Moving Forward Together

While it is true that there has been long standing tension between health care providers and those companies that pay for their service. It is also true that this tension need not exist—it is an old school way of doing business. Today, providers and payers need to operate in a space of collaboration in order to provide the best service for patients, deliver quality care and remain financially viable in this ever changing global market place.

As the health care industry moves from volume to value (as discussed in previous posts), we have to relinquish our old debates and come together to answer the question “how do you pay for quality” and develop a rubric that does just that. Creating value for patients has to be our collective goal and it is what will provide both the provider and payer with an increasingly critical competitive advantage moving forward. 

As an industry, health care providers need to develop new models of operation and care, benchmarks and frameworks that allow us to demonstrate improved patient outcomes and quality. In turn, the payers need to sign on to “reward” this type of modeling, paying more when higher quality and better patient outcomes are achieved.

At Jupiter Medical Center we have begun to do our part and have developed a new way of running our orthopedics service line, putting together a value-based bundle model as part of our operations. 

Just over two-and-a-half years ago and in order to provide world-class care and the highest patient care at our Jupiter Medical Center’s Anderson Family Orthopedic and Spine Center of Excellence, we brought together nine local orthopedic surgeons from several independent physician practices to form Orthopedic Management Company, LLC and help us manage our orthopedic service line.  Orthopedic Management Company is now a conglomerate of these doctors working together to enhance the orthopedic patient’s experience from their first consultation to post acute care and full recovery.

The Orthopedic Management Company is charged with three objectives: enhance patient service, improve patient outcomes and provide more affordable care. Here, the doctors are afforded the opportunity to share ideas and best practices, and provide proven recommendations for operations that reduce cost and improve care and outcomes.

From developing a continuum of care plan that begins with pre-op education through post acute and outpatient rehabilitation care, all providers of the patients care are in dialog so as to provide the patient the most effective and coordinated care possible. This, in turn, results in a better quality of care, better outcomes and reduced costs as there is less chance for duplication of services, unnecessary tests etc.  We also continue to receive high marks for quality and service from both patients and outside evaluators alike, including the Joint Commission who has continue to recognize our high-quality work in the areas of total join replacement for hips, knees and shoulders.

As we continue to find more innovative ways to drive quality and reduce costs, payers need to join us at the table to make positive changes for the industry and the consumers. I realize that there are others working in this space, what models or initiatives from both sides of the industry have you observed to be effective?

Quality Conundrum

The health care industry finds itself in a period of flux and transition as it moves from a volume-based model of operation to one that focuses on value. As the case with most industries, change does not happen at one unifying moment but comes slowly and sporadically.

In the volume or fee-for-service model health care providers are paid based on the volume of services provided. Under this system, there were always incentives to “do more.” The more tests you order, patients you see, procedures you do, the more money you will make. The critical problem with this model, of course, is that what is best for the patient, can some times get left out of the equation. We  now find ourselves moving (and rightfully so) towards a reimbursement system that is “value-based,” where hospitals are rewarded (and penalized) based on the quality of care they provide. Under this system quality is measured on a variety of factors, including patient outcomes, hospital-acquired infections and readmission rates. For patients, this means safe, appropriate, and effective care with enduring results, at reasonable cost.

As I stated before, change comes slowly. Many providers, like Jupiter Medical Center, have embraced and have moved towards a quality-based system, while payers still operate and reimburse for services based on volume of care. So the question becomes, how do you move to the value side and not hurt your organization’s bottom line while still having to work within a fee-for-service world?

My answer: you do so pragmatically and thoughtfully. You might have to start out implementing a value model in only certain areas of operation, that for a time, run along side your fee-for-service model of care. And then as incentives change, you might then be able to integrate more and more pieces of your service into the overall operation. 

This approach is not without its challenges and significant amount of analysis.  For example, at Jupiter Medical Center we have built a clinically integrated model that has subcomponents that can be implemented as the reimbursement models change. We have been working on bundled payment models for orthopedics, which we implemented in collaboration with our physicians.  This plan is working well in the Medicare population and we are now working with a commercial payer to design a new payment model for non-Medicare patients.

Regardless of your approach, organizations need to begin to move into the “value model space” especially as consumers take a larger and more active role in their health care selection with an eye on value.