How Much Can Interventional Orthobiologics Save Insurers?

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orthopedic surgery costs

Recently, insurance behemoth Blue Cross/Blue Sheild (BC/BS) disclosed the huge amount of money they spend on elective orthopedic care. Why should you care? Because a disruptive technology is already upending the orthopedic surgery spending applecart. In addition, the world’s largest orthopedic surgery organization is getting all irrational. Let’s dig in.

How Much Does BC/BS Spend?

Based on a recent report put out by the company, BC/BS spent 25 billion on elective orthopedic surgery in 2017, which was 47% of all orthopedic spending for the company. From the report:

“The increase in the number of knee and hip procedures from 2010 to 2017 is the main cost driver, as the number of knee and hip procedures is up across nearly all ages. Utilization increased by 17 percent for knee replacements and 33 percent for hip replacements”

How expensive are hip and knee replacements? 20-30K depending on site and where the surgery was performed (inpatient or outpatient and location around the country). However, the range on the cost of those procedures is huge. Meaning that some sites are commanding 80-90K for each hip and knee replacement surgery.

Can We Calculate Total US Elective Orthopedic Surgery Spend?

BC/BS represents about 40% of the total private healthcare insurance market. Hence elective orthopedic spend in the US is likely 50 billion USD plus annually.

How Many Elective Orthopedic Surgeries Can IO Prevent?

First, what is interventional orthopedics (IO)? This is also known as interventional orthobiologics. See my video below:

How does IO work? See my video below:

Based on how we’re able to help patients avoid surgery every day in the clinic, about half or more of all elective orthopedic surgeries can be replaced by precise interventional orthobiologic injections. Let’s say I’m wrong and only half right, which is that IO can only replace 1/4 of elective orthopedic surgeries. That’s a savings of around 10-15 billion a year.

Is this Why AAOS is Irrational on Orthobiologics?

The American Academy of Orthopedic Surgeons (AAOS) should be leading the way in supporting the use of orthobiologic injections. However, regrettably, they’re heading backward with statements like this:

“While rising in popularity, the FDA has not approved PRP or BMA for any indications in the treatment of any pathology, including osteoarthritis and spinal fusion.”

So let’s dissect that statement:

  • BMA stands for Bone Marrow Aspirate, so this is a typo as this should be Bone Marrow Concentrate (BMC)
  • Both PRP and BMC are exempt from being regulated as a drug (21 CFR 1271.15(b)), so here AAOS doesn’t even understand the regulations as they exist right now.
  • PRP has more randomized controlled trial evidence than any orthopedic surgery in existence at this point. So again wrong.
  • BMC now has three randomized controlled trials showing efficacy in knee arthritis (one is ours and two were published by Philippe Hernigou (study 1 and study 2) while knee replacement has two.

So is this statement by AAOS rational or scientific? Nope. it’s irrational and defensive.

Is AAOS Concerned?

Given that AAOS’s statement is irrational and unscientific, yes, they are concerned. It’s my guess that orthopedic surgical rates will DECLINE over the next 5 years. However, getting that to happen isn’t easy. Let me explain.

How Regenexx is Putting a Dent in Orthopedic Surgery Costs

Despite the mounting evidence that these products help orthopedic patients, many insurers are concerned about opening the orthobiologics pandora’s box. How do I know? I’ve spoken to many medical directors for major carriers. Why?

First, they see orthobiologics as cost-plus and not cost-saving. Meaning, that while injections will happen that could lower surgical rates, orthobiologics will also happen with expensive surgeries. In addition, without an incentive for surgeons to reduce surgical rates, they fear orthopedic practices using whatever combination of injections and surgeries maximize their revenue.

So if that’s the case, how is Regenexx signing up large company after large company? Because our model is using orthobiologic injections to REPLACE the need for surgeries. We also add in:

  1. Orthbiologic utilization review to ensure that most procedures are replacing costly surgeries
  2. Protocols for processing and procedures so a Regenexx procedure in Des Moines is the same as one in California or New York
  3. Registry tracking of all outcomes and complications
  4. Published data on our outcomes
  5. An intense provider selection and training process

Meaning our network is set up to save employers money rather than to open the orthobiologics pandora’s box.

The upshot? The field of IO is about to save a bunch of money if done right or cost a bunch of money if done wrong. Thankfully, at Regenexx we’re not opening pandora’s box, but turning it into a cost savings machine.

This blog post provides general information to help the reader better understand regenerative medicine, musculoskeletal health, and related subjects. All content provided in this blog, website, or any linked materials, including text, graphics, images, patient profiles, outcomes, and information, are not intended and should not be considered or used as a substitute for medical advice, diagnosis, or treatment. Please always consult with a professional and certified healthcare provider to discuss if a treatment is right for you.

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