Cost saving efforts as a result of healthcare reform has taken over the healthcare industry in various forms, including accountable care organizations, population health management and bundled payments.
Bundled payments, though popular for many orthopedic procedures, are currently not as common for spine surgeries. Should physicians and spine practices prepare for bundled payments to transform the way they make money?
Trish Bowling is the CEO of the Texas Back Institute in Plano and Paul Slosar, MD, is president of the San Francisco-based SpineCare Medical Group in Daly City, Calif., and medical director of Spine Care Institute of San Francisco.
While Ms. Bowling doesn't think bundled payments are the future of spine reimbursements, she does believe they have a lot of opportunity to impact healthcare efficiency in the area of spine with strong physician leadership and financial alignment with physicians.
Both Ms. Bowling and Dr. Slosar have extensively looked at spine bundled payments and offer their recommendations for physicians and practices alike.
Question: How are you approaching bundled payments?
Trish Bowling: Our approach to bundled payments has been to gather the data necessary to compete effectively under a bundled payment system. Texas Back Institute has been tracking certain outcome data on our patients for many years. The type and quantity of outcome measures continues to increase based on criteria impacting quality and efficiency of care.
We have refined our systems to allow better reporting of outcomes and to add additional data points pertinent to evaluating cost, so that we are in a position to control those costs and hold others accountable that are in the entire patient’s continuum of care.
Paul Slosar: Personally, I have spent the last 18 to 24 months diving deeply into these issues and have great optimism that the cost savings surgeons can create are substantial. I am moving aggressively to position our practice for the evolution to bundled payment strategies rather than have a hospital control this and dictate terms to me.
Just as successful practices seek expert guidance for legal and accounting advice, we now must find similar experts to partner with in order to financially benefit from our cost-saving strategies in bundled payment plans.
Q: Where should practices start if they haven't yet looked into bundled payments?
PS: I have concluded that spine practices will need business partners to represent their groups in order to negotiate and generate profits from bundled payment strategies. To date, one company has distinguished itself as the early leader, Episode Management Solutions out of Nashville. Most spine practices have a great depth of talent in working traditional fee-for-service reimbursement strategies but have neither the experience nor capacity to negotiate favorable bundled payment terms from payers.
Over the past 20 plus years surgeon ingenuity has brought countless medical device advances to the market resulting in remarkable improvements for patient outcomes. That same surgeon IP will soon be needed to reduce the cost of spinal surgery while preserving good outcomes. We are the only ones who can really bend the cost curve and with optimally structured bundled payment strategies, with the right business partner, we can participate in our fair share of the savings only we surgeons can produce.
Q: What specific data can practices track?
TB: We are tracking surgical outcomes such as infection, reoperation, readmission, dural tears and mortality rates for all of our patients/surgeons. For the more complex cases, we are also tracking many of the hospital metrics such as SCIP compliance, patient safety bundle and discharge data (discharge to home, SNF, LTACH, home health, physical therapy, etc.). We are tracking OR utilization and first-case on-time starts for specialized programs.
For all of our patients, operative and non-operative, we are tracking functional outcomes for their entire treatment plan. This includes the Oswestry Disability Index, Neck Disability Index, Visual Analog Scale and SF-12. We are just beginning to work with the hospitals on obtaining actual cost data. Spine practices should consider which medical protocols they have or can standardize within their organizations to limit variability.
Q: When should practices adopt bundled payments for spine?
TB: Timing is everything. It would be foolish to enter into bundled payment arrangements without full knowledge of costs or without the appropriate data to evaluate risk. Population management and bundled care payment mechanisms in the past have often been contracted without a full understanding of the relative risk. This has led to failure and loss for many organizations. Our approach is to be prepared for contracting by gathering the appropriate data to be smart about our contracting.
PS: Bundled payment pilot projects are emerging in very select markets and probably not on most spine surgeons' radar screens yet. Things are moving rapidly behind the scenes however and these programs will be a reality soon. I believe the whole space of reimbursements, including ACOs, bundles and episodes of care, is going to be the next big focus for spine and total joints.
Q: Do you have any timeline in mind for developing bundled payment contracts?
TB: Our timeline is one to two years; I do not want to introduce such contracts into our marketplace until the market is ready. It does not make sense to develop risk contracts until you have the data necessary to assess the risk that you are assuming. In addition, we do not want to drive down physician reimbursement rates in our marketplace.
Prematurely implementing bundled payments can force the doctors to work harder for less money. We must be smart about this risk, and we can be with the proper data and management.
Q: Are certain spinal procedures more likely than others to be contracted for bundled payments?
TB: We would be very comfortable taking risk on many of the elective cases for which the patients have limited co-morbidity issues, particularly single-level cases and often two-level cases, as well as, minimally invasive and uninstrumented cases. Also, we would limit the hospital facilities or programs in which we provide these procedures to those that we manage or have enough volume to effectively impact the extended quality of care.
Bundled payment arrangements do not make sense for some of the more complex reconstructions and deformity cases. Also, they are not appropriate for spine trauma.
Q: What are the biggest challenges?
TB: For complex spine cases, the biggest challenge in our market is identifying strong post-acute providers that can be held accountable for quality and efficiency outcomes. Another big challenge is the variability in the practice of spine. For most organizations, the biggest challenge is aligning all the providers involved in the patient care such that there is consistent and effective decision-making on both quality and cost. Data exchange does not readily happen among these providers, nor strong communication.
More Articles on Spine Surgeons:
Are Spine Surgeries Moving to Outpatient Settings? 7 Surgeons Discuss
NASS to Washington Post: Don't Condemn All Spinal Fusions
Dr. David Wong: Making Sense of Comparative Effectiveness in Spine Surgery