Traditional fee-for-service has been predominant despite long-term conversations about value-based care. But the latter model is likely to expand and serve as a more common option alongside fee-for-service, Bryan Lee, MD, said.
Dr. Lee, a spine surgeon with Phoenix-based Barrow Neurological Institute, shared his outlook and the trends that will drive value-based care in spine.
Note: This response was edited for clarity and length.
Question: Where does value-based care stand in spine now? What’s your five-year outlook?
Dr. Bryan Lee: Value-based care has been discussed in spine surgery for more than a decade, but its practical adoption remains uneven. At present, spine care in the United States is still largely delivered within a traditional fee-for-service framework, where surgeons and hospitals are reimbursed based on procedural volume and relative value units. Nevertheless, the pressure to transition toward value-based models continues to grow. Declining physician reimbursement, rising implant and hospital costs, and increasing scrutiny from both public and private payers have created an environment in which the sustainability of purely volume-driven reimbursement is increasingly questioned. As a result, value-based care initiatives — particularly bundled payments and episode-based reimbursement — are beginning to influence the way spine surgeons think about patient selection, perioperative pathways, and cost management.
Currently, the most common manifestation of value-based care in spine surgery is the use of bundled payment models. In these systems, a single predetermined payment covers the entire episode of care, typically including the surgical procedure, hospitalization, implants, professional fees and a defined postoperative period such as 90 days. Programs such as the Medicare Bundled Payments for Care Improvement initiative and similar commercial payer arrangements have served as testing grounds for these models.
The goal is to align incentives among surgeons, hospitals and care teams by encouraging efficiency and minimizing complications or unnecessary post-acute care utilization. For example, a bundled payment for a single-level lumbar fusion might encompass the index hospitalization, surgeon and anesthesia services, implant costs, and any readmissions or complications during the postoperative window. If the total cost of care remains below the bundle price, the hospital and surgeon may share in the savings; if the costs exceed the bundle, they absorb the loss.
Early experience with bundled payments in spine surgery has demonstrated some modest cost reductions, particularly in well-selected patient populations. Much of this improvement has come from enhanced care coordination, shorter hospital stays, and reduced reliance on skilled nursing facilities after surgery. For instance, many institutions have transitioned patients undergoing minimally invasive lumbar decompressions or short-segment fusions toward next-day discharge or even outpatient pathways, reducing facility costs without compromising outcomes. However, these gains are not universal, and spine surgery presents unique challenges compared with other orthopedic procedures such as total hip or knee arthroplasty. Spine pathology is highly heterogeneous, and procedures vary widely in complexity, surgical approach, and patient comorbidity profiles. Consequently, predicting the cost of an episode of spine care is inherently more difficult, and a small number of complications or complex cases can dramatically skew financial outcomes.
From a clinical perspective, value-based care increasingly places emphasis on patient optimization and appropriate surgical indications. Under a traditional fee-for-service model, reimbursement is largely independent of patient risk factors. In contrast, within a bundled payment environment, the financial implications of complications become highly relevant. For example, two patients undergoing a single-level lumbar fusion may carry vastly different risk profiles: a healthy, non-smoking patient with few comorbidities versus a patient with obesity, poorly controlled diabetes, and active tobacco use. Although both procedures may generate similar procedural reimbursement under fee-for-service, the second patient carries a significantly higher likelihood of wound complications, readmission, or delayed recovery, all of which increase the cost of the episode. As a result, value-based models inevitably place greater emphasis on risk stratification, preoperative optimization, and careful patient selection.
Complications represent the greatest financial risk within bundled payment systems. In many routine lumbar fusion cases, the margin between the bundled payment and the total cost of care may be relatively small. While an uncomplicated surgical episode may generate modest savings, a single adverse event such as postoperative infection, hardware failure requiring revision, or prolonged hospitalization, can multiply the cost of care several-fold and eliminate any financial margin. This dynamic reinforces the importance of surgical technique, perioperative protocols, and standardized care pathways designed to minimize complications and variability.
Financially, it is also important to recognize that surgeons directly control only a portion of the cost structure associated with spine surgery. The majority of episode expenses arise from hospital resources, operating room utilization, implants, and postoperative care. Implant costs alone can represent one of the largest controllable variables. In many lumbar fusion procedures, pedicle screw systems, cages, and biologic materials may account for a substantial proportion of total surgical cost. Hospitals and surgical teams that develop standardized implant selection strategies or negotiate more favorable vendor pricing can significantly improve the financial viability of bundled care models without compromising clinical outcomes. In addition, improvements in operating room efficiency, length of stay reduction, and early mobilization protocols further contribute to cost containment.
Ambulatory surgery centers are also playing an increasingly important role in the evolution of value-based spine care. Advances in minimally invasive techniques, anesthesia protocols, and perioperative care have made it possible to safely perform many spine procedures in outpatient settings. Decompressions, cervical disc arthroplasties, and select anterior cervical fusions are now frequently performed in ambulatory environments, where facility costs are substantially lower than in traditional inpatient hospitals. From a value-based perspective, these settings offer a natural alignment between clinical efficiency and cost containment, and their role in spine surgery is expected to expand significantly.
Looking ahead over the next five years, value-based care in spine surgery will likely continue to expand, though it is unlikely to completely replace fee-for-service reimbursement. Policymakers and payers are expected to introduce additional specialty-focused alternative payment models, particularly targeting common and predictable conditions such as degenerative lumbar stenosis, cervical radiculopathy, or low back pain requiring decompression or short-segment fusion. Bundled payments will likely become more common for well-defined procedures with relatively predictable outcomes, including lumbar decompressions, one- or two-level anterior cervical discectomy and fusion procedures, and limited lumbar fusion surgeries.
At the same time, complex spine procedures will likely remain outside strict bundled frameworks or will require highly sophisticated risk-adjusted payment models. Deformity correction, revision surgery, tumor resection, and trauma cases involve significant variability in operative time, resource utilization, and complication risk. Applying rigid bundled payments to these procedures without adequate risk adjustment could inadvertently discourage surgeons from treating the most complex patients. Therefore, future value-based models will likely incorporate more advanced predictive analytics and risk-stratification tools to account for patient complexity and procedural variability.
Another important trend over the next five years will be the growing role of data analytics and outcome measurement. Health systems are increasingly investing in registries, predictive algorithms, and real-time cost tracking to better understand the drivers of value in spine care. These tools will allow surgeons and administrators to identify patterns of complications, optimize care pathways, and more accurately predict which patients are likely to become high-cost outliers. In turn, this information can be used to refine surgical indications, improve patient counseling, and design reimbursement models that more fairly reflect the complexity of spine surgery.
Ultimately, the future of value-based care in spine surgery will depend on achieving a balance between cost containment and maintaining access to high-quality surgical care. Spine surgeons will play a central role in shaping this transition. By emphasizing appropriate indications, patient optimization, minimally invasive techniques, and efficient perioperative care pathways, surgeons can help demonstrate that high-quality spine surgery can also be delivered in a cost-effective manner. While the transition to value-based care is unlikely to be abrupt, the direction is clear: over the next several years, spine surgery will increasingly be evaluated not only by procedural success but also by the overall value delivered to patients and the healthcare system.
