The challenge with value-based care for orthopedic surgeons

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Orthopedic surgeons face a unique challenge in the transition to value-based care as a procedure-driven specialty, one industry leader says. 

Daniel Chan, MD, is chief of orthopedic surgery and sports medicine and the medical director of orthopedic trauma for the Memorial Healthcare System in Fort Lauderdale, Fla. He recently spoke with Becker's about consolidation in the industry, the migration of procedures to outpatient settings and his outlook for the industry in the next few years. 

Editor's note: Responses were lightly edited for clarity and length.

Question: What are some of the biggest challenges facing the orthopedic surgery industry today?

Dr. Daniel Chan: It's a combination of things. Continuing declining reimbursement is a problem, especially for orthopedic surgeons that remain in a private practice setting. It's increasingly challenging to remain in private practice and keep the practice sustainable. Everything starts with Medicare and the private insurers will base their fee schedule or reimbursement based on what Medicare sets. So as long as there's a continuing decline in Medicare reimbursements, the private insurers will follow. Part of it, in all honesty, is that physicians or healthcare providers in general have not been the greatest at advocating for our own cause. Oftentimes, we see, for example, payments to hospitals staying the same or increasing, whereas physician compensation continues to decline. This is despite the fact that when you look at total healthcare costs, physician reimbursement is maybe 15 percent. So even though we're the target of many of the cuts, we're not responsible at least from a reimbursement standpoint for a majority of the costs. 

The other big thing is that as we transition from a fee-for-service to a value-based care model in many areas of healthcare, the challenge will be to see how orthopedic surgeons fit in that new ecosystem where we're no longer paid on how many procedures we do, it's on how we can meet some other type of either outcome or total cost of care metric.  

In orthopedic surgery, it's unique because with primary care, it's pretty straightforward in some sense because you're just managing the total cost of care. So you can choose to be more efficacious in how you prescribe medications or making sure your patients don't get sick and don't go to the hospital. So cost avoidance is pretty straightforward. In orthopedic surgery, which by definition is a procedure-driven specialty, you have to kind of step back a little bit and think of what that really means. Some organizations are branching out and trying to take risk on managing diagnoses. So for example, managing knee osteoarthritis in general. Whether you have surgery or not, do you need an injection? Do you need physical therapy? Can we avoid surgery? So it's just shifting that mentality of trying to get as many surgical patients in your door versus managing a population of patients in a more holistic way and then potentially if you manage that population effectively and can save the insurance company cost, then you can get some shared savings. But it's still difficult because as surgeons, we want to do surgery, obviously for appropriate reasons, but it's a different mentality when you have to step back and think, well, how can I manage, globally, musculoskeletal spend and seeing where there are inefficiencies, seeing where there are potentially procedures that could be delayed or obviated in lieu of conservative treatments. The challenge there is who gets the savings, who's included in the network, and those are some of the challenges facing orthopedic surgeons going forward. 

Q: What technology are you following that is improving patient care and efficiency?

DC: I think robotics in joint replacement, knee and hip replacement, more so on the knee side has definitely matured a lot in the past several years. There are multiple competitors in that space. And like anything else, a new technology is going to struggle to find the hard clinical evidence of patient outcome benefits, but it almost doesn't matter because it's essentially a marketing tool and things like robotics and navigation are becoming almost standard practice and standard of care, so that patients seeking orthopedic services will preferentially choose a surgeon that offers those things. It's similar to on the hip replacement side offering, for example, an anterior approach, which theoretically has better outcomes. And now on the knee replacement side, it's robotics, and then down the line, potentially augmented reality or even artificial intelligence to help with decision making. 

Q: What predictions do you have for the industry in the next five to 10 years?

DC: We're definitely going to see a continued migration of surgery from the inpatient setting to the outpatient or ASC setting. There's going to be increased consolidation, and parties are going to seek to align themselves with larger organizations, whether it be private equity [or] large healthcare systems. We're going to see an increase in value-based care and as insurance companies mature and payers mature, we have networks where now the insurance company and the provider are basically the same person, so we call it pay "payviders," is the term I've heard. Or a lot of large employers are self-insuring, cutting out the insurance company altogether. So just a lot of change in how healthcare is paid for and delivered, and that's going to be a challenge to keep track of. 

Q: How can surgeons keep their practices sustainable under increased consolidation?

DC: I think it's just offering patients some of that hands-on approach they potentially would not get with the big kind of corporate entity, increased access, increased availability. The solo practitioner will have to find alternative revenue streams, some other kind of ancillary revenue. A lot of the people that are successful private practice physicians leverage social media effectively, so putting content out there to attract patients, to educate patients, to generate views, and potentially that can drive patients to their doors. We know that orthopedic surgery is probably the most patient consumerism-driven specialty in medicine, where for elective services patients will shop oftentimes. And I've definitely noticed that in my own practice. Probably 80 to 90 percent of my patients come to me either through word of mouth or through online profiles, Instagram, Twitter, LinkedIn, social media, Google reviews. So those are some that if a solo practitioner does well and has a good online persona, can still allow them to have patients come to their door, but obviously that's a separate issue from reimbursement with the payers. 

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