Spine surgery in a value-based world: Dr. Jed Vanichkachorn on spine bundled payments


Spine surgeons are beginning to see a real shift from fee-for-service to value-based care as insurance companies pass risk onto providers. The payers push integrated care models and population health initiatives for the future.

"We are seeing more push-back from insurance companies for traditional fee for service reimbursement," says Jed Vanichkachorn, MD, of Tuckahoe Orthopaedics in Richmond, Va. "With health care reform hitting their margins and profitability, insurers are encouraging providers to integrate more and move away from the fee-for-service model. We are used to being reimbursed for the number of CPT codes billed, but now there is a movement to integrate with hospital systems and deliver value-based care."


Spine surgeons are working with hospitals to develop spine centers of excellence and preparing to accept bundled payments. Many hospitals have worked on bundles for hip and knee replacement and are now targeting spine as the next successful bundle.


"Nobody really knows exactly what you'll have to produce for value-based care," says Dr. Vanichkachorn. "Value is defined as the outcomes divided by your costs. We have to be more sensitive to costs for the various implants and biologics we use in the spine. Right now, there is currently significant variability of utilization and this increases costs. The other side is that we have to start collecting data to show improved outcomes for our patients even with lower costs."


Dr. Vanichkachorn's group is collecting outcomes data to prepare for the future. "It used to be that only the big spine centers collected data, but slowly we're being told that if you don't have outcomes, you won't gain approval," he says. "Urgent care and primary care physicians are coming to us to make sure we have outcomes data before referring their patients because they want to make sure they're sending patients to the best people with a value based mind set."


There is also movement toward outpatient spinal surgery. This includes laminectomies, discectomies, one-level disc replacements and fusions. "Our goal is to get 40 percent of our procedures to an outpatient facility over the next few years," says Dr. Vanichkachorn. "When healthcare reform came in, a lot of providers were hoping it wouldn't work well and they wouldn't have to change. But now it's the law of the land and we have to realize that value-based care is the future."


Dr. Vanichkachorn realized if his practice didn't develop bundled payments with hospitals or specialty conveners, they'd be left out of the coverage networks in the future. The hospital in his community began hiring primary care physicians and put them in the Medicare shared savings program. The physicians still refer to several spine surgeons within their network, but seek out specialty providers that can save money for their referrals.


"As surgeons and patients take on more risk — patients are paying more out-of-pocket and surgeons are paid based on quality data — both sides are paying more attention to outcomes and cost," says Dr. Vanichkachorn. "You have to show value with your data, not just clinical effectiveness, to survive down the road."


This was partially driven by the sustainable growth rate repeal as well.


"The SGR repeal was great for orthopedic surgeons, but we also saw that by 2019, alternative payment models will gain significant reimbursement bonuses and exemptions from reporting requirements," he says. "If you try to do pure fee-for-service, you might not survive."


Dr. Vanichkachorn’s group picked lumbar and cervical fusions as their initial episodes for bundled care. Surgeons control several aspects of care for these procedures, including:


• Cost of implants and material
• Time spent in the operating room
• Time spent under anesthesia
• Length of stay at the hospital
• Recovery time and resources


New less invasive procedures may reduce blood transfusions, complications and infection risk. Surgeons and their teams can also cut excess waste in their processes to save time and money in the future.


"Minimally invasive procedures and motion preservation procedures will be more important with the new paradigm in healthcare," says Dr. Vanichkachorn. "Disc arthroplasty is finally gaining traction and more insurance companies are approving it. It's equivalent to cervical fusion, but lasts longer with less adjacent level disease; they could prevent surgeries down the road."


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