Why Dr. Nicholas Grosso wants to approach payers as equals

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Nicholas Grosso, MD, said he hopes the physician-payer relationship can evolve to be more cooperative than adversarial. The mindset is one of the tools that he hopes will strengthen The Centers for Advanced Orthopaedics.

Dr. Grosso, who is president of the Bethesda, Md.-based orthopedic group and management services organization MedVanta, spoke with Becker's about the strategies that he is leveraging into 2024.

Note: This conversation was lightly edited for clarity and length.

Question: What are your top goals for the year?

Dr. Nicholas Grosso: What we're really doing is trying to embrace the future, which is right now anybody's guess. What we see as the most likely scenarios going forward is value-based care  is going to become more and more prevalent as time goes on, although that term, value-based care, means a lot of different things to a lot of different people. What we see happening over the next number of years is a lot of things are going to be happening in parallel. 

You're still going to have fee-for-service — that isn't going anywhere. It's going to be around for probably the foreseeable future. But you're also going to have all these different programs that are going to pop up, whether it's a bundled payment program with individual states or the federal government, or whether it's a shared savings program with individual payers. Each of these programs are going to have different rules, different criteria and different metrics. Eventually we think we're going to get to the point where we're going to go full capitated care. We think that's the ultimate value-based care. But in order to do that, you have to have certain things that none of us have right now, which are the tools necessary to manage these programs. 

So our goal for 2024 is to continue what we started in 2023, which is building our platforms. MedVanta has invested millions of dollars into our analytics platform and our digital front door, and our ability to provide care remotely. We think that's really going to set us up for the future as these programs begin. We're in our third year of a basically a bundle type program with the state of Maryland. We've done very well, actually. We've been the best performing entity in the state by far. We're also in a shared savings program with one of our major payers, and we're in the final negotiating phases with other of our payers. 

Q: When it comes to payer negotiations, what strategies have helped you have an advantage?

NG: The relationship between payers and physicians has been a long and tumultuous one. I was in the Army for 23 years, and then I went into private practice when I got out. That was a long time ago, back in 2001, and I couldn't get over the animosity and negativeness. They'd come back every year and try to beat you down a few more dollars per CPT code. We were taking less and less every year. It got to the point where it really was a very one-sided relationship with the payers, and the physicians unable to really have any negotiating power. Even if you were in a 10- or 12-physician group back in the early 2000s, it really didn't mean anything to the payers because they would just as soon dump you for anybody else, and they played one against the other. It was a race to the bottom. 

When we formed CAO, it put us in a much stronger position to negotiate. We were able to negotiate better reimbursement rates on our fee-for-service. We tried to build relationships with the payers, and we had better relationships with some because we were really built to get to this value. We saw the writing on the wall. We knew value-based care was going to come eventually and just took a lot longer than we thought it would, and so we kind of built ourselves to do that and leave the talking to the players the whole time saying we're ready, and they really haven't been. Now they're starting to get that way as they update and modernize their systems. 

I really hope going forward it's more cooperative. I mean, there's always going to be that tension there. They're the payer and we're the provider. But as we move toward capitated care, that kind of shifts the dynamic. I'm hoping it's not just an adversarial relationship where we go to the table and try to see who can take advantage of each other, because I think if we work together, we could get to that value-based care. 

Q: How else do you plan to approach the different economic headwinds that independent practices have been facing?

NG: They obviously continue with CMS cutting physician pay. Although I do think Congress is going to move on that, but we'll have to wait and see what happens. The key is, if you're negotiating with a payer from a position of at least being equal, they can't stop us for being too big. We cover too much of a geographic area, and whether they like it or not, they have to work with us. I hate saying that to make it sound like we're trying to be a bully, and we're not. We're just trying to be fair because our costs go up every year or our salaries go up, our prices go up, and everything goes up. Cost of living goes up. If they want to keep our doors open and provide care for their patients, we've got to make ends meet.

Q: Circling back to data and analytics, can you talk more about what you're planning to leverage this year and any advice you have for other practices interested in leveraging data?

NG: There's so many different aspects of being able to have your data and analyze it correctly, and one of them is go back to the negotiations so we can go back to them and say, "Hey, look, we're a little more expensive than the guy down the street, but our outcomes are better. We see the patients less often. We use less physical therapy." If you could show that, it really makes negotiations go a lot smoother. 

What I would say to the other guys out there is this is a hugely expensive enterprise to undertake. The average group out there, unless they're part of one of the mega groups, they're not going to be able to afford to build these tools on their own. They're going to have to rely on third-party vendors. 

That's what some private equity-based groups are doing. They're building these same platforms. They're offering to provide the same services to these smaller groups that they just come on board. MedVanta is doing the same thing. We think our model for the physician that wants to remain fully independent in private practice is superior, because we're not PE-backed. Physicians are fully independent, and they can be owners. The way we built MedVanta is we want every physician to be an owner so no one's taking advantage of each other. 

Q: When you think about the outlook for independent spine and orthopedic surgeons in 2024, should they be optimistic or worried?

NG: I'm an optimistic guy, so I think they should be optimistic. There's headwinds, but there's nothing that we can't handle. No one's going to be going out of business. We're all going to be OK. You just gotta be smart about what's going on. The groups I worry about are the ones that have their heads in the sand and aren't really preparing for this. But if they get their heads up and they're paying attention to what's going on and they know what's happening in the market, and if they're prepared for it, they're going to do fine.

Q: Do you think unprepared groups can do well if they start preparing now, or is it too little, too late?

NG: There's always hope for them. But what I worry about is a lot of these groups get pulled ahead and they panic and run to a hospital, and the hospital buys them. Or they run to a group and let a private equity group buy them. So I would prefer them to pay attention sooner rather than later so they don't panic and they make reasonable decisions and look at all the options before acting.

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