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Value-based Health Care: Positioning Spine Surgery Centers for Success

Key findings

  • As the U.S. health care system transitions away from fee-for-service, surgeons can help their health care organizations succeed by applying internal pressure for implementation and improvement of the six core concepts of value-based health care
  • Geographic expansion of centers of excellence means it will be optimal for health care organizations to have both a "hub" and "spokes"
  • Organizations need to prepare for integrated practice units where multidisciplinary teams hyperspecialize in a certain level of complexity, a certain anatomic region or certain procedures
  • The U.S. government's bundled payment system for spine surgery currently disincentivizes complex care and needs revision
  • New methods of measuring outcomes and costs and innovative information technology will give health care organizations a competitive advantage

Given its cost, spine surgery is under heavy scrutiny as the U.S. transitions from fee-for-service to value-based health care (VBHC). Surgeons can help their organizations succeed by applying internal pressure for the implementation of the six core concepts of VBHC. According to the AMA, the six core concepts of VBHC are: a clear, shared vision with the patient at the center; leadership and professionalism of health care workers; a robust IT infrastructure; broad access to care; and payment models that reward quality improvement over volume.

In The Spine JournalAditya V. Karhade, MD, MBA, Orthopaedic Surgery resident, Christopher Bono, MD, orthopaedic spine surgeon, executive vice chair of the Department of Orthopaedic Surgery and associate program director of the Harvard Combined Orthopaedic Residency, Joseph H. Schwab, MD, MS, chief of the Orthopaedic Spine Center at Massachusetts General Hospital, and colleagues review recent progress in each of the areas as they relate to spine care and suggest how surgeons can prepare for the years ahead.

Expand COEs Across Geography

Elective spine surgery is becoming divided into complex care delivered at flagship centers of excellence (COEs, the central hubs of large health care enterprises), and lower-complexity care delivered at tertiary COEs (local branches of these organizations).

Meanwhile, third-party administrators are working with large employers to direct employees requiring surgical care to preselected COEs. A prominent example is Walmart, which in 2019 mandated that its 1.1 million employees undergo spine surgery at predetermined COEs in order to be fully covered by insurance.

A study conducted for Walmart from 2015–2018 showed the company spent $2,400 more per spine surgery case at a COE. However, even after paying for airfare/transportation and lodging, it reaped significant cost savings. Overall, patients who had surgery at a COE had a shorter length of stay, were less likely to need skilled nursing, had lower readmission rates and returned to work sooner than those whose procedure was performed at a local center.

To flourish in the COE model, health care systems will need both a "hub" for offering specialized operative care and a network of "spoke" facilities specializing in postoperative and nonoperative care.

Organize Care into Integrated Practice Units

Integrated practice units (IPUs) include clinicians from all specialties required to provide the full cycle of care to patients with a specific condition. In spine surgery, IPUs currently specialize by:

  • Anatomic region—For example, a cervical spine surgery IPU may include spine surgeons who perform only procedures for cervical degenerative diseases, complemented by physical therapists, pain management specialists, neurologists and psychiatrists hyperspecialized in cervical spine care
  • Complexity—Already, groups of spine surgeons often focus either on common high-throughput procedures performed in community settings or more complex procedures performed in academic medical centers

Similar specializations are likely to occur for adult spinal deformity, orthopedic oncology, orthopedic trauma and revision orthopedic surgery.

Deliver Specialized Care

As the discussion of COEs and IPUs suggests, specialization in care delivery is bound to intensify. Already there is a burgeoning of outpatient surgery centers, and at the other end of the spectrum, the surgical capacity of flagship COEs will increase.

In geographic areas that have multiple flagship COEs, the centers will compete for the most complex cases. COEs that cannot maintain surgical volume may be forced to abandon elective spine surgery.

Move to Bundled Payments

The Centers for Medicare & Medicaid Services has a program called Bundled Payment for Care Improvements that includes spine surgery in five diagnosis-related groups (DRGs): back and neck except for spinal fusion, cervical spinal fusion, combined anterior-posterior spinal fusion, complex noncervical spinal fusion and noncervical spinal fusion.

Unfortunately, these DRGs are not adjusted for variations between indications (e.g., trauma vs. elective interventions), operative factors (e.g., approach and extent of fusion) or patient comorbidity burden. This disincentivizes the care of complex conditions.

The development and targeting of bundled payments will heavily influence the nature of COEs. Public and private payors must not create systems that cause patients with the greatest needs to be screened out.

Measure Outcomes and Costs

One trend of note is a standardized measurement of costs through time-driven activity-based costing (TDABC), explained in Healthcare Financial Management. For example, a TDABC analysis in Clinical Spine Surgery determined the minimum acceptable reimbursement for one- or two-level anterior cervical discectomy and fusion.

Spine centers that lead the way in applying TDABC can expect a significant advantage in negotiating reimbursement, expanding geographic coverage and executing capital projects such as new ambulatory surgery centers.

Using IT to Improve Measurement and Outcomes

Aspects of spine care that are ripe for improved information technology include clinical documentation, computer-aided diagnosis, prognosis and patient-generated outcomes measurement.

Two examples of IT developments are a deep neural network that improves emergency physicians' ability to detect fractures in wrist radiographs, described in PNAS, and an automated algorithm, reported in Annals of Surgery, that predicts the risk of major postoperative complications. Organizations that adopt such innovations are likely to achieve substantial outcomes improvement.

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