Value-based Healthcare: Early Wins and Smooth Transitions to Value-based Delivery

Although most stakeholders agree that focusing on value is one of the keys to an effective and sustainable healthcare system [11], a large contingent of healthcare providers, including orthopaedic surgeons, are concerned that implementing value-based healthcare strategies within their health system or practice may have unintended consequences. Why? Some orthopaedic surgeons have concerns about adverse patient selection when implementing value-based healthcare (sometimes termed “lemon-dropping” and “cherry-picking”), or the potential impact to their own compensation. While these concerns have been countered [2, 5], other underdiscussed factors that may make some orthopaedic surgeons hesitant include the potential for long transition timelines, challenging negotiations with payers, and disruptions to their practice. But transitioning to value-based healthcare should not feel like an overwhelming endeavor with prohibitively long or disruptive timelines. Instead, our view is that the transition should be seen as a gradual, iterative process that offers both short-term wins and long-term benefits.

Certainly, a perception exists among healthcare providers that transitioning to value-based delivery models is a daunting task. This is understandable considering how opaque the actual specifics of the transition can seem. For example, one key misconception is that the first step in transitioning to value-based healthcare is renegotiating provider reimbursement contracts with payers to risk-based alternative payment models (APMs) [10] like the Bundled Payment for Care Improvement and the Comprehensive Care for Joint Replacement. These programs are payment approaches that incentivize efficient, coordinated care delivery that reduces the episode cost of care while maintaining or improving health outcomes. Although many orthopaedic surgeons may think APMs are the first step they should take when pursuing value-based healthcare, it is our opinion that they should often be the last step when making the transition toward value.

While APMs are important, too often in orthopaedics value-based healthcare is seen as virtually synonymous with APMs. However, a more accurate definition would be that value-based healthcare is any rethinking of healthcare delivery to maximize patient outcomes per healthcare dollar spent—including shared decision-making, patient-reported outcome (PRO) measurement, and team-based multidisciplinary care, in addition to value-based APMs.

Together, shared decision-making, PRO measurement, and multidisciplinary team-based care can be termed a “value-based healthcare practice redesign,” which encompasses the initial steps that orthopaedic practices can begin with during their transition from traditional care toward value-based care.

By reframing transitioning to value-based healthcare as a process that begins with gradual changes to an orthopaedic practice—rather than with suddenly adopting new APMs—orthopaedic surgeons can envision a more orderly and step-wise transition. And while the redesign requires modest upfront investments, it can be undertaken incrementally and can produce early benefits for orthopaedic patients and the practices that care for them.

For instance, shared decision-making in orthopaedic surgery can be undertaken with the use of decision aids, which a surgeon can adopt with little disruption to the practice or substantial investment [9]. Patients with musculoskeletal injuries who experience shared decision-making report greater satisfaction and functional improvement following treatment [11].

In a similar manner, orthopaedic practices can incorporate standardized PRO measurement and analysis into their care pathways to better understand the outcomes of their interventions from the patient’s perspective. Discussing PROs with patients can lead to increased patient satisfaction with their surgeon [1]. Similar to decision aids, PRO measurement tools are also available at low cost, and using them does not meaningfully increase visit time [3]. To integrate PROs into their practices, orthopaedic surgeons can utilize existing functions available in most electronic medical records (EMRs) to automatically send PRO surveys to patients before office visits. A surgeon can then look up the patients’ PROs in the EMR before meeting them and discuss their physical and mental health in a more patient-centered and efficient manner. This entire process requires minimal investment and less than a minute of active work per patient for orthopaedic surgeons, and results in meaningfully greater patient satisfaction with their encounter [1]. In this way, standardized PRO measurement and discussion also represents a preliminary form of value-based healthcare.

The next step in value-based healthcare practice redesign is to incorporate team-based multidisciplinary care. Unlike shared decision-making and PRO measurement, reorganizing delivery pathways can be a more substantial undertaking and investment. For example, one form of multidisciplinary care is an integrated practice unit (IPU), which is an interprofessional multidisciplinary team committed to the whole-patient concept of management of musculoskeletal illness under a value-based healthcare framework using both surgical and nonsurgical treatments [7]. Providers use IPUs to treat patients over the entire care cycle until a patient is transitioned back to the primary care environment [7].

A typical IPU for hip and knee osteoarthritis care includes orthopaedic surgeons, as well as specialty-trained orthopaedic physician assistants and nurse practitioners (together termed “advanced practice providers”), physical therapists, chiropractors, social workers, mental health professionals, and dieticians working cohesively in the same facility and agreeing on treatment plans as a team for each patient. For many orthopaedic practices, pursuing an IPU model for healthcare delivery would require substantial staff reorganizing and even hiring of additional personnel. However, IPUs should be seen as the gold standard of multidisciplinary team-based care that orthopaedic practices can transition toward gradually. Orthopaedic practices can begin with more modest multidisciplinary team-based approaches, including closer partnerships with physical therapists, daily interprofessional meetings to discuss cases, virtual connections to nonorthopaedic clinicians, and empowering experienced advanced practice providers to manage entire visits for more routine nonoperative patients.

Although some orthopaedic surgeons may be concerned about the financial feasibility of IPUs, two key factors make IPUs not only financially viable but also potentially cost-saving and profitable for orthopaedic practices after the initial investment. The first key factor is empowering nonphysician providers to take on greater clinical responsibility. When nonphysician expertise is utilized appropriately—based on evidence-based treatment protocols—nonphysician-led delivery models have shown clinical outcomes similar to physician-led models [6, 8]. Nonphysician-led models also achieve greater patient and provider satisfaction, greater orthopaedic surgeon availability for more complex patients, and lower costs [6]. The second key factor that makes IPUs financially feasible is the focus on preoperative risk factor modification and postoperative recovery optimization through partnerships with allied health professionals. For instance, patients within our IPU have access to virtual or in-house dieticians for weight loss, social workers for addressing psychosocial risk factors including anxiety and depression, and physical therapists for rehabilitation services. Having these services integrated within a single practice has enabled us to achieve high rates of improved functional outcomes and lower episode-of-care costs with both operative and nonoperative treatment modalities. Over time, orthopaedic practices consistently measuring and demonstrating improved value with IPUs will be best positioned to contract with employers and payers for quality designation programs and thereby increase their market share.

Value-based practice redesign can be accomplished with limited disruption to clinical workflow. Importantly, the benefits of taking these incremental steps can be substantial in terms of improved patient outcomes, patient and employee satisfaction, and workforce retention, all before APMs even are introduced.

After incorporating shared decision-making, PROs, and multidisciplinary teams into an orthopaedic practice, the final step is to transition to APMs. Although this step in pursuing value-based healthcare can be the most challenging, orthopaedic practices may be surprised with how lucrative and nondisruptive APMs can be for their practice.

One factor that can make the transition to value-based payment models easier is that many current APMs are based on a fee-for-service architecture and can be more readily adopted by orthopaedic practices that are newer to value-based healthcare [4]. Indeed, the Healthcare Payment Learning & Action Network (HCP-LAN) [4] defines four broad categories of payment (Table 1).

Table 1.

Provider payment types (adapted from the HCP-LAN) and the proportion of US healthcare dollars spent in each category in 2020 [4]

Category	Definition	Example	Percentage of US healthcare dollars spent in this category in 2020
Category 1	Fee-for-service models with no link to quality or value	Physician professional fees	39%
Category 2	Fee-for-service linked to quality and value	Pay-for-performance (MIPS) and infrastructure improvement payments	20%
Category 3	APMs built on a fee-for-service architecture that hold providers financially accountable for performance	Shared savings (MSSP ACOs) Episode-based payments for procedures (BPCI) Comprehensive Primary Care Plus (CPC+) track 1	34%
Category 4	APMs using population-based payment, with safeguards against limiting necessary care	Global capitated budgets Comprehensive Primary Care Plus (CPC+) track 2 Prospective bundled payments for chronic conditions	7%

MIPS = Merit-based Incentive Payment System; MSSP ACOs = Medicare Shared Savings Program Accountable Care Organization; BPCI = Bundled Payments for Care Improvement; CPC+ = Comprehensive Primary Care Plus.

One misunderstanding we often encounter: When moving toward payment models tied to value, it is necessary to jump immediately from Category 1 to Category 4 payments, while skipping Categories 2 and 3. In contrast, orthopaedic practices can utilize payments in multiple categories at the same time and gradually embrace more payment models from Category 2, then 3, then 4. At each stage, a practice can select the specific payment model that best fits its needs and has the benefits that the group is most interested in while also being mindful of any potential drawbacks that could negatively impact the practice.

By moving gradually, category by category, the transition toward value-based healthcare APMs from a conventional fee-for-service payment model is not an all-or-nothing switch. Instead, it can be thought of as a process that orthopaedic practices undertake at their own pace—in the same way value-based healthcare practice redesign can be undertaken. At each step along the way in the transition to value-based payment models, orthopaedic practices can pause, assess their experience, and then move forward by selecting higher category models that most align with their priorities and current capabilities.