Tampa-based Orthopaedic Solutions Management (OSM), one of the country’s largest orthopedic-focused management services organizations, is at the forefront of this in Florida after more than eight years of demonstrated results in its value-based programs for total joint replacement and spine surgery. OSM was formed in 2020 by Florida Orthopaedic Institute, one of the largest orthopedic practices in Florida, and MD Healthcare Partners.
Becker's ASC Review recently spoke with Michael Stubee, vice president of payer strategies at OSM, about his organization's experience with value-based care programs across inpatient and outpatient sites of care, including ASCs. He shared lessons learned and best practices.
Success with bundled payment programs depends on care process design and contract terms
Clinical optimization pre-surgery and care management post-discharge have similar implications for all patients. Care managers, physical therapists and home health aides are all necessary complements to a clinically strong surgeon. The acuity mix of patients is more likely to vary from site to site. An ASC patient might require fewer home health visits than a hospital discharge, but for both patients the same objectives of avoiding complications and unnecessary care are still in play.
On the contracting side, defining the episode of care and the consequences of clinical variation are as important as setting the target prices or the gainshare terms. "Some gainshare agreements have more explicit clinical exclusions, while others may have different post-acute requirements," Mr. Stubee said. "The key is understanding the level of accountability you are willing to take on and aligning the payment mechanisms to incentivize and reward good outcomes."
To drive better outcomes and lower costs, payers and providers must engage in frequent communication
A regular cadence of meetings is critical for payers and providers to review data and address variation. The agenda for these meetings should include discussions between health plan medical directors and physician leaders from the provider side, as well as a strategic financial review of episode cost trends. This ensures any change in patient mix or care delivery is backed by sound data that both parties can agree on.
"Between meetings, an open line of communication is essential," Mr. Stubee said. "Keys to success are honesty and transparency — these are two areas where payers and providers have been poorly aligned historically."
If performance trends change, especially in a negative direction, all parties must be aware and either take action to correct them or at least agree on the drivers of the decline. The goal is to avoid surprises.
"The quickest way to lose physician support for a value-based program is an unexpected and/or unexplained change from a payer that erodes a potential gainshare, or worse, activates a downside risk obligation," Mr. Stubee said.
Hospitals and health systems have aligned their value-based strategies to the ASC model
By embracing the ASC model, healthcare organizations can take advantage of site of service differentials and incentive outcomes. OSM has joint venture ASCs with several partners. This has enabled the company to participate in three-way conversations with payers about supporting value-based care models across all sites of care.
"We have more opportunities to partner with health systems, aligning care delivery with clinical decision-making, without concern for the financial implications," Mr. Stubee said. "In other words, we can align both the payer and hospital strategies to ensure that physicians are equally incentivized to provide optimal care across all locations."
Self-insured organizations are promising partners for value-based care arrangements
Many large, Fortune 500 companies and municipal entities are self-insured. Healthcare costs are often their second-biggest expense driver, after salaries and wages. More and more of these organizations are looking for solutions to reduce those costs.
"We are seeing a proliferation of direct-to-employer, as well as third-party Center of Excellence agreements that cover musculoskeletal care," Mr. Stubee said. "Most of these have either incentives or penalties for using a specific selection of providers. Some even provide travel benefits as further incentive for choosing high-value providers. These programs are inherently designed to align with providers who want to share in the benefits of achieving quality outcomes."
Conclusion
Winning in the value-based care arena include a focus on process, contract terms and communication and collaboration across all key stakeholders. OSM has used these best practices to successfully replicate its value-based care results across all sites of care. "We continue to see positive outcomes and gainshare distributions, and we reinvest revenues into the people, processes and technology needed to ensure continued success with these models," Mr. Stubee said.