This past week, Regenexx announced two different partnerships aimed at fixing elective orthopedic care. These were deals with Edison Healthcare and ACAP Health. These are two heavy hitters in the world of efficient healthcare delivery. I also spent yesterday speaking with a renowned expert on this topic, which gave me great insights into just how broken the system is at this point and how we’re going to repair it, at least in the field of orthopedics.
Understanding American Healthcare
American healthcare is a beast of epic proportions. It’s a machine that only works if insurance tokens are placed in the right slots and whose goal is to maximize the amount spent on healthcare. While well-intentioned, the recent Affordable Care Act only made matters much worse. Why? It placed the world’s most inefficient medical-care delivery system, the American hospital, at the heart of the cost-savings revolution. Let me explain.
If you really want to understand our system, then the stories relayed by the healthcare expert I spoke to will help you comprehend how the sausage is made, and like all such processes, it’s pretty ugly. This expert ran an incredible program focused on preventative care in a family-practice setting. For example, instead of waiting for someone to be diagnosed with end-stage cancer, which is highly lethal and very costly, his program focused on early cancer detection. The same with heart attacks. Why wait for someone to have “the big one” when you can focus more resources on preventing this deadly and costly event? His program was wildly successful, generating eight- to nine-figure savings in a large health system.
There was really only one fatal flaw in his program. The hospital system that was responsible for caring for this population began losing money due to decreased hospital admissions. Without getting into details, the hospital quickly found ways to dispose of his program. Which is emblematic of the problem. What was good for patients and their employers was bad for the business of delivering healthcare.
Our Broken Orthopedic Care System
The largest single line-item cost for any company paying healthcare bills is orthopedics. It’s also the single biggest revenue generator for any hospital system. Hence, while a self-funded employer health plan wants to minimize the amount being spent, the hospital wants to maximize their revenue. This inherent conflict of interest in orthopedics also extends into the providers of orthopedic care, the surgeons and device manufacturers. Neither can afford to reduce surgical rates as doing so means that existing investments in surgery centers and profits from selling orthopedic devices will languish. See my video below that explains why putting a hospital or orthopedic surgeon in charge of reducing surgical rates is like placing the fox in charge of the proverbial henhouse:
Regenexx and the Orthopedic Gatekeeper Model
A gatekeeper in medicine is usually an insurance bureaucrat who tries to ration care by forcing treating doctors to get preapproval for every procedure or test. This model has always failed because there is nothing to replace the denied care that’s better than what was proposed. With Regenexx, that’s very different. This is why we have been so focused on only accepting very specifically trained physicians and ensuring that we have a very tough and rigorous training program. In this way, our highly trained providers can offer interventional orthopedics in place of surgical orthopedics. Meaning that what they’ll be using will be as or more effective than what was proposed and far less invasive with a much quicker recovery.
For example, a patient with a complete nonretracted ACL tear is offered surgery on one of these plans. That patient will first be screened to see if he or she is a candidate for a precise bone marrow concentrate injection into that torn ligament to regenerate the ligament in situ rather than rip it out surgically. This procedure is far less invasive than ACL surgery with a much quicker recovery and costs less as well. Hence, this is a win-win healthcare scenario for the patient and the insurer.
Why Only Regenexx Can Do This…
While we pioneered this space, it’s been interesting these past few years to see the device companies enter it with a flurry of activity. Meaning, these are companies that sell widgets to process blood or bone marrow that are used in regenerative orthopedic treatments. They also have created weekend courses, trying to emulate what we do at Regenexx. However, these companies will never be able to save self-funded health plans money, for the same reason that the hospital killed my healthcare expert’s program—it’s bad for business.
For example, if you’re a company making a new widget to create bone marrow concentrate and running courses on how that is used, your primary objective is to sell as many widgets as humanly possible to as many doctors who will buy them. Hence, you don’t care about outcomes, who uses the widgets or how, or whether your widgets reduce surgical rates. At the end of the day, you’re in the widget-selling business.
This week, Regenexx signed a deal with Edison Healthcare as well as ACAP Health. What’s unique about both is that they are focused on saving money by improving the quality of care delivered. ACAP, in particular, was the first to develop a disease-management program for metabolic syndrome. That’s the most common health issue facing Americans today who don’t exercise, are overweight, and have high blood pressure or pre-diabetes. They now consider Regenexx their program for improving orthopedic outcomes and reducing the number of invasive and costly surgeries.
The upshot? More of these deals with major players in the healthcare cost savings space will be announced over the coming weeks and months. Why? When I started this company, it wasn’t about magic stem cell pixie dust, but using new tools in new ways to replace invasive and often ineffective orthopedic surgeries. Why? That’s the best option for patients. Turns out, that also saves money. Now that we have more than a decade of data and have piloted how we can reduce surgical rates, it’s time to roll this out in a way that directly competes with orthopedic surgery for healthcare insurance dollars. Onward and upward! If you have a self-funded employer-based health plan, find out more about the Regenexx Interventional Orthopedic Program by visiting www.RegenexxCorporate.com.