Bozic Value-Based Health Care in Orthopaedics

Chapter 16: Orthopaedics as a Service Line

The value-based care reimbursement model has been growing in popularity in recent years as patients seek out simpler and higher quality health care services. There are several alternative reimbursement models available in the value-based system. These include pay-for-performance, shared savings, bundled payments, and capitation. The main objective in pay-for-performance models is to improve quality of care; however, there is little evidence of significant, uniform, or sus tained improvements for select quality indicators. There is also increased risk of miscoding and upcoding under this model. The shared savings model takes the percentage of net savings and distributes it among providers through bonuses. Last, in a capitated model, clinicians are prospectively paid a sum of money per enrolled patient to provide all the care needed by the enrolled patient. 18 With a population health model such as capitation, clinicians can participate in the savings and continued growth of capitated payments, providing strong incen tives for the coordination of care and maximizing efficiency. In partial capitation, a monthly fee is paid to the clinician for a defined set of health care services for a particular population. Although the clinician bears full risk for the capitated clinical services, any services that are not covered are typically reimbursed on a FFS basis. Conversely, in a full capitation model, the provider network assumes 100% financial risk for the covered population. Reimbursement is determined on a per-member, per-month basis. 19 Capitation can occur both at a clinician and system level. At the clinician level, for example, general practitioners can receive capitation payments for each patient enrolled in their respective program. At a system level, population-based funding models use information on physician practices and hospital and postacute care, along with demographic and socioeconomic data, to project the health care needs and expenditures for a region’s population. System-level capitation allows net works to benefit from driving down medical costs relative to the expected cost. Clinicians have financial incentives to lower utilization and deliver care focused on health prevention and promotion. The longer the capitation period, the more likely clinicians will make use of health prevention and promotion treatments. 19 The fully capitated model is ideal in orthopaedics because it controls costs while monitoring and managing risk. It aligns all stakeholders, patients, clinicians, payers, and health systems in a data-driven, evidence-based ecosystem that pro vides surgeons with clinical and surgical care pathways and promotes high-quality outcomes. A population-based approach of global, capitated care has the poten tial to allow the management of the full scope of medical economics related to musculoskeletal care while engaging providers in continued improvement, cost containment, and higher value. 20 SUMMARY It is important for physicians to become engaged in service line management in order to represent their value to the health system when negotiating for resources. Furthermore, the establishment of service lines with key stakeholders fosters a patient-centric multidisciplinary approach in an effort to optimize patient quality of care, productivity, and growth. Establishment of a successful orthopaedic service Copyright © 20 Wolters Kluwer, Inc. Unauthorized reproduction of the content is prohibited. 23

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Value-Based Health Care in Orthopaedics