EXPANDING BOUNDARIES Patrick C. Hsieh, MD, director of the minimally invasive spine program at the USC Spine Center, works to remove spinal tumors.

Opportunities still abound in outpatient spine, but they have a warning label attached. "This isn't the old outpatient surgery game of 15 years ago, where as long as you got the cases, you were going to make a lot of money," says Sanjit Mahanti, MHA, chief hospital business development officer at Keck Hospital of USC in Los Angeles. "It's a business where you have to manage all the parts and pieces of it."

The day-to-day includes an array of variables and moving targets that demand full attention. That's on top of the need for highly skilled surgeons and the upfront costs, which are steep.

"There's a lot of cost outlay you need to deal with," says Mick Perez-Cruet, MD, MS, vice-chairman and professor at the department of neurosurgery, Oakland University William Beaumont School of Medicine, in Royal Oaks, Mich. The list, says Dr. Perez-Cruet, includes:

• a microscope (at least $200,000, can go much more);
• OR tables (around $100,000);
• instrument sets (starting at about $50,000 each); and
• fluoroscopic units (between $100,000 and $300,000).

Ongoing costs
Once you're up and running, you'll need to diligently manage the ongoing costs. You need physicians who are more than just adept. They also need to be cost-conscious.

"There's potential to really reduce prices on implants, screws, discs — all those things can actually be standardized if there's incentive to do so," says Mr. Mahanti. "That's always been the hard part, especially with very highly skilled spine surgeons. They all have their nuances and preferences. But if you're not controlling your spinal implant costing, you're going to get destroyed."

An alternative approach is to negotiate case costs. That's the approach taken by Karen Reiter, RN, CNOR, RNFA, chief operating officer of the Diagnostic and Interventional Surgical Center in Marina del Rey, Calif. "We communicate to surgeons that they can use whatever they want, which makes us very attractive to them, but that we're only going to pay so much," she says.

Surgeons are happier and vendors end up working to bring their prices down, says Ms. Reiter. "If I have a vendor who doesn't meet what I want to pay, I involve the surgeon in the discussion. Plus, surgeons love the competition with other surgeons. They all think they're better than the others at containing costs."

Minimizing costs and maximizing efficiency is the challenge, agrees Mike Campbell, RN, MBA, executive administrator of perioperative services at Keck, and it's a challenge that's likely to get tougher in the coming years. "As we move toward the implementation of healthcare reform, everything will be based off of high volume and low margin," he says, "so efficiency as it relates to cases, to turnover of cases, to expenditures related to supplies, implants — all of those things come into play."

SPEAK UP In addition to ensuring quality outcomes, teamwork can play a role in containing costs.

Medication rising
Get one cost under control, and another may become a challenge. Recently, medication prices have become an especially volatile variable, says Ms. Reiter. Items that used to cost $2 or $3 have had to be back-ordered because they're in such short supply, and when they've become available, the price may have risen to $30 or more. For example, there used to be 5 manufacturers for glycopyrrolate — a reversal agent for neuromuscular blockers that's important in spine cases — and now there's only one, she says. "There was a time when it was 76 ? a vial, then it shot up to $14 — and sometimes we have to use 3 vials."

You can try to curb wasteful habits. Biologics, says Ms. Reiter, "cost a fortune" and many surgeons are used to opening vials that contain 2.5cc (about $650) when a vial that contains 0.5cc (about $95) will suffice. Her staff, too, is very aware of costs and is encouraged to speak up if a physician appears on the verge of opening a larger vial than needed.

Reimbursements
Spine centers are also feeling a pinch with payors who seem to be looking for any excuse to deny claims, says Ms. Reiter. One wrong code out of several may result in a denial for the whole procedure.

Ms. Reiter's center is taking a proactive approach, reevaluating and trying to improve every step of the revenue cycle. Instead of responding to denials after the fact, for example, she communicates with doctor's offices to provide documentation that patients had physical therapy and tried anti-inflammatories before having surgery.

"Now we have a pre-team get evidence of all conservative management and upload it to the billing company to submit with the claim," she says. "It speeds up payment and increases our revenue."

On the plus side of the ledger, reimbursements for spine patients are generally good, in part because the spine population includes both younger and more commercially insured patients.

Patients are better educated, now, too, and more willing to pay their portions of the bill upfront, says Ms. Reiter. "We collect a lot of out-of-pocket costs on the way into surgery," she says. "We used to have to talk patients into it, but now they seem to know they have to pay their share."

The possibilities
Despite the challenges, the opportunities are real. The list of spine procedures routinely being done on an outpatient basis is growing quickly and includes numerous surgeries that were almost solely confined to inpatient facilities a few years ago. The rundown includes microdiscectomy, percutaneous kyphoplasty for compression fractures, MIS one- and two-level lumbar decompression, minimally invasive cervical foraminotomy and minimally invasive lumbar lateral interbody fusion.

"As we push the envelope more," says Mr. Mahanti, "our surgeons think they can start doing anterior cervical fusions and uncomplicated artificial discs, as long as they're single-level. Further down the road, they think we'll be able to do more and more lateral minimally invasive lumbar fusions."

Instruments and implants have evolved dramatically in recent years, making the outpatient environment that much more attractive and suitable. More sophisticated microscopes, better digital integration, high-definition visualization — everything points toward a continuing trend.

"Getting to a ruptured disc doesn't have to involve muscle and bone anymore," says Ms. Reiter. "Patients have a teensy little incision, there's way less post-op pain, they mobilize quicker, they get back to work quicker, there are fewer complications and we can do surgeries on a larger variety of patients."