SURGEONS WILL INCREASINGLY BEAR FINANCIAL RISK WITH NEW PAYMENT MODELS
Value-based reimbursement is supplanting traditional fee-for-service payment. Forward thinking payers, providers, and patients are redesigning care delivery to maximize patient experience and population-level health at an affordable cost (the “Triple Aim”). A National Academy of Medicine report estimates that a minimum of 30%, and potentially over 50%, of all health care spending is waste.1 This waste represents a meaningful target for value transformation, particularly in surgical care.
To this end, the recently enacted, strongly bipartisan Medicare Access and CHIP Reauthorization Act (MACRA) specifically incentivizes physicians to deliver high-quality care in a cost-effective and coordinated manner. The Centers for Medicare and Medicaid Services (CMS) has established 2 pathways for participation—the performance-adjusted fee-for-service Merit-Based Incentive Payment System (MIPS) and the greater risk-sharing Alternative Payment Models (APMs). Working within the fee-for-service paradigm, the American College of Surgeons (ACS) has created and launched the Surgeon Specific Registry (SSR).2 This centralized database is constructed for use by individual surgeons, enabling state of the art case tracking and outcomes reporting. Thanks to its thoughtful design and continued evolution, surgeons can leverage the database to easily participate in the Quality Payment Program MIPS.
For surgeons seeking to instead participate in an APM, episodic (bundled) care pathways are emerging as one of CMS's preferred payment mechanisms. Private payers are also experimenting with similar approaches. The Comprehensive Care for Joint Replacement program's success to date—along with the ACS proposal that would create bundles for most surgical procedures—signals momentum for these value-based payment models.3 In order to succeed clinically and financially, surgeons must understand the value opportunities across the continuum of surgical care and actively engage their health systems in designing high value surgical care delivery.
EPISODIC REIMBURSEMENT AND FOUR PERIODS OF VALUE OPPORTUNITY IN SURGICAL CARE
Surgeons are already familiar with episodic payment. Medicare's Diagnosis-Related Group (DRG) payment system covers hospital care from the operating room through hospital discharge. Although physician fees flow separately, surgeons currently work with hospitals to maximize value during inpatient episodes.
Emerging value-based payment models, however, will incentivize value enhancement throughout the full continuum of surgical care. This continuum spans 4 self-evident phases: preoperative evaluation, surgery, postoperative inpatient recovery, and post-hospitalization care (postacute care). Waste elimination opportunities and value improvement strategies exist for all 4 periods (Fig. 1). Complications undercut the entire continuum, damaging clinical and cost outcomes for both patients and surgeons.
Preoperative Evaluation and Diagnosis
Three questions guide activity in the preoperative period: is the patient's disease best treated with surgery, does the patient want surgery, and what presurgical measures can ensure the safest operation with the best outcome? Current bundled payment contracts do not target preoperative services—episodes begin on the day of surgery. However, ACS episodic payment proposals include a “look-back” period that evaluates diagnostic resource utilization before surgery.3 By measuring variation within preoperative care, the best, most efficient practices can be identified.
The decision to operate must be made from each patient's vantage. A “green-light” from anesthesia is necessary for informing the likelihood of surviving surgery, but medical risk assessment should include information that can guide preoperative interventions and operative details. Shared decision making with patients, their families, and primary care may direct a patient away from surgery, or delay surgical treatment until the patient is globally fit for surgery. The ultimate decision to proceed requires viewing the surgical recommendation vis-a-vis the patient's complete life.
Episodic bundles pay the same regardless of complications or repeat surgery. Surgical teams can eliminate a meaningful percentage of complications by thoughtful upfront care. They can “fingerprint” each condition and procedure, identifying potential generic (eg, deep vein thrombosis) and case-specific (eg, top hip shaft fracture) complications. Once identified, surgical teams can explicitly measure and manage these predicable risks. Useful interventions that go beyond traditional approaches may include prehabilitation and home safety assessments before surgery.
Surgeons have more direct control over operative costs than any other area. Many surgeons live with an “ask and get” paradigm in the operating room. As “buyers,” we are often unilateral and woefully uninformed, choosing complex, expensive technologies not necessarily supported by evidence of improved clinical outcomes. Although personal relationships with vendors can influence choices, surgeon unfamiliarity with seller pricing, margins, and supply chains likely has a more substantial impact on value.4
Over the last century, standardization in the operating room has dramatically reduced intraoperative complications. A similar approach can drive value-based selection of instruments and supplies. Recent studies demonstrate that feedback of operating room supply utilization and costs, sometimes coupled with a small incentive, can reduce overall costs.5 Pioneering groups are now making costs transparent at the point of care. Others are engaging surgeons in purchasing decisions, including product selection, sourcing, contracting and, importantly, patient outcomes.
Many surgeons attempt to optimize postoperative hospitalization, but often without considering value. Surgeons steer patients into specialized units and familiarize staff with their preferences for postoperative care. But when every surgeon has a unique approach, staff can face unnecessary, sometimes overwhelming, complexity. This complexity can facilitate deviations from best practices and impair care delivery execution.
True production cost transparency allows teams to unlock value improvement opportunities. For example, care teams should be able to easily view medication prices or per-diem costs of intensive care unit versus surgical floor beds. Some surgical teams have identified the component elements of a perioperative episode and priced each item to generate a “bottom-up” true cost associated with different procedures.6 Other groups have demonstrated that coordinated use of value-based formularies can achieve real savings.7 Finally, multi-intervention enhanced recovery after surgery (ERAS) programs leverage coordinated, standardized practices to improve value while speeding patient recovery.8
Post-hospitalization (“Post-acute”) Care
A series of recent investigations9–11 suggest that postacute care—even after excluding ambulatory and minor inpatient surgery—may represent the greatest opportunity to improve surgical value. Three areas are particularly attractive: 1) upfront work in preoperative phase to obviate need for postacute care, 2) preplanning with postacute facilities to achieve a limited stay, and 3) specific goal-directed discharge criteria so that the patients do not remain admitted solely to exhaust Medicare benefits.11
Care providers now bear financial risk for complications and readmissions. A structured postdischarge surveillance system can combat readmissions. Simple “low-technology” solutions, such as standardized protocols to prevent post-op wound infections or phone calls for post-op follow-up, have been shown to improve health outcomes and reduce costs.
VITAL ELEMENTS FOR SUCCESS
As surgeons, we have a choice between leading the value transformation or yielding to a disruptive trend. As advocates for surgeon leadership in this endeavor, we recognize the empowering factors that will facilitate successful surgeon engagement: cost transparency, surgeon education, and aligned incentives.12 Even in today's cost-conscious environment, obtaining meaningful cost data has proven difficult. There are 2 primary sources of granular cost data. The first resides in existing hospital-based general cost accounting systems that have been adopted in over 1300 US hospitals.13 Their use requires partnering with hospital administration to properly aggregate and translate the detailed cost data into procedure, surgeon, and service-line specific costs. The other primary method for understanding delivery cost is Time-Driven Activity-Based Costing (TDABC).6 Best used with high-volume and/or high-cost perioperative episodes, this method maps clinical processes and assigns personnel and material costs to each step in the process. Surgeon-led teams around the country have already succeeded in cutting the cost of care utilizing one of these systems. The ACS is also in the process of developing a tool to facilitate cost transparency, which holds the promise of demystifying this crucial financial information.
While working to improve value is conceptually intuitive, leading successful system and process redesign requires acquisition of new knowledge, skills, and experience. Along these lines, the ACS has put out a manual The Optimal Resources for Surgical Quality and Safety 14 that draws on the expertise of over 100 surgeons already engaged in improving patient care at their institutions. Training programs available at the regional and national level can also help fill the educational gap and serve as opportunities to forge relationships with leaders in this field.
Finally, surgeons must be financially supported to perform this work. Leaders need protected time, and administrators must build pathways for career advancement in this realm.13 At the very least, scorecards that track performance on value-based measures meaningful to the surgical team and gain sharing are mechanisms by which surgeons can be engaged in improving the value of care delivery.5
Surgeons play the paramount role in the entire surgical continuum, shepherding patients throughout their journey. We also must understand our role within a greater value-centered paradigm of care. With proper education and support, including access to our own cost data and quality outcomes, we should be sufficiently able to lead these efforts. Specifically, investigations of surgical subepisodes can yield innovations that allow us to shape the future of surgical care delivery. Unlocking these value opportunities will help surgical groups thrive in the new payment landscape. Surgeons can enhance value through waste elimination, proving again an old truism: a chance to cut is a chance to cure.
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