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Published 4/1/2013
Daniel J. Stinner, MD; Hassan R. Mir, MD; William T. Obremskey, MD; Manish K. Sethi, MD; A. Alex Jahangir, MD

How Can We Improve the Value Proposition?

Medical journals and researchers can play a role

The United States is moving into an era that recognizes cost containment as a priority for the healthcare system. But healthcare providers face a dilemma in attempting to ensure that patients receive the highest quality of care while containing healthcare costs.

This dilemma has resulted in the use of a new buzzword—value—defined as quality divided by cost. Several leaders in orthopaedic surgery are pushing the profession forward, using data to help create health policy that recognizes the value of the care that we, as orthopaedic surgeons, provide to our patients. With the rapid changes in healthcare delivery, it is imperative that surgeons lead initiatives to ensure that the value of the musculoskeletal care provided to patients is recognized.

Measuring value
The concept of value is not unique to the practice of medicine and has long been applied in many other fields. For example, when people are ready to purchase a car, they would normally do some research and come up with a list of vehicles that can get them around town safely and comfortably. If cost were not part of the purchasing equation, many people would be driving the most luxurious, feature-laden new vehicle they could find.

But cost is part of the equation, and buyers are aided in making fiscally responsible decisions by numerous consumer research databases. Perhaps more importantly, once the choices are narrowed down, the sticker on the windshield lets consumers know how much they must pay.

Similarly, when physicians prepare to treat a patient, they research various treatments to identify which will likely lead to a proven good outcome. But in medicine, the “sticker price” is often not known and often not asked.

Because neither patients nor physicians have been held accountable for the cost of the treatment (a third-party payer, such as the government, employer, or insurer usually takes care of that), the trend has been toward expensive new treatments even if they have not been proven superior to current or less expensive treatments.

The U.S. healthcare system cannot continue to ignore the cost portion of the value equation. Although the use of evidence-base medicine (EBM) helps to evaluate the quality portion of the value equation, little evidence can be found in the medical literature that recognizes the importance of cost. The recent report from the Institute of Medicine recommends that healthcare organizations expand the availability of information to include cost as well as quality and outcomes.

As physicians, we need to take the lead in doing our best to ensure quality care, while keeping costs in mind. In other words, we need to maximize the value of the care we provide. Value in medicine, as in most other industries, can be graphed on a utility curve (Fig. 1). As costs increase, a point is reached at which the marginal increase in quality is insufficient to justify the additional cost of care.

The role of journals
Most surgeons have now adopted an evidence-based approach for treatment regimens, which they learn about and share through medical journals. Therefore, medical journals and researchers can play an important role in informing orthopaedists—not only about the evidence regarding the quality of a new treatment, but also about the value of the prescribed treatment—by including a cost analysis. The cost analysis model should include both potential increases in the patient’s quality of life as well as potential savings from the proposed intervention so that information can be used in determining value.

David Eddy, founder and medical director of Archimedes, Inc., which seeks to develop models to improve the quality and efficiency of health care, questions how EBM can improve healthcare costs if cost data is not included. The current literature is very good in reporting the effectiveness of a treatment, procedure, or technology and results in quality care. But after identifying appropriate treatment options, the next question should be, “Well, how much does each cost?” And that information isn’t in the literature.

Researchers and journals can help orthopaedic surgeons address cost containment issues in the following ways:

  • They can conduct and publish studies that evaluate new technologies and compare them to the current standard of care (quality information).
  • They can include financial analysis data in studies that evaluate new procedures, techniques, or implants, when feasible (cost information).

When new technologies or treatments are not compared to the standard of care, it becomes more challenging to determine the true benefit of such treatments or technologies (quality). And when financial data is not reported when available, physicians cannot take cost into consideration in their clinical decision making. But if both quality and cost information are included, physicians and patients can make decisions using the value proposition—thus resulting in better, more cost-effective care.

Why us, now?
It is imperative that we, as physicians and orthopaedic surgeons, lead the way in proving the value of care that we provide. If we do not take the initiative, others—including the government—will lead the way.

More than a decade ago, the Centers for Medicare and Medicaid Services issued a notice to publish a proposed rule that would clarify what treatments are “reasonable and necessary.” The notice also stated that Medicare would require new treatments to provide added value or no reimbursement for them would be forthcoming. Although this proposed rule was never finalized, it points in a likely direction for the future of health care.

To determine the cost-effectiveness of treatment interventions, economic studies use the concept of quality-adjusted life years, a combination of life years gained and quality of life. Such studies can demonstrate the impact that orthopaedic surgeons can have on improving patients’ quality of life, while reducing overall medical costs.

For example, a 1996 study on the cost-effectiveness of total hip arthroplasty found that the procedure resulted in cost savings—better than cost effective—in a 60-year-old white woman with functional limitations due to hip osteoarthritis. Other studies have used economic data to evaluate more expensive technology, to determine if its use is appropriate, and if so, in what clinical scenarios.

Such information is key if policy begins to dictate the dollars that physicians can spend on patient care; it will help give us as orthopaedic surgeons the ability to ensure that we can continue to provide quality care to our patients.

When physicians turn to journals for help in answering clinical questions, they often can find which treatments lead to quality care, but rarely can uncover cost analysis information. As journals and researchers begin to include more financial data, we as orthopaedic surgeons will have the right information, both clinical and fiscal, to face the healthcare cost conundrum and prove the value of the care we provide.

Daniel J. Stinner, MD; Hassan R. Mir, MD; William T. Obremskey, MD; Manish K. Sethi, MD; and A. Alex Jahangir, MD, are all associated with the Vanderbilt Orthopaedic Institute Center for Health Policy.


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