
Improved patient satisfaction can translate to retention and referrals
Having imaging on site is more convenient for the patient and enables more timely diagnosis, planning and treatment. For these reasons, interest is higher than ever in imaging in the orthopaedic office, according to AAOE. Having advanced technology like the OnSight 3D Extremity System within an orthopedic practice helps provide better service, which can translate into better patient retention and more referrals.
As Dr. Jeffrey Rosenfield of West Palm Beach, FL shared, “I just saw a patient on Tuesday and had to send him out for a CT scan. I wasn’t able to get the information I needed or see him again until Friday — a three-day delay. Sending these studies out can cause major inconveniences for ailing patients and unnecessary delay for definite care. With an OnSight 3D system, I would definitely be able to improve the efficiency of the treatment process.”
By integrating an OnSight 3D Extremity System into an orthopedic practice, physicians have the opportunity to improve clinical decision making, practice efficiency, patient satisfaction, and increase orthopaedic practice revenue.
Dr. Brian Curtin is an orthopedic surgeon at Ortho Carolina. He is board Certified by the American Board of Orthopaedic Surgery; a Member of the American Academy of Orthopaedic Surgeons; a Member of the American Association of Hip & Knee Surgeons; a Member of International Congress of Joint Reconstruction; a Member of North Carolina Medical Society; and a previous Teaching Faculty Member at the Medical College of Virginia.
Contributing authors to the study are: M. Brian Polsky, MD and Chance West — Baltimore, MD; Jeffrey Rosenfield, MD and John Hornberger, MBA — West Palm Beach, FL; Richard Brown, MD and Shara Stadler — La Jolla, CA
*Based upon study conducted by DevicePharm with four orthopaedic practices between March and July of 2016. These results represent a potential return on investment scenario as calculated by the 4 practice working group. Carestream makes no assurance that you will receive any specific income based on your purchase of the OnSight system. Bottom line assumptions of study included 10% of X-rays would shift to Onsight 3D, and 10% of X-rays would also get Onsight 3D. 80% of CT would shift in house, and 5% of MRI would also get Onsight 3D. 50% of reads are performed internally by orthopaedic surgeon. Adds a 10% premium to Private insurance cases, where pay mix is 75% Private and 25% Medicare. Expenses include an annual $64,200 capital expense (assumes a 5 year loan with 3% interest rate), $24,000 annual service contract, and an incremental .25 FTE X-ray Tech at $16,000/year.
- Carrino JA, Al Muhit A, Zbijewski W, et al. Dedicated cone-beam CT system for extremity imaging. Radiology. 2014;270(3):816–824. doi:10.1148/radiol.13130225.
- Thawait G, Demehri S, AlMuhit A, et al. Extremity cone-beam CT for evaluation of medial tibiofemoral osteoarthritis: Initial experience in imaging of the weight-bearing and non-weight-bearing knee. European Journal of Radiology. 2015;84(12):2564–70.