Under a volume-based system, reimbursement is directed to individual services; under a value-based system, reimbursement would be based on an episode of care and cover all services provided to the patient. PDF of Image

AAOS Now

Published 6/1/2012
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John Purvis

Preparing Your Practice for Health Reform

AAOS course, “Shifting Volume to Value,” lays groundwork for transformation

A superb faculty of active, influential leaders in health policy, quality initiatives, and orthopaedics interacted with a standing–room-only audience during the new AAOS course, “Shifting from Volume to Value: Preparing Your Practice for Health Reform,” held March 30–31 in Washington, D.C. Attendees included practicing orthopaedic surgeons, medical directors, practice executives, and healthcare payers. Orthopaedists represented the diversity of practices across the United States and included both younger and older practitioners, clinicians, and academicians.

The faculty was only one of the reasons I’d been attracted to the course. For me, the biggest draw were the sessions on delivering exceptional patient and family care experiences. Those presentations given by course co-director Anthony DiGioia III, MD, justified my trip costs (see related AAOS Now article, “Viewing Care Through the Eyes of Patients and Their Families,” October 2010). The added value for me was the clarity provided on some pretty confusing healthcare economics and policies.

Defining value
The keynote address, “Enhancing Value in Healthcare,” was presented by Michael E. Porter, PhD, the Bishop William Lawrence University Professor at Harvard Business School, and a leader in defining value in health care. He emphasized that achieving high value for patients should be the primary goal of healthcare delivery. Other goals—such as access to services, containing costs, safety, patient satisfaction, quality, and profitability—are often conflicting, which results in delays in performance improvement.

Dr. Porter defined value (V) as the health outcomes (O) achieved per dollar spent (cost, C) or V = O/C. Under this formula, value is centered on the customer (patient) and measured by outcomes achieved rather than the volume of services delivered. Outcomes, he acknowledged, are multidimensional and condition-specific. The cost to achieve those outcomes are the total costs for the cycle of care of the patient, not just individual services such as surgeon’s fees.

Stressing the importance of physician leadership, Dr. Porter said that physicians know what to do, need to find out how to do it, and should be the drivers to achieve value in healthcare.

Varying perspectives
Course attendees heard various perspectives on the current state of musculoskeletal care delivery. Patients, policy makers, hospital/health systems, and payers were all represented. According to Robert A. Greene, MD, national vice president/clinical analytics for United Healthcare, payers are concerned about the affordability crisis. “Healthcare costs are rising to levels that may force significant service cuts and potentially could deny care to segments of society,” he noted. “Therefore, we need to understand what medical care may be inappropriate or not well applied.”

Representing the Centers for Medicare & Medicaid Services (CMS), the largest purchaser of health care in the world, Shari M. Ling, MD, deputy chief medical officer, noted that a value-based culture is focused on what is best for patients and that quality can be measured and improved at multiple levels—from the individual practitioner to the practice or facility setting to the community.

Dr. Ling outlined several CMS initiatives to support the delivery of quality care, including the Physician Quality Reporting System, Physician Compare, Hospital Value-Based Purchasing Program, and the Measure Applications Partnership. She challenged attendees to define quality measures that will meaningfully drive improvement toward better outcomes, to prioritize outcomes, and to specify the clinical quality measures that should be included in the computation of a value modifier.

The second day of the course focused on practical matters, such as implementing performance improvement programs and sharing lessons learned from various types of care delivery models. The impact of accountable care organizations (ACOs) and factors that physicians should take into account when considering joining an ACO were among the topics covered.

The impact of reform
Just a few days before the course was held, the Supreme Court of the United States heard arguments about the constitutionality of the Patient Protection and Affordable Care Act, which was passed in 2010 and aimed at reforming health care. According to faculty members, however, the Court’s decision will not change the need to achieve value in our system of health care.

As course co-director Kevin J. Bozic, MD, MBA, said, “The healthcare delivery system is changing and the question is not ‘if’ but ‘when.’” He summarized the impact of the course as follows:

  • More than any other course it is apparent that this one has been received by the participants with an enthusiastic energy and transformative attitude.
  • From the variety of speakers, we heard optimism about our ability to change into a more value-based system.
  • All recognized that physician leadership is required and welcomed.
  • Trust is required to build relationships with industry and government.

Dr. Bozic challenged the audience to “Go home and on Monday get started with developing performance measures, documenting outcomes, and evolving your practices to patient- and family-focused care.”

It’s a challenge I’m looking forward to facing.

John M. Purvis, MD, is a pediatric orthopaedist at the University of Mississippi Medical Center, and a member of the AAOS Now editorial board.