New Marketplace

Building a “Hospital-within-Hospital” Model for Joint Replacements

Case Study · December 5, 2018

The Connecticut Joint Replacement Institute was established in 2007 as a private physician-governed service line within Saint Francis Hospital and Medical Center in Hartford, Connecticut. Since CJRI’s founding, surgeons have performed >30,000 joint replacements, making it the largest joint replacement center in the region. CJRI’s unique “hospital within a hospital” model, data-driven decision-making process, accredited registry, and bundled payment program facilitate excellent patient outcomes while continuing to reduce the per-case cost of joint replacement care.

Key Takeaways

  1. Care processes in our current medical system often take a siloed approach whereby treatment plans along the care pathway are independently developed by physicians and other health care providers, resulting in a fragmented, inefficient, and costly approach to care delivery.

  2. A “hospital within a hospital” model that is focused on a specific practice and common set of procedures can better coordinate efforts among all health care providers.

  3. Implementation of a bundled payment program demands thorough end-to-end care redesign and can further improve outcomes and reduce costs.

  4. The Connecticut Joint Replacement Institute’s accredited arthroplasty registry provides leadership with actionable and credible information that is the underpinning of our data-driven decision-making culture.

The Challenge

For patients undergoing total joint replacement, the various care processes for preoperative preparations, surgery, and postoperative recovery have often been executed in isolation. This siloed ecosystem, with its emphasis on independently developing treatment plans rather than a team-based approach centered on the patient, has resulted in fragmented, duplicative, and costly care delivery. Quality-improvement strategies focusing on individual elements of the care pathway have provided certain incremental improvements but have largely failed to address deeply rooted structural problems.

In 2006, the founding surgeons of the Connecticut Joint Replacement Institute (CJRI), including one of the authors of the present article (Steven Schutzer, MD), recognized that the existing health care system was ill-prepared for the future of joint replacement surgery, especially given the dramatic increase in surgical volume that was expected to occur as a result of the aging baby boomer generation; specifically, between 2005 and 2015, the annual number of replacement procedures in the United States was expected to double from approximately 600,000 to 1.2 million. The founding team anticipated that, as a result of multiple systemic inefficiencies related to physician communication, data collection, and payment models, existing hospital systems would be crippled by the predicted surge in patient volume.

The Goal

To address these chronic inefficiencies in the existing system, the founding team envisioned an outcomes-driven joint arthroplasty institute based on a “hospital within a hospital” model, whereby a core of orthopaedic surgeons from five previously competing private practices would provide administrative and consultative management for a joint replacement service line at Saint Francis Hospital and Medical Center. Despite a prior history of overt practice competition, the founding surgeons were equally united by a common sense of dissatisfaction with the environment at their affiliated hospitals.

Based on their experiences, the team drafted a Memorandum of Understanding outlining a series of self-designed principles that they believed would make the project a success. The new center would:

  1. be physician-managed;
  2. exist within its own physical space;
  3. have a multidisciplinary staff dedicated solely to joint replacement;
  4. house its own research department and joint replacement registry; and
  5. remain a separate cost center within the hospital, exempted from across-the-board budget cuts.

The Execution

Physician Governance and Collaboration

In October of 2006, the team presented the Memorandum of Understanding to then-President and CEO Christopher Dadlez, FACHE, and then-COO Amit Mody, MD, of Saint Francis Hospital and Medical Center. As an indication of the level of commitment to this new program, an agreement was signed within 48 hours.

The founding surgeons then formed a management company (the Connecticut Joint Replacement Surgeons, LLC), which entered into a contractual relationship with Saint Francis Hospital and Medical Center; this relationship is governed by an Orthopaedic Services Consulting Agreement that was initially signed on July 31, 2007. Under this arrangement, the LLC surgical group is responsible for providing administrative, managerial, and consulting services for Saint Francis within the dedicated spaces of CJRI. The surgeons have no ownership stake in the facilities, and Saint Francis retains ultimate authority and control over final decision-making. This contract constitutes a functional co-management agreement (although not legally recognized as such) under which the Physician Director of CJRI is a private-practice orthopaedic surgeon and the Executive Director is a registered nurse employed by Saint Francis.

To build trust among previously competing physicians, CJRI was aligned around the common vision of becoming a leading national and international site for total joint arthroplasty. In addition, the organization was founded upon the principle that, in the business of health care, there are two customers, each with unique needs: the patient and the physician. As a result, it was a priority to create a practice environment in which the surgeons would be provided not only with state-of-the-art equipment, tools, and implants, but also with operational policies that promoted a frictionless business interface with the CJRI administration. For example, CJRI surgeons have the same teams in their operating suites at all times. Furthermore, clinical protocols at CJRI are implemented by consensus and only after all surgeons and staff have had an opportunity to provide input. Cultivating such a culture takes patience and time — in our experience, no less than 3 to 5 years.

Data Registry and Patient-Reported Outcome Measures

Developing a robust joint replacement registry was a key priority for the founding surgeons and was one of the essential cornerstones of the original proposal to Saint Francis. In 2007, a research team was organized to create the registry, manage the data, and identify quality-improvement strategies through rigorous analysis of the data.

Developed by one of the authors (Michael Cremins, PhD, PA-C), the registry extracts >1,000 data points per patient to validate patient demographics, operative details, emergency department visits, readmissions, and adverse events. The registry employs computer algorithms to adjudicate adverse events from disparate sources to ensure that the data are trusted and actionable. On a monthly basis, all key data (including infection rates, hospital length of stay, and all adverse events) are shared with each surgeon through a secure system.

In addition, the research team presents the data at a bimonthly Healthcare Value Advisory Council meeting, during which each CJRI surgeon receives a dashboard that compares his or her performance data with the aggregate performance data for all CJRI surgeons. As the surgeons are confident in the credibility of the data, they are willing for their own data to be disclosed with full transparency. Examining the culture at CJRI, it is clear that when physicians no longer compete for patients, their focus shifts away from productivity and higher volume and toward their natural desire to pursue professional mastery. As a result, better outcomes emerge, benefitting both patients and surgeons.

Screenshot showing the dashboard comparing the performance data for an individual CJRI surgeon with the aggregate data for all CJRI surgeons

  Click To Enlarge.

The collection and analysis of patient-reported outcome measures (PROMs) were enhanced when CJRI collaborated with the University of Massachusetts on the Functional Outcomes Research Comparative Effectiveness in Total Joint Replacement (FORCE-TJR) project. FORCE-TJR, led by Patricia Franklin, MD, MPH, MBA, and David Ayers, MD, is an effort dedicated to translating PROMs into improved patient care and thereby driving health care value. As FORCE-TJR data-collection methods were adopted by the CJRI registry, the collection and analysis of PROMs became routine and a critical part of the CJRI culture.

In 2010, as a way to benchmark its outcomes on a national level, CJRI became the first pilot participant in the American Joint Replacement Registry. Furthermore, in January 2013, CJRI became a founding sponsor of the International Consortium for Health Outcomes Measurement (ICHOM), whose mission is to unlock the untapped potential of value-based health care by defining global standardized sets of outcome measures for specific diseases.

John Grady-Benson, MD, one of the authors of the present article and a founding member of CJRI, participated in the Working Group for the ICHOM Hip and Knee Osteoarthritis Standard Set, culminating in a publication of its proceedings in 2016. PROM tools that were included in the ICHOM Standard Set, such as the Hip Disability and Osteoarthritis Outcomes Score (HOOS) and Knee Disability and Osteoarthritis Outcomes Score (KOOS) tools used by CJRI, have now been integrated at 14 international pilot sites as part of the ICHOM Hip and Knee Osteoarthritis Global Benchmarking project.

In 2016, the CJRI arthroplasty registry was certified by the American Board of Orthopaedic Surgery. CJRI is the only community-based registry certified by the board and is one of only four certified joint replacement registries in the United States. This certification allows surgeons to utilize the registry as a source of continuing education in exchange for their participation in CJRI quality and outcomes initiatives. In addition to storing data on patients managed with total joint replacement, the CJRI registry also stores registry data for patients served by the Spine Institute of Connecticut as well as the Connecticut Sports Medicine Institute.

Bundled Payment Program

In 2009, armed with clean data on outcomes and cost, the physician leadership team at CJRI began to discuss implementing a bundled payment program. The initial motivation to create an all-in single package price for total joint arthroplasty was to participate in the then-active medical tourism industry. CJRI defined a bundled payment as “a single package price for a comprehensive set of health care services delivered by multiple providers over the full episode of care.” Three parties — Saint Francis Hospital, the Connecticut Joint Replacement Surgeons, LLC, and Woodland Anesthesiology Associates — agreed to collaborate and create this package, with each party assuming a degree of risk, revenue, and ownership proportionate to their true costs of delivering their specific services.

When the founding surgeons initially embarked on this journey, they were unfamiliar with the term health care value (defined as the outcomes that matter to a patient for their specific health condition over the true cost of delivering these outcomes), but serendipitously that was exactly the path they were on. One year later, the three parties signed a Bundled Payment Agreement (which we then named the Step Ahead Plan), and CJRI was ready to go to market.

In 2012, the Step Ahead Plan signed its first bundled payment contract with ConnectiCare, a statewide insurance carrier, marking the first commercial bundled payment contract in the region. In response to the needs of the various health care purchasers in our market, CJRI now offers a menu of bundled payment options:

  1. inpatient care only,
  2. inpatient care with a warranty for postoperative surgical site complications,
  3. inpatient care with a warranty for postoperative surgical site complications that also includes accepting financial risk for managing post-acute services, and
  4. inpatient care with a warranty for postoperative surgical site complications that also includes accepting financial risk for providing post-acute services.

Time-Driven Activity-Based Costing

In its pursuit of health care value, CJRI sought not only to improve patient outcomes (the numerator of the health care value equation), but also to reduce the costs associated with delivering these outcomes (the denominator). To identify areas of clinical inefficiency, CJRI partnered with Harvard Business School in 2013 to perform a time-driven activity-based costing (TDABC) analysis of the business. For this analysis, CJRI program manager Maureen Geary and her team initially created 12 process maps for a standard primary total joint arthroplasty; the maps covered the entire episode of care, starting when the surgeon obtains patient consent for surgery and extending to 1 year postoperatively. This analysis allowed CJRI to scrutinize each map for potential improvements, including the processes, resources, and the time necessary to complete each step.

The TDABC analysis highlighted opportunities for clinical improvement through resource reallocation. For example, the analysis revealed that only approximately 20% of CJRI patients were getting out of bed on the day of surgery because of the unavailability of hospital-based physical therapists and a lack of additional personnel available to help. To address this limitation, CJRI developed a Mobility Technician program for the purpose of training certified nursing assistants to help patients stand and walk shortly after surgery — activities previously under the auspices of the hospital-based physical therapist. After program implementation, the percentage of patients who were able to get out of bed on the day of surgery rose from 20% to nearly 100%.

The TDABC analysis also demonstrated the need for further improvement in clinical protocol standardization. This finding prompted a year-long effort to revise, edit, and add a total of 16 CJRI protocols, resulting in savings of nearly $400,000.

The Metrics

Since its founding, CJRI has been committed to quality and safety improvement initiatives and has utilized metrics and analytics to continuously monitor these efforts. For example, higher percentages of patients are discharged directly home following knee and hip replacement (87.4% and 90.3%, respectively), compared with reported benchmarks (70.1% and 70.4%, respectively). Moreover, the average lengths of stay for knee and hip replacement at CJRI (2.1 and 1.9 days, respectively) are now shorter than the reported national averages (3.4 and 3.4 days, respectively).

Percentage of patients discharged directly home and average length of stay at CJRI as compared with national benchmarks

  Click To Enlarge.

Many clinical protocols have been instituted and further improved through longitudinal metrics assessment. For example, by standardizing and refining its procedures, CJRI increased patient safety by successfully lowering homologous blood transfusion rates after total hip replacement from 22.2% to 1.5%. Hospital readmission rates are much lower at CJRI than nationally for both knee and hip replacement (3.0% vs. 4.6% and 2.1% vs. 4.6%, respectively).

In addition, CJRI uses cumulative summation analysis to measure statistically significant infection trends and has achieved rates that are significantly lower than the national averages for primary knee and hip replacement surgery (0.3% vs. 0.7% and 0.6% vs. 1%, respectively). These efforts have led to an improvement in the value equation at CJRI, and the contribution margin per primary joint replacement procedure has increased from $7,000 in 2007 to $12,000 currently.

Readmission and infection rates at CJRI as compared with national benchmarks

  Click To Enlarge.

Patient satisfaction has also improved as a result of ongoing monitoring of these metrics, allowing for actionable adjustments to patient care processes. HCAHPS (Hospital Consumer Assessment of Healthcare Providers and Systems) scores for CJRI now consistently are approximately 98%, a substantial increase from initial scores of 82% for the same services prior to the creation of CJRI. PROMs also have indicated that patients have improved ability to partake in physical activities, with the average HOOS score improving from 56.9 preoperatively to 86.8 at 6 months postoperatively and the average KOOS score improving from 54.7 preoperatively to 74.5 at 6 months postoperatively.

Average HOOS and Average KOOS for patients undergoing hip and knee replacement at CJRI

  Click To Enlarge.

Lessons Learned

  • Trust and transparency: Establishing unwavering trust and transparency among all stakeholders, including providers and administrators alike, is essential. Without this fundamental element, resolving dauntingly complex organizational matters will be fraught with discord and disharmony.
  • Powerful data: Clean, credible, actionable data represent the principal tool that leadership can harness to guide organizational adaptations associated with nationally evolving expectations of health care.
  • Standardized clinical protocols: Implementing standardized clinical protocols, the basis for reducing variation and standardizing care delivery, is a challenge for health care organizations. CJRI has learned two key lessons in that regard: first, that it is critical to align all stakeholders around a common definition of high-value care (the most positive outcomes achieved at the lowest costs) and second, that a robust and consensus-based process is necessary to ensure that every participant has an opportunity to provide thoughtful input.
  • Recognition of caregiver roles: It is incumbent on health care leaders to frequently and openly recognize the essential contributions of each caregiver, bedside and beyond, to the overall patient experience.

Next Steps

Looking to the future, CJRI’s leadership remains committed to further internal improvements while extending its business structure to other specialties and service lines within Saint Francis. In 2015, Trinity Health, the second-largest Catholic health system in the U.S., acquired the Saint Francis Hospital system so that it is now part of a new five-hospital Regional Health Ministry, Trinity Health Of New England. In light of this acquisition, CJRI now sees an opportunity to scale its model across the region and potentially to the >90 hospitals in the Trinity Health system.


Acknowledgements: We would like to thank Jacob Lippa, MPH, and all interviewees for their exceptional support in the writing of this case study.

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