Why the Time Might Be Right for Direct Orthopedic Care

Primary Care can't be the only kid in the alt care sand box

The concept of direct care, healthcare delivery that relies on patients paying flat, transparent fees for treatment, is gaining popularity in primary care.  With a shift toward consumerism in medicine, price transparency, and a growing desire for innovative approaches to medical treatment, there is increasing interest in non-traditional models of care.  Primary care lends itself to a direct payment model with services including annual checkups, same and next-day appointments, and access to 24-hour care with more emphasis on the doctor-patient relationship.  Traditional specialist care is felt to be less amenable to a direct pay model.  It’s more costly and may involve surgery and other invasive procedures that are too expensive for patients to pay for out-of-pocket.  However, with current models of healthcare delivery failing to consistently provide high-quality, cost-effective, accessible, and patient-focused solutions, patients and physicians are beginning to embrace alternative solutions.

How I define value.

In some circles, “Medicare-for-All” (or some form of single payor system) is viewed as a panacea to cure what ails American medicine.  Despite this optimism, the specifics and sustainability of such a plan remain ill-defined.  The goals of such a system could be difficult to attain while preserving access and controlling costs.  Others feel Medicare Advantage, government-funded and privately administered, offers the right mix of competition and value-creation.  But skepticism over MA continues.  Making healthcare affordable for many patients without the need for expensive, confusing, and complicated insurance plans may represent a Holy Grail in addressing the shortcomings of our current system.  For specialist physicians a direct care system facilitates price transparency, eliminates the burden of convoluted insurance contracting, pre-authorization, and denials, and restores control of the process.  In such a system, patients benefit by making more informed choices with their healthcare dollars, avoiding surprise billing, and reducing their reliance on expensive and ever-changing insurance benefits.  Employers, currently being crushed by rising healthcare costs, muddy fiduciary obligations, and principle-agent problems could solve many of their problems by cutting out the middlemen.  Accountable care organizations (ACOs), value-based models, and even Medicare Advantage plans could all benefit from a novel approach to musculoskeletal care.  Finally, the entire healthcare system benefits when both doctors and patients have more direct responsibility for utilization of healthcare resources and increased competition to provide better, more cost-effective care. 

Musculoskeletal care, one of the largest drivers of Medicare and employer healthcare expenditure, would seem to be an unlikely candidate for a direct care model.  However, several ongoing shifts in MSK care delivery may challenge the long-held notion that Orthopedics cannot support alternative models such as self-pay or direct contracting.  While certain cases of Direct Orthopedic Care (DOC) exist (such as the Surgery Center of Oklahoma, practices/physicians who have opted-out of Medicare, and Orthopedic-focused Urgent Care Clinics), widespread adoption of this approach hasn’t yet materialized.  Given the current healthcare environment, there are several reasons why the time may be right for more accessible and widely available DOC.

Payment Models are Shifting

In the past, fee-for-service (FFS) payments meant reimbursement for care was tied to volume, not necessarily quality or stewardship of resources.  FFS is dying a slow but almost certain death as stakeholders have realized this system fosters overutilization of services and unsustainable growth in costs.  CMS’ value-based BCPI program (and its successor BCPI-A) have placed a focus on cost and quality by shifting risk/reward to providers.  Employers and private insurance companies are also seeing the value of bundles although such arrangements though adoption has been slower.  A burgeoning ecosystem of conveners, Centers of Excellence, and care navigators has arisen to connect patients, employers, and care organizations with vetted providers of Orthopedic care.

The future of sustainable VBC may lie in physicians and patients/employers/payors collaborating to design equitable, sustainable, condition-specific bundled payment arrangements.  Such models could be uniquely implemented to include a range of services attached to the initial episode of care such as implant guarantees, coverage of postoperative care for up to a year (or other agreed upon period of time), and surgeon fiscal responsibility for certain complications related to the surgery.  Surgical episodes can be nested in the broader care journey that starts at the time of diagnosis and rewards evidence-based, longitudinal care rather than revolving around a procedure. 

The Rise of Ambulatory Surgical Centers

Many Orthopedic surgeries have migrated from the inpatient setting to the ambulatory setting in recent years including hand/upper extremity surgeries and sports medicine cases such as ACL reconstruction, rotator cuff repair, and arthroscopic knee and shoulder debridements.  Joint replacement surgery and spine surgery, once thought to be too complex for ASCs, have been proven to be safe and cost-effective in the outpatient setting.  While this shift was already underway, the pandemic accelerated the migration of more complex Orthopedic procedures to the outpatient setting.  CMS removed hip and knee replacement from the “Inpatient Only List” and now supports reimbursement for these cases in the ASC.  The trend is only expected to continue. 

There are several advantages to shifting surgeries such as hip and knee replacement to an ASC.  ASCs provide services at significantly lower cost than inpatient facilities – often on the order of tens of thousands of dollars.  Physician ASC ownership rewards those providing the bulk of the care while emphasizing quality, cost-control, and patient experience.  Such centers can leverage transparency in pricing and outcomes to attract patients and negotiate favorable contracts.

Lessons Learned from VBC Programs

Contrary to popular belief, Orthopaedic Surgeons, particularly Joint Replacement specialists, have embraced VBC through programs like CJR and BPCI.  Despite the shortcomings of these programs, important lessons have been learned that can be leveraged to create better value-based care models.  Major Orthopedic procedures have long brought with them the need for expensive post-acute care including VNA, SNF, inpatient rehab, in home and outpatient physical therapy and other services that are significant drivers of costs associated with these procedures.  Bundled payment programs have placed an emphasis on reducing reliance on such services.  As a result, long held practices around peri-operative care have been challenged and shown to be unnecessary.

Several studies have shown that patients can safely be discharged the same day or within 23 hours of surgery.  Some may not need extensive physical therapy or may benefit from lower cost digital health solutions.  Direct home discharge is safer and less likely to result in readmissions or complications.  As a result, the need for post-acute services (and the increased costs they bring) has been largely called into question.  In addition, BCPI-like programs have placed emphasis on patient optimization prior to surgery to reduce complications and improve outcomes.  By identifying and addressing modifiable risk factors such as HgbA1c levels, tobacco use, chronic narcotic use, BMI, untreated or undertreated anxiety/depression, surgical risks can be mitigated.  Reducing the need for perioperative services, improving outcomes, and reducing complications helps decrease the cost associated with Orthopedic care and may help make these procedures affordable in a direct care setting.

Evolving Healthcare Technology

As billions of dollars flow into the development of healthcare technology solutions, the ability to care for patients remotely has improved.  Telemedicine, virtual PT, remote monitoring apps, wearable devices, and patient engagement platforms allow for more patient “touches” in the perioperative period.  Extending care into the home through technology can reduce re-admissions, ER visits, and complications while improving patient satisfaction.  Technology solutions may allow for more cost-effective use of resources and help reduce the need for expensive post-acute care.  Wearables provide the ability to track postoperative progress while offering “just-in-time” interventions.  Artificial intelligence and deep learning algorithms will help identify patients at risk for poor outcomes or complications and allow optimization of those patients prior to surgery.  CMS is increasingly acknowledging the value of technology by supporting reimbursement of RPM/RTM through CPT codes.

Advances in surgical technology including patient specific implants and robotics have been developed with the potential to improve surgical outcomes and reduce outliers.  While the benefit of such technology remains a matter of considerable debate, these solutions will continue to evolve over time and may eventually demonstrate true clinical impact.  In theory, technological advances can improve costs by providing more predictable outcomes, reducing complications, and eliminating the need for certain expensive services.  As reimbursement becomes increasingly tied to patient-reported outcome measures (PROMS), technology can improve the patient experience and doctor-patient relationship in a direct care model.

Growing Involvement of Disruptive Outsiders

The limitations of current models of American care delivery and the $3 trillion healthcare business opportunity have attracted multiple companies previously viewed as outsiders to the traditional medical industry.  Companies such as Amazon, Walmart, CVS, Best Buy, Dollar General, Apple, Google and others continue to grow their healthcare footprint.  Private equity firms see the opportunity to support the shift to VBC driven in large part by migration of cases to owned ASCs and negotiating platform-wide value-based contracts.  While physicians are typically fiscally conservative and less willing to risk transitioning to a direct care model, pairing with such entities may help reduce risk and facilitate adoption of less traditional models of care.  Device manufacturers, independent ASC companies, and ancillary service providers may also seek ways to partner directly with physicians to counteract shifting paradigms of medical economics.  Unconventional arrangements may allow for the alignment of interests and facilitate Direct Orthopedic Care that preserves the doctor-patient relationship and shifts control away from incumbents.

While the concept of Direct Orthopedic Care as a way to address the challenges of MSK care delivery is exciting, limitations remain.  Some critics question whether direct care disproportionately benefits physicians over patients or limits access.  Many patients may be unable to afford direct care even if prices fall and treatment is more reasonable.  Access to care for such patients needs to be maintained either through traditional insurance models, governmental programs, or better value-based arrangements.  In other words, incentives must be aligned – something that’s as yet been difficult to consistently achieve.  Direct care and full price transparency may lead to commoditization of Orthopedic care which could result in devaluing of services and a race to the bottom for providers.  Despite these concerns, there remains the potential of direct or alternative care to eliminate elements of current models that complicate treatment.  The goal of providing high quality, consistent, transparent, and engaging Orthopedic care is a worthy pursuit that may not be as far off as once believed.