Fifteen years ago, Alex Vaccaro, MD, PhD, president of Philadelphia-based Rothman Orthopaedics, first thought value-based care might finally bring reason to healthcare spending.
By moving appropriate orthopedic cases from large hospitals to ambulatory centers, he and his colleagues saved millions of dollars while keeping patients safe.
“We started to move expensive care out of quaternary and tertiary hospitals to lower-cost centers that could handle the pathology,” Dr. Vaccaro told Becker’s. “We saved a tremendous amount of money, and the insurance companies were on board. Then Medicare made it a race to the bottom — they just paid you less and less until there was nowhere else to go.”
He called today’s version of value-based care a distortion of the original idea — too often used to describe simply doing less, not delivering care more efficiently.
Now, Dr. Vaccaro sees AI as the best path to restoring that balance.
“70% of my costs are labor,” he said. “We used to have people touching the same patient file nine times. Now AI adjudicates it automatically, resends it if it’s denied and we save tremendously on labor.”
Those savings, he said, can be redirected toward education and equity.
“We can now focus on getting our message out, educating patients,” Dr. Vaccaro said. “We can focus on things that are important, like equity in care and health equity. We work in communities where people struggle with the social determinants of health, and AI helps us redirect resources toward that.”
As a spine surgeon, he’s also using AI in the operating room — not to replace judgment, but to sharpen it.
“It helps with deformity measurements, surgical planning and patient education,” he said. “I can tailor a plan for a 50-year-old woman with osteoporosis or a 55-year-old man with scoliosis.
He believes AI has already changed his practice more than any hardware or biologic innovation in decades.
“AI has definitely decreased my cost of running a business exponentially — not by 5%, but exponentially,” Dr. Vaccaro said. “If you look at every other area — pharmaceuticals, biologics, implants — innovation there costs millions and millions of dollars.”
Still, he warns that innovation alone won’t solve problems of access.
“Every year, Congress decreases Medicare pay while the population over 65 keeps growing,” he said. “If you keep cutting reimbursement, access becomes impossible. Obamacare gave everyone insurance, but not everyone got access.”
For Dr. Vaccaro, true progress will come from a combination of efficiency, advocacy and political will.
“We need legislation that keeps reimbursement consistent with inflation,” he said. “Then it’s up to physicians to run a competitive business and decrease costs.”
