‘No way to save additional money’ but HOPCo found more than 20% in a fully managed MSK market
The bundled payment model has long been the standard tool for managing costs in orthopedic care. It defines a window of accountability — typically 90 days around a surgical procedure — and distributes responsibility for what happens inside it. For markets that have deployed these models aggressively, the prevailing assumption has been that the available savings have largely been captured.
Jason Scalise, MD, chief value officer at Healthcare Outcomes Performance Company, says that assumption reflects a narrow view of what orthopedic care actually costs.
“When you look at it from the lens of a population and not just from the lens of an episode of care, there is tremendous opportunity,” Dr. Scalise said during an episode of the “Becker’s Healthcare Podcast.”
To illustrate the point, he described a program involving roughly 120,000 members in a market with a long track record of bundled payment programs and a settled belief that no meaningful additional savings remained.
“The conventional wisdom was there’s no way to save any additional money in this market. Everything’s been totally optimized,” Dr. Scalise said.
That market ultimately produced a reduction in the overall trend of musculoskeletal spending of more than 20%, reaching the point where costs were declining year over year.
The method starts earlier in the care journey and covers considerably more ground than a surgical episode. HOPCo ingests historical claims data from payers and risk-bearing entities, then analyzes the full cost, utilization and quality profile of musculoskeletal care across an entire member population, a scope it defines using approximately 30,000 ICD-10 codes that touch the musculoskeletal space. That analysis runs on a per-member-per-month basis and spans everything from a primary care visit for low back pain to complex orthopedic trauma at a tertiary facility.
The output is benchmarked against demographically matched comparator populations to determine not just what spending has been, but what it should have been. That gap — calculated in dollars and attributed down to the individual provider and facility — becomes the foundation for a market-specific opportunity map.
“We’ll be able to determine what the cost utilization and quality could have been or arguably should have been in that benchmark data, what that delta is, what that delta is worth in dollars, and who down to the individual provider or facility in that market is largely responsible for helping drive that delta one way or the other,” Dr. Scalise said.
In some markets, that analysis surfaces excessive use of post-acute skilled nursing care. In others, it identifies surgical cases being performed in higher-cost hospital settings when ambulatory surgery centers would be clinically appropriate. The specific opportunities differ by population; the infrastructure to identify and address them does not.
Translating the analysis into results requires physician alignment across the market. HOPCo builds musculoskeletal clinically integrated networks that bring together orthopedic surgeons from competing practices — along with the primary care physicians who manage the upstream volume — around shared clinical standards and evidence-based best practices. When aligned behaviors generate savings, a portion is distributed back to high-performing network participants on an earned quality basis.
“The savings that have been generated are delivered on an earned quality performance basis back to the participating providers in the clinically integrated network,” Dr. Scalise said.
The expansion of that model is now underway. HOPCo launched programs in Indiana, Kentucky, Ohio and Virginia on July 1, with Missouri and Colorado set to follow in early 2027. The new programs collectively cover more than 1 million lives.
To support operations at that scale, the company acquired Caro Health, an AI-driven patient engagement platform, in 2025.
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