Shifting From Volume to Value in Outpatient Total Joint Replacement

Author: OSL Editor

By 2030, total hip replacements are expected to grow by 179% to 572,000, and total knee replacements are expected to grow by 673% to 3.48 million, according to the 2007 study by Steve Kurtz, published in the Journal of Bone and Joint Surgery (JBJS).

Waiting room in a hospitalThis study was done to determine what the future manpower needs would be to supply orthopedics to the growing population, explains Dr. James M. Weiss, President, Orthopedic Surgery at the Orthopedic & Sports Rehab Center. The results showed there would be so many joint replacements done by 2030 that it would completely outstrip the existing and potential future supply of orthopedic surgeons.

In other words, there wouldn’t be anyone to follow up on these patients, and it would be unsustainable. “If every orthopedic surgeon, including myself, suddenly only did joint replacements, there still wouldn’t be enough surgeons to accommodate the demand,” Dr. Weiss says.

In his presentation at the 2018 Musculoskeletal Summit, Dr. Weiss shared a perspective on the present and future trends in the surgical care of orthopedic patients, discussing current cost concerns and bundled payment solutions. Most importantly, he looks at the volume versus value debate, outlining the true equation needed in order to achieve timely, efficient and high-quality patient-oriented care.

What are the Cost Concerns?

When looking at the total joint replacement, there are myriad ways of evaluating effectiveness. According to CMS, TJR is the greatest and the most cost-effective operation that’s ever been devised.

There is one standard metric called Quality Adjusted Life Years (QALY), explains Dr. Weiss, which is used to judge how cost-efficient a particular operation is, and whether payers or Medicare should pay for it. “About $100,000 for every QALY is considered cost-effective,” Dr. Weiss says. “Total joints come in way under this, and therefore they win the race for the greatest operation ever devised for being most cost-effective.”

Surprisingly, the largest line in the Medicare budget is not cancer, strokes or heart attacks, but joint replacement. Due to these cost concerns, there has been pricing pressure on implants and consolidation of supply chains. In 2014, 400,000 joint replacements were done or paid for by Medicare for 7.6 billion dollars, notes Dr. Weiss. And that was only for inpatient care. “This number is unsustainable,” he says. “And something has to be done for cost containment to push that price down.”

Bundled Payments: Benefits and Drawbacks

One solution that has been put in place to answer to this demand is bundled payments. “Bundled payments are CCJR and private carriers’ attempt at risk mitigation,” says Dr. Weiss. “They want to offload their risk onto the provider or surgeon.”

There are many benefits to bundled payments; one of which is the fact that bundled payments require healthcare providers to place a focus on what the cost centers are. “Traditionally, care has been provided by historic means,” says Dr. Weiss. “Orthopedic surgery is an apprenticeship, so you do what the person you were trained under did.” But now, you have to look at where you’re spending your money – and there are different ways of doing this, such as zero-based budgeting.

Further benefits of bundled payments include improved pre-operative screening and optimization of at-risk patients, in addition to increased patient education.

The challenges with bundled payments arise when you look at the patients that are flagged as at-risk patients. “In some aspects, this is indirect care rationing. Those patients who have a BMI of over 40 or have other risk factors, some of them are not modifiable factors,” says Dr. Weiss. “Although these patients are told, ‘You can’t have your surgery now,’ to some extent they will never be able to be optimized and brought into the bundle. They end up getting marginalized – there’s not anyone willing to take care of them because they can’t fit into the bundle.”

Bundled payments are typically only available to large groups with the capital to invest in data analytics, Dr. Weiss continues. A small private practice simply cannot afford to do all the follow-up and analysis that’s needed.

Volume Versus Value

The volume versus value debate has been commonly discussed in the orthopedic surgery world when looking at how our physicians and surgeons incentivize. In fee-for-service, there’s an incentive to “do more,” says Dr. Weiss, and we don’t want volume, we want value.

If you look at other healthcare entities—other than surgeons—who assume some risk for accountable care organizations or patient-centered medical home, some of their dollars are at risk (such as bonuses or reimbursements), but their baseline payments are not at risk. So is volume to value really the equation?

In order to deconstruct this argument, we must first look at how we define value. Patient satisfaction is at the core of this because, in bundled payments, you are judged on your satisfaction rates. This is nothing new – physician and surgeon-based practices have always completed satisfaction surveys and follow-ups. Patients are consumers, and consumers are connected. They’re going to express their satisfaction by visiting Health Grades online and evaluating you. They’re going to talk to their family and friends about you. This is how you build your reputation – the most valuable asset you have.

You’re not being incentivized for volume; you’re being incentivized for satisfaction and outcomes. If you take good care of your patients, then more patients will come and see you. “The volume is generated by the value, not the other way around,” says Dr. Weiss. “And what business entity in the world is not trying to gain market share value?”

Risk Optimization and Value

Healthcare is like any other industry. It’s competing to be better, faster and cheaper. “Do practices compete on cost? Yes, of course,” says Dr. Weiss. “What’s a bundled payment initiative? Really, it’s another name for a discount. A bundled payment is a cost shift or a risk shift back to the provider. Instead of them paying for it, you are.”

Hospitals may be signing bundled payments for value and for satisfaction – but most of all, it’s about volume. “The incentive is not changed here at all,” says Dr. Weiss.

When a patient comes to you and they are at increased risk, you try to optimize that patient. “You try to get their blood pressure and blood sugar under control,” says Dr. Weiss. “But the majority of these patients, in my experience, who have BMI of 40 or over, you’re never going to get them back to the number you want to get.” So what do you do with that patient?

In his practice, Dr. Weiss has a discussion with the patient to explain the increased risk of complication. “I say, ‘I will go through that with you and I will be there for you and if you have a complication or infection, I will take care of that for you.’ That’s what I’m incentivized to do,” he explains, “and I let the patient make that decision.”

The True Equation

In a bundle, that patient is never going to be optimized and no one is incentivized to take care of them. This comes back to reputation. Do you really want that patient to get another opinion down the street from the orthopedist who’s not in the bundle? What happens when that surgeon tells them they’re at increased risk, but that they can have the surgery done? What happens when they tell the patient the only reason the other surgeons won’t operate is that they’re in a bundle and they don’t want to lose money on your case? “Guess what? There goes your reputation,” says Dr. Weiss. “You just put the cost in front of the patient.”

The real equation is your reputation. Ask yourself: what’s the single greatest asset you have in your life? The answer is your word. “If you have your word and people can trust you, you’re going to have a good life,” he says. “Never give that up, because trust is hard to earn, it’s easy to lose and almost impossible to get back again.” At the end of the day, the true equation is volume + value = trust.

Submit a Comment

Your email address will not be published. Required fields are marked *