Clinical Orthopaedics and Related Research ®

A Publication of The Association of Bone and Joint Surgeons ®

Symposium: ABJS Carl T. Brighton Workshop on Health Policy Issues in Orthopaedic Surgery 19 articles


Physician Collective Bargaining

Anthony Hunter Schiff JD, MPH Current antitrust enforcement policy unduly restricts physician collaboration, especially among small physician practices. Among other matters, current enforcement policy has hindered the ability of physicians to implement efficient healthcare delivery innovations, such as the acquisition and implementation of health information technology (HIT). Furthermore, the Federal Trade Commission and Department of Justice have unevenly enforced the antitrust laws, thereby fostering an increasingly severe imbalance in the healthcare market in which dominant health insurers enjoy the benefit of largely unfettered consolidation at the cost of both consumers and providers. This article traces the history of antitrust enforcement in healthcare, describe the current marketplace, and suggest the problems that must be addressed to restore balance to the healthcare market and help to ensure an innovative and efficient healthcare system capable of meeting the demands of the 21st century. Specifically, the writer explains how innovative physician collaborations have been improperly stifled by the policies of the federal antitrust enforcement agencies, and recommend that these policies be relaxed to permit physicians more latitude to bargain collectively with health insurers in conjunction with procompetitive clinical integration efforts. The article also explains how the unbridled consolidation of the health insurance industry has resulted in higher premiums to consumers and lower compensation to physicians, and recommends that further consolidation be prohibited. Finally, the writer discusses how health insurers with market power are improperly undermining the physician-patient relationship, and recommend federal antitrust enforcement agencies take appropriate steps to protect patients and their physicians from this anticompetitive conduct. The article also suggests such steps will require changes in three areas: (1) health insurers must be prohibited from engaging in anticompetitive activity; (2) the continuing improper consolidation of the health insurance industry must be curtailed; and (3) the physician community must be permitted to undertake the collaborative activity necessary for the establishment of a transparent, coordinated, and efficient delivery system.

Quality Measurement in Orthopaedics: The Purchasers’ View

David Lansky PhD, Arnold Milstein MD, MPH While all of medicine is under pressure to increase transparency and accountability, joint replacement subspecialists will face special scrutiny. Disclosures of questionable consulting fees, a demographic shift to younger patients, and uncertainty about the marginal benefits of product innovation in a time of great cost pressure invite a serious and progressive response from the profession. Current efforts to standardize measures by the National Quality Forum and PQRI will not address the concerns of purchasers, payors, or policy makers. Instead, they will ask the profession to document its commitment to appropriateness, stewardship of resources, coordination of care, and patient-centeredness. One mechanism for addressing these expectations is voluntary development of a uniform national registry for joint replacements that includes capture of preoperative appropriateness indicators, device monitoring information, revision rates, and structured postoperative patient followup. A national registry should support performance feedback and quality improvement activity, but it must also be designed to satisfy payor, purchaser, policymaker, and patient needs for information. Professional societies in orthopaedics should lead a collaborative process to develop metrics, infrastructure, and reporting formats that support continuous improvement and public accountability.

Aligning Physician and Hospital Incentives: The Approach at Hospital for Special Surgery

Anil S. Ranawat MD, Jonathan H. Koenig BA, Adrian J. Thomas MD, Catherine D. Krna MBA, Louis A. Shapiro FACHE Healthcare administrators and physicians alike are navigating an increasingly complex and highly regulated healthcare environment. Unlike in the past, institutions now require strong collaboration among physician and administrative leaders. As providers and managers are trained and work differently, new methods are needed to provide the infrastructure and resources necessary to create, nurture, and sustain alignment between them. We describe four initiatives by administrators and physicians at Hospital for Special Surgery to work together in mutually beneficial relationships that help us achieve the highest level of patient care, satisfaction and safety. These initiatives include improving management efficiency through an orthopaedic service line structure, helping individual physicians grow their practices through the demand-office-operating room initiative of the Physicians Service Department, controlling costs through the supply effectiveness policy, and promoting teamwork in innovation through the technology transfer program.

Aligning Incentives in Orthopaedics: Opportunities and Challenges—the Case Medical Center Experience

Randall E. Marcus MD, Thomas F. Zenty MPA, MHSA, Harlin G. Adelman Esq. For 30 years, the orthopaedic faculty at Case Western Reserve University worked as an independent private corporation within University Hospitals Case Medical Center (Hospital). However, by 2002, it became progressively obvious to our orthopaedic practice that we needed to modify our business model to better manage the healthcare regulatory changes and decreased reimbursement if we were to continue to attract and retain the best and brightest orthopaedic surgeons to our practice. In 2002, our surgeons created a new entity wholly owned by the parent corporation at the Hospital. As part of this transaction, the parties negotiated a balanced employment model designed to fully integrate the orthopaedic surgeons into the integrated delivery system that included the Hospital. This new faculty practice plan adopted a RVU-based compensation model for the physicians, with components that created incentives both for clinical practice and for academic and administrative service contributions. Over the past 5 years, aligning incentives with the Hospital has substantially increased the clinical productivity of the surgeons and has also benefited the Hospital and our patients. Furthermore, aligned incentives between surgeons and hospitals could be of substantial financial benefit to both, as Medicare moves forward with its bundled project initiative.

Prometheus Payment Model: Application to Hip and Knee Replacement Surgery

Amita Rastogi MD, MHA, Beth A. Mohr MS, Jeffery O. Williams BS, Mah-Jabeen Soobader MPH, PhD, Francois Brantes MS, MBA The Prometheus Payment Model offers a potential solution to the failings of the current fee-for-service system and various forms of capitation. At the core of the Prometheus model are evidence-informed case rates (ECRs), which include a bundle of typical services that are informed by evidence and/or expert opinion as well as empirical data analysis, payment based on the severity of patients, and allowances for potentially avoidable complications (PACs) and other provider-specific variations in payer costs. We outline the methods and findings of the hip and knee arthroplasty ECRs with an emphasis on PACs. Of the 2076 commercially insured patients undergoing hip arthroplasty in our study, PAC costs totaled $7.8 million (14% of total costs; n = 699 index PAC stays). Similarly, PAC costs were $12.7 million (14% of total costs; n = 897 index PAC stays) for 3403 patients undergoing knee arthroplasty. By holding the providers clinically and financially responsible for PACs, and by segmenting and quantifying the type of PACs generated during and after the procedure, the Prometheus model creates an opportunity for providers to focus on the reduction of PACs, including readmissions, making the data actionable and turn the waste related to PAC costs into potential savings.

Economic Incentives to Promote Innovation in Healthcare Delivery

Harold S. Luft PhD Economics influences how medical care is delivered, organized, and progresses. Fee-for-service payment encourages delivery of services. Fee-for-individual-service, however, offers no incentives for clinicians to efficiently organize the care their patients need. Global capitation provides such incentives; it works well in highly integrated practices but not for independent practitioners. The failures of utilization management in the 1990s demonstrated the need for a third alternative to better align incentives, such as bundling payment for an episode of care. Building on Medicare’s approach to hospital payment, one can define expanded diagnosis-related groups that include all hospital, physician, and other costs during the stay and appropriate preadmission and postdischarge periods. Physicians and hospitals voluntarily forming a new entity (a care delivery team) would receive such bundled payments along with complete flexibility in allocating the funds. Modifications to gainsharing and antikickback rules, as well as reforms to malpractice liability laws, will facilitate the functioning of the care delivery teams. The implicit financial incentives encourage efficient care for the patient; the episode focus will facilitate measuring patient outcomes. Payment can be based on the resources used by those care delivery teams achieving superior outcomes, thereby fostering innovation improving outcomes and reducing waste.

Executive Summary: Aligning Stakeholder Incentives in Orthopaedics

Natalia A. Wilson MD, MPH, Anil Ranawat MD, Ryan Nunley MD, Kevin J. Bozic MD, MBA

Executive Summary: Value-based Purchasing and Technology Assessment in Orthopaedics

Anil S. Ranawat MD, Ryan Nunley MD, Kevin Bozic MD As US healthcare expenditures continue to rise, reform has shifted from spending controls to value-based purchasing. This paradigm shift is a drastic change on how health care is delivered and reimbursed. For the shift to work, policymakers and physicians must restructure the present system by using initiatives such as process reengineering, insurance and payment reforms, physician reeducation, data and quality measurements, and technology assessments. Value, as defined in economic terms, will be a critical concept in modern healthcare reform. We summarize the conclusions of this ABJS Carl T. Brighton Workshop on healthcare reform.

What Rate of Utilization is Appropriate in Musculoskeletal Care?

Jon D. Lurie MD, MS, John Erik Bell MD, Jim Weinstein DO, MS Musculoskeletal procedures often show wide variation in rates across geographic areas, which begs the question, “Which rate is right?” Clearly, there is no simple answer to this question. We summarize a conceptual framework for thinking about how to approach this question for different types of interventions. One guiding principle is the “right rate” is usually the one that results from the choices of a fully informed and empowered patient population. For truly effective care without substantial tradeoffs, the right rate may approach 100%. The rate of operative treatment of hip fracture, for example, approaches the underlying incidence of disease; however, the rate of some forms of effective care, like osteoporosis evaluation and treatment after a fragility fracture, is often quite low and undoubtedly reflects underuse. The recommended approach to underuse is to improve the reliability and accountability of the delivery system. Many other musculoskeletal interventions fall into the category of “preference-sensitive care.” These interventions involve important tradeoffs between risks and benefits. Variations in these procedure rates may represent insufficient focus on patient values and preferences, relying instead on the enthusiasm of the physician for treatment alternatives. The recommended approach in this setting is the use of decision aids and other approaches to informed choice.,[object Object]

The Impact of Disruptive Innovations in Orthopaedics

Erik Hansen MD, Kevin J. Bozic MD, MBA The US healthcare system is currently facing daunting demographic and economic challenges. Because musculoskeletal disorders and disease represent a substantial and growing portion of this healthcare burden, novel approaches will be needed to continue to provide high-quality, affordable, and accessible orthopaedic care to our population. The concept of “disruptive innovations,” which has been studied and popularized by Harvard Business School Professor Clayton Christensen, may offer a potential framework for developing strategies to improve quality and control costs associated with musculoskeletal care. The introduction of mobile fluoroscopic imaging systems, the development of the Surgical Implant Generation Network intramedullary nail for treatment of long bone fractures in the developing world, the expanding role and contributions of physician assistants and nurse practitioners to the orthopaedic team, and the rise of ambulatory surgery centers are all examples of disruptive innovations in the field of orthopaedics. Although numerous cultural and regulatory barriers have limited the widespread adoption of these “disruptive innovations,” we believe they represent an opportunity for clinicians to regain leadership in health care while at the same time improving quality and access to care for patients with musculoskeletal disease.

Role of Technology Assessment in Orthopaedics

Charles Turkelson PhD, Joshua J. Jacobs MD A technology assessment is a literature-based research project that seeks to determine whether a medical device, drug, procedure, or biologic is effective or to summarize literature on a given technology. A well-conducted assessment is a form of secondary research that employs the same steps used in primary research studies (ie, well-designed clinical trials). The primary difference is that in technology assessment the investigator does not collect the raw data. Rather, (s)he must use data collected by someone else. Nevertheless, a well-designed assessment, like a well-designed study, employs the scientific method, which is a method designed to combat bias. When there is little available information, such as with new technologies, unbiased examinations can typically show that enthusiasm for that technology is not backed by much data. When there is more information, assessments can not only determine whether a technology is effective, but also how effective it is. Technology assessments can provide busy orthopaedic surgeons (who do not have the time to keep up with and critically evaluate current literature) with succinct information that enables them to rapidly determine what is and what is not known about any given medical technology.

The Impact of Physician-owned Specialty Orthopaedic Hospitals on Surgical Volume and Case Complexity in Competing Hospitals

Xin Lu MS, Tyson P. Hagen MD, Mary S. Vaughan-Sarrazin PhD, Peter Cram MD, MBA Published studies of physician-owned specialty hospitals have typically examined the impact of these hospitals on disparities, quality, and utilization at a national level. Our objective was to examine the impact of newly opened physician-owned specialty orthopaedic hospitals on individual competing general hospitals. We used Medicare Part A administrative data to identify all physician-owned specialty orthopaedic hospitals performing total hip arthroplasty (THA) and total knee arthroplasty (TKA) between 1991 and 2005. We identified newly opened specialty hospitals in three representative markets (Durham, NC, Kansas City, and Oklahoma City) and assessed their impact on surgical volume and patient case complexity for the five competing general hospitals located closest to each specialty hospital. The average general hospital maintained THA and TKA volume following the opening of the specialty hospitals. The average general hospital also did not experience an increase in patient case complexity. Thus, based on these three markets, we found no clear evidence that entry of physician-owned specialty orthopaedic hospitals resulted in declines in THA or TKA volume or increases in patient case complexity for the average competing general hospital.

Healthcare Quality Measurement in Orthopaedic Surgery: Current State of the Art

Andrew Auerbach MD, MPH Improving quality of care in arthroplasty is of increasing importance to payors, hospitals, surgeons, and patients. Efforts to compel improvement have traditionally focused measurement and reporting of data describing structural factors, care processes (or ‘quality measures’), and clinical outcomes. Reporting structural measures (eg, surgical case volume) has been used with varying degrees of success. Care process measures, exemplified by initiatives such as the Surgical Care Improvement Project measures, are chosen based on the strength of randomized trial evidence linking the process to improved outcomes. However, evidence linking improved performance on Surgical Care Improvement Project measures with improved outcomes is limited. Outcome measures in surgery are of increasing importance as an approach to compel care improvement with prominent examples represented by the National Surgical Quality Improvement Project. Although outcomes-focused approaches are often costly, when linked to active benchmarking and collaborative activities, they may improve care broadly. Moreover, implementation of computerized data systems collecting information formerly collected on paper only will facilitate benchmarking. In the end, care will only be improved if these data are used to define methods for innovating care systems that deliver better outcomes at lower or equivalent costs.

Professionalism in 21st Century Professional Practice: Autonomy and Accountability in Orthopaedic Surgery

Eugene S. Schneller PhD, Natalia A. Wilson MD, MPH Orthopaedic surgical practice is becoming increasingly complex. The rapid change in pace associated with new information and technologies, the physician-supplier relationship, the growing costs and growing gap between costs and reimbursements for orthopaedic surgical procedures, and the influences of advertising on the patient, challenge all involved in the delivery of orthopaedic care. This paper assesses the concepts of professionalism, autonomy, and accountability in the 21st century practice of orthopaedic surgery. These concepts are considered within the context of the complex value chain surrounding orthopaedic surgery and the changing forces influencing clinical decision making by the surgeon. A leading impetus for challenge to the autonomy of the orthopaedic surgeon has been cost. Mistrust and lack of understanding have characterized the physician-hospital relationship. Resource dependency has characterized the physician-supplier relationship. Accountability for the surgeon has increased. We suggest implant surgery involves shared decision making and “coproduction” between the orthopaedic surgeon and other stakeholders. The challenge for the profession is to redefine professionalism, accountability, and autonomy in the face of these changes and challenges.

Future Young Patient Demand for Primary and Revision Joint Replacement: National Projections from 2010 to 2030

Steven M. Kurtz PhD, Edmund Lau MS, Kevin Ong PhD, Ke Zhao MA, MS, Michael Kelly MD, Kevin J. Bozic MD, MBA Previous projections of total joint replacement (TJR) volume have not quantified demand for TJR surgery in young patients (< 65 years old). We developed projections for demand of TJR for the young patient population in the United States. The Nationwide Inpatient Sample was used to identify primary and revision TJRs between 1993 and 2006, as a function of age, gender, race, and census region. Surgery prevalence was modeled using Poisson regression, allowing for different rates for each population subgroup over time. If the historical growth trajectory of joint replacement surgeries continues, demand for primary THA and TKA among patients less than 65 years old was projected to exceed 50% of THA and TKA patients of all ages by 2011 and 2016, respectively. Patients less than 65 years old were projected to exceed 50% of the revision TKA patient population by 2011. This study underscores the major contribution that young patients may play in the future demand for primary and revision TJR surgery.,[object Object]