There are several new trends crucial for orthopedic surgeons to understand emerging in the healthcare space. Orthopedic surgeons and industry experts discussed some of these changes during a session at the American Academy of Orthopaedic Surgeons 2013 Annual Meeting titled "Accountable Care Organizations and Bundled Payments: Passing Trends or a New Paradigm?" "Despite spending more per capita than any other country in the developed world, our outcomes are in the middle somewhere and despite that a large part of our patients are uninsured," said Kevin Bozic, MD, MBA, of San Francisco, who moderated the session. Here are five trends the expert panel discussed.
1. Accountable care organizations. Accountable care organizations and bundled payments are moving toward pay-for-performance instead of the traditional fee-for-service, and they pass more risk for services onto the provider. There are currently several ACO demonstrations and pilot models, led both by the government and private payors, incentivizing providers to change practice models and compensation.
"Many people have functioned in the fee-for service arena," said John Cherf, MD, MPH, MBA, of Chicago. "Most of us had very good financial performance under that model of payment. The new legislation, in the interest of the government, is to…take on more risk. That is done by bundled payment, episode-based payment, risk sharing and ACOs."
The initial attempt at these new payment models, Acute Care Episodes, focused on cardiac and orthopedic procedures. The government bundled payment to improve quality and efficiency, but not many surgeons participated. Instead, the market has seen more interest from orthopedic surgeons in gain sharing. The surgeons can partner on initiatives like implant savings and increased use of standard pathways.
"The government is open for us to come to the table to be better compensated and improve the quality of care," said Dr. Cherf. "The government is looking for a change in cost from 2 to 3 percent."
2. High deductible health plans. Orthopedic surgeons and physician groups have the opportunity to participate in multiple ACOs and partner with insurance companies on initiatives to lower the cost of care and improve the quality.
"There is a lot of money in the actuarial insurance risk budget which perhaps as providers we could profit from and help society by increasing the value and decreasing cost," said Dr. Cherf. "We can no longer be ignorant and illusive for cost."
One of the issues with ACOs is patients don't have skin in the game; while insurance companies and providers are incentivized to control costs, patients aren't encourage to consider the cost of their care. However, high-deductible plans and health savings accounts are becoming more popular around the country, and they encourage patients to consider costs and find savings where possible.
"High deductible health plans have a bigger opporutnity to change our landscape," said Dr. Cherf. "[A recent Wall Street Journal] article showed industry is pushing this model and in one year they saw a decrease in PPO plans; most were jumping on the band wagon of the high deductible plan."
3. Care management. Orthopedic surgeons and other specialists are trained as surgical care providers, but the changing healthcare landscape is focused less on siloed care and more on comprehensive patient care management. There is an opportunity for orthopedic surgeons to lead the care management team for patients, shifting their focus from just surgical treatment to include conservative care and prevention as well.
"In the past we have considered ourselves orthopedic surgeons and proceduralists," said Dr. Cherf. "Now we are the manager. What we are best qualified to do is be a musculoskeletal manager. Economically, that might be a good idea."
Alignment with other providers will become increasingly important to survive in the future of healthcare. Orthopedic surgeons and groups need a strong leader who can promote these alignments and partnerships going forward.
“If anyone doesn’t think in our system we are dysfunctional, I’d be surprised,” said Steven F. Schutzer, MD, of Farmington, Conn. “The hypothesis is that there will be enough financial incentive with bundled payments to actually incentivize entities to collaborate and align to improve standardization, operational efficiencies and care.”
Surgeons can also take the lead on prevention by speaking with primary care physicians and coordinating which specialists patients should see for various conditions and injuries. They can also educate patients about what habits they should avoid to prevent injuries or degenerative conditions in the future.
“Take a broader view of the education by educating physicians and the population on bone health and avoiding injury and improving costs,” said Geoffrey Walton, MHA, vice president of physician alignment and payment reform with Stryker.
4. Bundled payments and global episodes of care. Bundled payments offer a global fee for services payments. Depending on how the bundle is arranged, it could include pre-surgical visits, anesthesia, surgery, rehabilitation and follow-up care. If there are complications or costs beyond the negotiated global fee, providers must foot the bill.
“[Some wonder if] it is just another way for commercial payors to shift risk,” says Dr. Schutzer. “Bundled payments at our institution have clearly created value. We have one bundled contract and are working two others. This allows you to compete in the new market.”
To participate and lead new payment models, surgeons must understand the cost per case, which includes implant and medication prices. “This is the time to call the financial people and drill down to the direct cost of each element in your program,” says Dr. Schutzer. “Determining the hospital-based cost is the first step of the pricing of the bundle.”
Surgeons sometimes enter into comanagement agreements with the hospital, which compensates physicians for their efforts to improve quality and lower cost. Dr. Schutzer found that bundling payments reduced admission rates and implant costs and increased surgeon and anesthesia compliance with standardization.
“The bundling clearly changes the culture of trust and aligns incentives and goals,” says Dr. Schutzer. “It cuts out waste. You do what is better for the patient and it can support the entrepreneurial behavior of the physicians. Even if you never bundle payments, these are good steps to go through to drive efficiencies.”
5. Standadized protocol. The healthcare industry is paying more attention to standardizing care. New ACOs and bundled payments are incentivizing orthopedic surgeons to establish evidence-based medicine guidelines that consider physician preferences and key metrics for providing care.
“We know there are a lot of patients along the continuum, but our goal is to move patients to the the lower risk area,” says Lois Elia, Vice President, AdvocateCare, AdvocatePhysician Partners. “We identify high risk populations--those who have great resource needs--and utilize care managers and provide in-home assistance if necessary. “
Within the new payment models, surgeons can innovate by considering the evidence for best practices that reduce variation and figure out where there are opportunities for everyone within the care process to provide value. Figure out how to work with downstream partners for more effective outcomes and lower cost of care, according to Ms. Elia.
More Articles on Orthopedics:
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7 Hospitals Expanding Orthopedic and Spine Programs
1. Accountable care organizations. Accountable care organizations and bundled payments are moving toward pay-for-performance instead of the traditional fee-for-service, and they pass more risk for services onto the provider. There are currently several ACO demonstrations and pilot models, led both by the government and private payors, incentivizing providers to change practice models and compensation.
"Many people have functioned in the fee-for service arena," said John Cherf, MD, MPH, MBA, of Chicago. "Most of us had very good financial performance under that model of payment. The new legislation, in the interest of the government, is to…take on more risk. That is done by bundled payment, episode-based payment, risk sharing and ACOs."
The initial attempt at these new payment models, Acute Care Episodes, focused on cardiac and orthopedic procedures. The government bundled payment to improve quality and efficiency, but not many surgeons participated. Instead, the market has seen more interest from orthopedic surgeons in gain sharing. The surgeons can partner on initiatives like implant savings and increased use of standard pathways.
"The government is open for us to come to the table to be better compensated and improve the quality of care," said Dr. Cherf. "The government is looking for a change in cost from 2 to 3 percent."
2. High deductible health plans. Orthopedic surgeons and physician groups have the opportunity to participate in multiple ACOs and partner with insurance companies on initiatives to lower the cost of care and improve the quality.
"There is a lot of money in the actuarial insurance risk budget which perhaps as providers we could profit from and help society by increasing the value and decreasing cost," said Dr. Cherf. "We can no longer be ignorant and illusive for cost."
One of the issues with ACOs is patients don't have skin in the game; while insurance companies and providers are incentivized to control costs, patients aren't encourage to consider the cost of their care. However, high-deductible plans and health savings accounts are becoming more popular around the country, and they encourage patients to consider costs and find savings where possible.
"High deductible health plans have a bigger opporutnity to change our landscape," said Dr. Cherf. "[A recent Wall Street Journal] article showed industry is pushing this model and in one year they saw a decrease in PPO plans; most were jumping on the band wagon of the high deductible plan."
3. Care management. Orthopedic surgeons and other specialists are trained as surgical care providers, but the changing healthcare landscape is focused less on siloed care and more on comprehensive patient care management. There is an opportunity for orthopedic surgeons to lead the care management team for patients, shifting their focus from just surgical treatment to include conservative care and prevention as well.
"In the past we have considered ourselves orthopedic surgeons and proceduralists," said Dr. Cherf. "Now we are the manager. What we are best qualified to do is be a musculoskeletal manager. Economically, that might be a good idea."
Alignment with other providers will become increasingly important to survive in the future of healthcare. Orthopedic surgeons and groups need a strong leader who can promote these alignments and partnerships going forward.
“If anyone doesn’t think in our system we are dysfunctional, I’d be surprised,” said Steven F. Schutzer, MD, of Farmington, Conn. “The hypothesis is that there will be enough financial incentive with bundled payments to actually incentivize entities to collaborate and align to improve standardization, operational efficiencies and care.”
Surgeons can also take the lead on prevention by speaking with primary care physicians and coordinating which specialists patients should see for various conditions and injuries. They can also educate patients about what habits they should avoid to prevent injuries or degenerative conditions in the future.
“Take a broader view of the education by educating physicians and the population on bone health and avoiding injury and improving costs,” said Geoffrey Walton, MHA, vice president of physician alignment and payment reform with Stryker.
4. Bundled payments and global episodes of care. Bundled payments offer a global fee for services payments. Depending on how the bundle is arranged, it could include pre-surgical visits, anesthesia, surgery, rehabilitation and follow-up care. If there are complications or costs beyond the negotiated global fee, providers must foot the bill.
“[Some wonder if] it is just another way for commercial payors to shift risk,” says Dr. Schutzer. “Bundled payments at our institution have clearly created value. We have one bundled contract and are working two others. This allows you to compete in the new market.”
To participate and lead new payment models, surgeons must understand the cost per case, which includes implant and medication prices. “This is the time to call the financial people and drill down to the direct cost of each element in your program,” says Dr. Schutzer. “Determining the hospital-based cost is the first step of the pricing of the bundle.”
Surgeons sometimes enter into comanagement agreements with the hospital, which compensates physicians for their efforts to improve quality and lower cost. Dr. Schutzer found that bundling payments reduced admission rates and implant costs and increased surgeon and anesthesia compliance with standardization.
“The bundling clearly changes the culture of trust and aligns incentives and goals,” says Dr. Schutzer. “It cuts out waste. You do what is better for the patient and it can support the entrepreneurial behavior of the physicians. Even if you never bundle payments, these are good steps to go through to drive efficiencies.”
5. Standadized protocol. The healthcare industry is paying more attention to standardizing care. New ACOs and bundled payments are incentivizing orthopedic surgeons to establish evidence-based medicine guidelines that consider physician preferences and key metrics for providing care.
“We know there are a lot of patients along the continuum, but our goal is to move patients to the the lower risk area,” says Lois Elia, Vice President, AdvocateCare, AdvocatePhysician Partners. “We identify high risk populations--those who have great resource needs--and utilize care managers and provide in-home assistance if necessary. “
Within the new payment models, surgeons can innovate by considering the evidence for best practices that reduce variation and figure out where there are opportunities for everyone within the care process to provide value. Figure out how to work with downstream partners for more effective outcomes and lower cost of care, according to Ms. Elia.
More Articles on Orthopedics:
Desert Orthopedics Enters Into Orthopedic Service Line Agreement With St. Charles Health System
Dr. David Altchek to Perform Knee Surgery on Philadelphia 76er Andrew Bynum
7 Hospitals Expanding Orthopedic and Spine Programs