EP434: 5 Surprises About Bundled Payments, With Benjamin Schwartz, MD, MBA

[00:00:00] Episode 434, Five Surprises About Bundled Payments.

[00:00:07] Today I speak with Dr. Ben Schwartz.

[00:00:18] American health care entrepreneurs and executives you want to know talking.

[00:00:24] Relentlessly seeking value.

[00:00:26] I've been in a couple of meetings lately. In one case, a health care company came up with

[00:00:31] a strategy and deployed it, and the strategy didn't go as planned. The other one, it did

[00:00:36] go as planned. It worked great. Of course, I'm coming in on the back end like a Monday morning

[00:00:41] quarterback here, but the plan that failed, I have to say I wasn't surprised. Had they asked

[00:00:46] me ahead of time, I would have told them to save their money because the plan was never

[00:00:49] going to work, even though the strategy looked like kind of a straight line from here to

[00:00:53] there. Nor was I shocked by the success of the other plan, even though this one that triumphed

[00:00:58] had what looked like five extra steps and was slightly counterintuitive if you looked at it

[00:01:03] cold without understanding the way the health care industry actually works. Here's my point.

[00:01:08] It might feel like the health care industry is chaos monkey central and impossible to

[00:01:14] predict actions and reactions. And for sure, there's always unknowns and intersecting

[00:01:19] variables, but it's not a complete black box. The trick is, as you know and I know because

[00:01:25] you're listening to this podcast, you got to understand what other stakeholders are up to.

[00:01:30] You got to get a bead on what they're doing and what their incentives are

[00:01:34] because then you can better predict actions and potentially reactions.

[00:01:38] So let me state the obvious. That's why listeners tuned into the show, as I just said,

[00:01:42] and it's what we aim to shine a light on here at Relentless Health Value, the pushes

[00:01:46] and the pulls and the forces. What's going on outside of the organizations or the silos that

[00:01:51] we work within day to day? Because if you're looking to sell to partner with, not be abstracted by,

[00:01:57] insert some stakeholder here, then it's very vital to be keyed in on what they're doing or

[00:02:02] what their customers are doing or what their customers' vendors are doing. This show should

[00:02:06] feel like it gives you a measure of control or at least that's my hope or method to find

[00:02:12] the measure of control. And I hope you succeed. That's why I continue to put out these shows.

[00:02:17] The RHV Tribe members want the same thing I want, to fix the healthcare industry for patients and

[00:02:23] for members. So thanks for being here and for making actionable the insights that you might

[00:02:28] find here. I have been looking so forward to doing a show with Dr. Ben Schwartz, orthopedic

[00:02:33] surgeon and prolific writer of deeply thoughtful and insightful posts on LinkedIn. Today we are

[00:02:38] talking about bundled payments. And today's your lucky day if you think you know a lot about bundles

[00:02:45] because most people who listen to the show at least know enough to be dangerous. So that's our

[00:02:49] starting point, which is why I asked Dr. Schwartz to talk to me about what most people find

[00:02:55] surprising about bundles and bundled payments. There are four surprises that we go through in

[00:03:00] the show today and listen to the show or read the transcript to find out exactly what they

[00:03:05] are. So no spoiler alert alert. But relative to these surprises, we get into the four types of

[00:03:11] bundles that may or may not be available. And those four types of bundles are number one, CMS bundles

[00:03:18] such as the BPCI and the CJR bundles. And we talk about the current state of said

[00:03:25] BPCI bundles which are being sunsetted probably because so many efficient clinical

[00:03:30] teams are being penalized for getting too efficient. They become victims of their own

[00:03:34] success the way the program is currently designed wherein the goalposts just keep

[00:03:38] shifting. The second type of bundle that we talk about are commercial bundles i.e. a bundle that

[00:03:43] is offered by a commercial carrier such as a Buka i.e. Blue Cross Blue Shield United Healthcare

[00:03:49] Cigna Aetna Anthem carrier. Number three kind of bundle is a direct bundle. This is a bundle

[00:03:55] that is paid for directly by a plan sponsor such as a self-insured employer. And then number

[00:04:01] four type of bundle we talk about is a condition or diagnosis specific bundle. These types of bundles

[00:04:07] do not spiral around a surgical intervention at their core which most of the current bundles do.

[00:04:14] So this last type, this fourth bundle type may describe CMS's recently announced making care

[00:04:20] primary initiative but we'll have to see about that. Speaking about the number three kind of

[00:04:25] bundle the employer direct bundles especially for musculoskeletal MSK. Let me read a post by

[00:04:32] Moby Parsons MD that I thought captured the entrepreneurial spirit of some of these orthopedic

[00:04:37] surgeons who are seeking employers to direct contract with and cut out the middleman etc.

[00:04:42] Which by the way is the main topic of an entire show upcoming with Elizabeth

[00:04:46] Mitchell from the purchaser's business group on health but Dr. Parsons wrote,

[00:04:50] When our bundle business has sufficient growth to ensure the absolute sustainability of our

[00:04:56] practice against declining reimbursements in a fee-for-service system, I'm going to get this

[00:05:00] tattoo don't tell my wife and the tattoo is free yourself. My guest today aforementioned is

[00:05:06] Dr. Ben Schwartz he's an orthopedic surgeon in the Boston area still in full-time clinical

[00:05:12] practice. He's grown very interested in healthcare innovation, healthcare technology, and does some

[00:05:17] advising and investing. Dr. Schwartz also writes a great sub stack called Dem Dry Bones. All the

[00:05:24] links to everything I just said in the show notes. After you listen to this show please go

[00:05:28] back and listen to the one with Dr. Steve Schutzer talking about how to create a center of

[00:05:33] excellence and also the one with Rob Andrews about how and why if you are a plan sponsor

[00:05:38] you might want to consider direct contracting with quantifiably amazing provider groups.

[00:05:43] Also if you are an ortho or involved in MSK care I might suggest following Karen Simonon on LinkedIn

[00:05:51] as well as Moby Parsons MD and for sure of course my guest today Dr. Ben Schwartz.

[00:05:58] My name is Stacey Richter this podcast is sponsored by Aventria Health Group.

[00:06:02] Dr. Ben Schwartz welcome to Relentless Health Value. Thank you thanks for having me this

[00:06:06] is quite an honor. Let me ask you one question before we also get into the heart

[00:06:10] of our conversation today. Where are we in the bundle time space continuum? Sure so the main

[00:06:16] bundles that people know about are through CMS to the government and that's the bundled

[00:06:20] payment for care improvement program or BPCI it's a mouthful. That started several years ago

[00:06:25] it's been through an iteration to the advanced model but the general idea is you get paid a lump

[00:06:30] sum for that HIPAA year placement and any care that happens in the 90 days after the

[00:06:36] procedure comes out of the bundle and so there's been some good lessons learned there's been some

[00:06:41] care improvement. The problem is that the target price in the bundle tends to shift lower you

[00:06:46] become a victim of your own success and then it becomes difficult to see upside reward you

[00:06:52] experience downside risk and then you have to drop out of the bundle and that's where most

[00:06:57] surgeons in the BPCI program end up and the thinking is that's going to be sunset by CMS

[00:07:03] probably after 2025 and replaced by something else we don't know what yet

[00:07:08] probably some form of specialist in primary care working together being incentivized together.

[00:07:14] There are commercial bundles and that's through obviously a commercial insurer where

[00:07:19] you approach them similar sort of concept of it's a lump sum payment attached usually to

[00:07:24] a surgical episode those are harder to get and we can talk about why that might be later on

[00:07:29] there is this third arm that's arising I think it's going to become more commonplace and that

[00:07:35] is some form of bundle agreement with a self-insured employer that's looking for high value cost

[00:07:41] effective care and so you can negotiate with them directly that's the center of excellence

[00:07:46] model or there's care navigators so there's more this direct bundled program. The final

[00:07:52] thought is eventually we expect bundles to shift away from surgical episodes of care and

[00:07:57] maybe more towards condition specific whether that's attached to back pain or knee arthritis

[00:08:03] or hip arthritis to really capture more of the care process outside of the surgical episode.

[00:08:08] Okay so you listed four types of bundles there one is the BPCI bundle which is a CMS thing

[00:08:19] paid a lump sum after a surgical episode as you said people become a victim of their own

[00:08:24] success because you get paid for efficiency so like how efficient you are becomes the

[00:08:28] benchmark and then you have to be more efficient than your efficient self. You have to get down

[00:08:33] with your more efficient self at a certain point you can't become more efficient so

[00:08:38] then yeah you start losing money and as you mentioned Sunset 2025 then you also have your

[00:08:43] commercial bundles you also mentioned number three there's some self-insured employers

[00:08:48] are contracting for bundles and a lot of times this happens in the context of a center of excellence

[00:08:55] or a COE program and then lastly there's a lot of talk I've seen around can we do condition

[00:09:02] specific bundles or diagnostic based bundles and you mentioned back pain and then the

[00:09:08] clinical group gets paid a certain amount some capitated number to take care of that

[00:09:13] patient for some duration of time. I think the latter one obviously you know surgical episode

[00:09:19] a surgical bundle just says I did a good job of doing that surgery the patient didn't have

[00:09:23] a complication or readmission at 90 days it doesn't really say a whole lot about well

[00:09:28] did I manage that appropriately up to that surgery was that surgery indicated so I think

[00:09:33] the hope for these condition specific bundles is it's going to incentivize that whole episode

[00:09:38] of care attached to that diagnosis and not just a surgery but non-surgical management if that's

[00:09:43] appropriate that surgical episode might be so called nested into that bigger bundle but it's

[00:09:48] not going to be the only focus of the bundle itself. Well what you're bringing up it's been

[00:09:54] discussed as a potential perverse incentive with these bundles a surgeon also gets paid

[00:09:59] a bundle if the surgeon does an inappropriate surgery so one of the things that is a promise

[00:10:04] of value-based care is care is appropriate and we don't have an incentive to do too much care

[00:10:10] bundles don't do anything to address that correct the hope of these condition specific bundles is

[00:10:15] that they kind of incentivize more appropriate care throughout the care journey again whether

[00:10:21] that's non-surgical treatment physical therapy and injection medications not just around a

[00:10:26] surgical episode bundles do nothing really to disincentivize inappropriate care what else

[00:10:32] might be an issue they also can potentially lead to cherry picking and lemon dropping so

[00:10:38] you operate on the healthier patients that you know are more likely to do well or less likely

[00:10:42] to have a complication so they're less likely to be a downside risk in the bundle and then

[00:10:48] you don't operate on the more complicated patient because the bundles don't do a great

[00:10:53] job of risk stratification so that higher risk patient that maybe is more likely to have a

[00:10:58] complication or more likely to use post-acute services maybe you're less likely to offer surgery

[00:11:03] too so it definitely sounds like the bundles do have disadvantages but if we're thinking about

[00:11:08] the promise of a bundle as maybe a first step into value-based care we talked about a bunch

[00:11:14] of negatives let's talk about some positives now what's the good news yeah the good news

[00:11:18] is we have learned a lot of lessons from the bundles we learned patients tend to do better

[00:11:23] if we treat them more holistically so if we take an active role in optimizing patients for surgery

[00:11:30] making sure their diabetes is well controlled making sure any anxiety or depression is taken

[00:11:35] care of because we know that affects outcomes from surgery we've learned that one of the

[00:11:39] biggest cost drivers is post-acute care so if the patient is discharged somewhere other

[00:11:44] than home after the surgery that's very expensive and guess what they also have a higher

[00:11:50] readmission rate they also tend to have a higher complication rate if they end up in a nursing

[00:11:55] facility or rehab so we've learned that it's safe for patients to go home it's cost effective

[00:12:00] for them to go home it's better for them to go home so there are lessons we've learned about

[00:12:04] how to take better care of patients how is orthopedic surgeons to see and treat the

[00:12:08] patients more holistically how to optimize their health for surgery so they have better

[00:12:13] outcomes and that's an enduring lesson from the bundles in an enduring way we have orthopedic

[00:12:19] surgeons who are thinking about a whole person here as you just said if their diabetes is

[00:12:25] uncontrolled so just the outcome is not going to be as good and now everybody is on the same team

[00:12:31] making sure that the patient is prepared for the surgery and then gets the right after care

[00:12:37] one of the most interesting things we've learned is that patients who stop smoking

[00:12:41] specifically to get their hip or knee replaced a lot of them don't go back to

[00:12:46] the procedures and so these are the ripple sustainable effects that we've learned what I

[00:12:50] would like to do is to go through a few things that people might find surprising about bundles

[00:12:57] things that they may not realize or or may be a little bit counterintuitive so if we're

[00:13:02] thinking about what is surprising about bundles you mention it and people are like what one of

[00:13:09] the things that comes as a surprise to a lot of people in that 90-day window and this is for the

[00:13:14] cms bpci bundles anything that happens to that patient medically that medicare has to pay for in

[00:13:21] that 90-day window after surgery comes out of the bundle two of my examples of quote-unquote

[00:13:27] losers meaning that we experienced downside risk one patient within 90 days of their procedure

[00:13:32] was diagnosed with a head and neck cancer that obviously needed to be treated that came out of

[00:13:36] the bundle so i was on the hook for that even though it had nothing to do with their surgery

[00:13:41] they did well from their knee replacement i had another patient that had inflammatory arthritis

[00:13:47] they were on a biological infusion like humira or enbrel and we typically skip a dose before

[00:13:54] and after surgery for a month to reduce the risk of infection then the patient goes back on

[00:13:59] that medication month two after the surgery so that's two doses in that 90-day window that

[00:14:04] infusion at seven thousand dollars a pop and that comes out of my pocket fourteen thousand

[00:14:08] dollars out of the bundle because it was paid for by medicare in that 90-day window is this how to

[00:14:13] get the orthopedic surgeon to pay for oncology care or infusions for 400 alex yeah unfortunately

[00:14:20] it seems a bit unfair to put people on the hook for things that are unrelated to the surgery

[00:14:25] so the surprising thing number one is these bundles are all in for all downside risk in the

[00:14:32] next 90 days somebody gets hit by a car or something like that if there's medical care

[00:14:37] the orthopedic surgeon is paying for it even if it's quite clear that it's not that had nothing

[00:14:42] to do with the surgery is what i'm understanding correct for the cms bundles that's correct all

[00:14:47] right so that is surprising what's surprising thing too i think that maybe the second surprising

[00:14:52] thing maybe a cynical take but as much as we talk about value-based care commercial payers

[00:14:58] you could argue that maybe they're a little less incentivized for pursuing bundles or agreeing to

[00:15:03] do bundles with orthopedic surgeons because of medical loss ratio and whether or not that's

[00:15:09] really in line with their typical business model but commercial bundles again as much

[00:15:14] as we talk about value-based care can be difficult not impossible but more difficult

[00:15:19] to get involved with if you're an orthopedic practice surprising thing number two despite a

[00:15:23] lot of talk commercial payers are really not overly interested in doing bundles there are

[00:15:30] pockets where people have been successful but it takes a long time it's hard to get in front

[00:15:36] of the right people it's hard to get engagement i think people might think hey they'd be willing

[00:15:40] to do anything that's value-based but it is a challenge to get into these commercial bundles

[00:15:44] it takes a lot of work to get them to come to the table well i will say that take has

[00:15:50] been corroborated from the employer side i did have a conversation with the leader of a very

[00:15:55] well-respected employer coalition and the employer coalition got a bunch of employers together in a

[00:16:02] particular region so the employers worked out a bundle arrangement that they all agreed to then

[00:16:07] they went to local providers in that same region and brought the providers along so now

[00:16:13] you had the employers and the providers themselves who were like okay we have agreed

[00:16:17] on a bundle that we want to do together the two of them those two stakeholders then went to

[00:16:24] the tpas that were serving these self-insured employers and they said hey we need you to

[00:16:30] administer this bundle that we worked out with our providers and those tpas said no

[00:16:37] nah not going to do it can't do it won't do it then that was the end of the story i think

[00:16:43] what we're going to see as a result of that is the self-insured employer is then going to figure

[00:16:47] out a way to do it themselves if it's not the the commercial payers we are going to see other

[00:16:53] people step into that void to help administer that to help make those connections to help

[00:16:58] collect that data to help the self-insured employer make sure they're pointing their

[00:17:02] employees in the right direction of high quality high value providers i think we're going

[00:17:07] to see that become more commonplace because i think the desire is there on the part of the

[00:17:12] surgeons i think the desire is there on the part of the self-insured employers i think it's

[00:17:16] beneficial for those two parties and if the commercial insurer doesn't want to play ball

[00:17:22] i think that you'll find those other two parties figure out how to work together to

[00:17:26] make it happen yeah i mean it does surprise me a little bit honestly that the fully insured

[00:17:30] plans aren't scoping around for bundles from you just because from everything that you said

[00:17:38] with the improved surgical outcomes as well as the you're on the hook for the next 90 days

[00:17:45] it it feels like something a fully insured payer would be interested in a part of it again is

[00:17:50] the cynical take is that you don't want to get too many different arrangements with too many

[00:17:55] different providers so has it become sort of choppy and fragmented and how do you approach

[00:18:00] practices in order to do that and does it look the same from one practice to the next

[00:18:03] what kind of data do you want or need to see to make that worthwhile is it a big enough

[00:18:09] provider that it makes sense to go through that process the point that you're making is

[00:18:14] you've got this big national player who's offering fully insured plans maybe they spy

[00:18:20] some upside relative to this whole bundle thing but from an uh you know i'm going to use the

[00:18:24] efficiency in air quotes it's very inefficient you have to do all these contracts it's really

[00:18:28] hard to administer so the view ain't worth the climb it sounds like or they just can't

[00:18:32] figure even figure out how to do it from the from an administration standpoint yeah i think

[00:18:36] that's that certainly is a big part of it right i mean that's the one thing about fee for service

[00:18:40] as much as as it has downsides it is clean it's very transactional it's a little bit easier

[00:18:46] to wrap your head around than you know a bundle where there's different moving pieces on

[00:18:50] the other hand as rob andrews said in episode 415 this is their day jobs these payers

[00:18:58] slash third party administrators this is what we're paying these entities to do to figure out how

[00:19:04] to get the best health care for plan members and we all know full-on ffs is a bad scene from a

[00:19:13] actually producing health standpoint so yeah i'm gonna chalk myself up as surprised that not

[00:19:20] being able to pull off something as kind of basic as a bundle i mean there's some value

[00:19:26] based care arrangements that are really complicated but a bundle so not being able to pull off a bundle

[00:19:31] efficiently is a conversation that we're actually having in 2024 all right so we've got two

[00:19:36] surprises about bundles that we've already talked about one is the whole 90 day thing

[00:19:39] the orthopedic surgeon has to pay for everything secondly commercial payers are a little bit

[00:19:45] behind the curve maybe not fans some combination of both is there a third surprise yeah i think

[00:19:53] looking into the future part of what we're going to see is the evolution of bundles or specialty

[00:19:58] value-based care medicare kind of tipped its hand announcing the making care primary program

[00:20:04] last year there's going to be a move to number one try to coordinate specialty and primary care

[00:20:10] a bit better incentivize that but it's curious to me i think some of the expectation maybe

[00:20:15] even some of the concern on the part of orthopedic surgeons is that they're incentivizing

[00:20:20] primary care doctors maybe to do more of the specialty care delivery or take on more of

[00:20:26] specialty type stuff and will incentivize them to do that question is what does that look like

[00:20:32] are primary care doctors going to feel comfortable doing that is there going to be maybe a little

[00:20:37] bit of a battle between primary care doctors and specialists if the bundles become more general

[00:20:42] or more open to everybody if you control a condition specific bundle and the surgical episode

[00:20:47] is nested within that that's going to give more power to direct the bundle to the person

[00:20:53] that's really taking ownership of that okay surprising thing here is that in this new

[00:20:58] condition specific or diagnosis specific bundle model you could actually have primary care taking

[00:21:05] ownership for bundles and then bossing around the orthos who might have a surgery nested in

[00:21:11] the middle of said bundle so it's no longer the msk specialists who are the leader of the

[00:21:18] bundle or the owner of the bundle you're going to have somebody else potentially primary care

[00:21:23] who's the owner and that's different i can certainly see if we're trying to figure out

[00:21:29] areas where there are opportunities to save money considering most of the money is being

[00:21:36] spent in the specialty arena i mean one of the reasons is because primary care is just so woefully

[00:21:41] underfunded trying to figure out how to do more coordination could help reduce the spend having

[00:21:49] primary care do more which isn't like a new idea you want to do what's right for the patient

[00:21:54] if it's hey let's manage this in the primary care setting until becomes time for the patient

[00:21:59] to see the specialist i think that's a good thing certainly more care coordination between

[00:22:03] primary care doctors and specialists is a good thing and figuring out a way to incentivize both

[00:22:09] sides of that equation to work together is also a good thing i think the concern comes in

[00:22:14] of just making sure that the patient is getting the appropriate care i think that will create

[00:22:19] potentially an opportunity for somebody some entity to bridge that gap to make sure the

[00:22:25] right decision is being made the the primary care doctor feels comfortable they are making

[00:22:30] the right decision and then the specialist feels comfortable that the patient is coming to them

[00:22:35] at the appropriate time and not too late so i think there's going to be an opportunity to

[00:22:38] bridge that gap between the specialist and the primary care doctors i think we will see some

[00:22:43] companies start to fill that gap so you're talking about some kind of mso type entity yeah

[00:22:50] either an mso or perhaps some type of a care navigator or care coordinator who has

[00:22:56] some experience and can help make that decision to say yes it's time for the specialist and we

[00:23:02] can point you to high value specialists or you know what you know maybe you haven't tried this

[00:23:07] maybe it's not time for imaging yet and so you can continue to manage this in the primary

[00:23:12] care setting will help you to do that so that the patient is still getting good care but it's

[00:23:16] not quite time to see the specialist i'm of a couple of minds as i'm listening to you you

[00:23:22] talk there on the one hand i'm like there are entities right now that are kind of in that space

[00:23:29] for example you've got the virtual consult gang so a primary care doctor can get a hold of a

[00:23:34] specialist and ask that specialist questions as opposed to doing a full-on referral and as you

[00:23:39] were talking about navigators obviously there's a plethora of them there are entities that are

[00:23:44] already in the mix there on the other hand i would hate to see specialists in primary care

[00:23:50] disintermediated from working together when there's just such an opportunity just to work together

[00:23:55] right first of all like we're just talking about knee pain there are some shocking percentage of

[00:24:00] patients who go to their primary care doctor for musculoskeletal pain i was reading a study

[00:24:05] just how little musculoskeletal training primary care doctors tend to get in fact if

[00:24:11] you read dreamland or any of those books about the opioid crisis one of the reasons for the

[00:24:16] opioid crisis according to some is that primary care doctors felt really pretty powerless in the

[00:24:23] face of patient pain so when you know opioids showed up they were like sure and started

[00:24:28] prescribing them because they didn't know anything else to do amongst a whole bunch

[00:24:33] of other factors i totally agree with you i think the disintermediation point is very

[00:24:38] valid and the ideal situation is let's bring specialist and primary care doctors together

[00:24:45] let's not pit them against one another right can we design some type of bundled payment program

[00:24:51] capitation program where we really get primary care doctors and specialists working together

[00:24:57] you're right that at least in my medical school unless you really saw it out musculoskeletal

[00:25:03] education we got like two lectures on musculoskeletal topics in medical school and

[00:25:09] the training isn't necessarily there later on as well in residency so you don't want to put

[00:25:15] primary care doctors in a situation where they're sort of incentivized not to refer

[00:25:19] to the specialist but at the same time they want to feel like they're doing the right

[00:25:22] thing for the patient and that can lead to you know overtreatment under treatment

[00:25:27] over imaging under imaging wrong imaging so i think the ideal is to develop a program that

[00:25:35] coordinates those two things and has them incentivized to do the right thing together

[00:25:40] i think one of the concerns about these navigators or these entities that exist that

[00:25:45] you've mentioned is unfortunately a lot of them their value proposition seems to be hey let's

[00:25:50] keep that patient away from the specialist because that's where the cost really lies and

[00:25:55] that's okay if it's appropriate but making sure that the patient does see the specialist

[00:26:00] when it is necessary is number one and number two making sure that the primary care side of

[00:26:05] the equation has resources that they feel comfortable hey i'm doing the right thing

[00:26:10] for the patient or i have a resource i can go to if i'm not sure that maybe isn't referring

[00:26:16] completely to the specialist but is making sure that i'm on the right track that i'm

[00:26:20] not missing something that i'm not delaying care that i'm not doing the wrong things

[00:26:26] and that's a lovely promise right and i mean that full-throatedly that one of the things

[00:26:33] we've been striving for is to get primary care and specialists working together obviously

[00:26:38] the whole lack of data could be a factor here there was recently a hospitality newsletter about

[00:26:44] this just that primary care doesn't have the data a lot of times to know who the

[00:26:49] specialists are that are performing the best but the promise is very interesting and it seems like

[00:26:55] it could be a way forward for sure all right so that was our third surprising thing about

[00:27:00] bundles dr ben schwarz is there a fourth yeah tangentially related to the bundles is the

[00:27:05] concept of centers of excellence those have become also very commonplace a lot of promise

[00:27:11] there was a pretty landmark hbr article written several years ago about walmart's experience

[00:27:17] the coe program i think if you dig into that and you parse it a little bit the centers of

[00:27:22] excellence don't necessarily save money sort of on the cost of the procedure they can be as

[00:27:29] expensive if not more expensive in some cases for the procedure itself i think the value is

[00:27:34] driven there by surgical avoidance so you get sent to the center of excellence and the physician

[00:27:39] at the center of excellence says i don't agree with the community surgeon you don't need a

[00:27:43] hundred thousand dollar back fusion and then that's your employer obviously saves money in

[00:27:47] an avoided procedure and there is potentially some value to that but unfortunately there's a

[00:27:52] lot of gray areas and one person's opinion may be different than somebody else's opinion

[00:27:57] and how do you decide whose opinion is correct so i think the coe model is interesting but

[00:28:03] it's really kind of more that decision for against surgery is not necessarily that their

[00:28:08] outcomes are any better it's not necessarily the cost is any less it's more that

[00:28:12] you're getting maybe a differing opinion that says hey i don't think this procedure is indicated

[00:28:17] that this person in the community is describing and then that person in the community that

[00:28:21] maybe has had a relationship with that patient for years has to then deal with that patient

[00:28:26] who was sent to the center of excellence by their employer the employer says look the

[00:28:31] center of excellence said you don't need that procedure i think people assume the coe is cost

[00:28:36] controlled for the procedure when oftentimes it's not any cheaper than having the procedure

[00:28:40] done in the community probably less care variation at the center of excellence but i think most

[00:28:45] communities have good high quality high value surgeons if you're willing to take the effort

[00:28:50] to find them okay there's a couple of things i find really interesting about what you just

[00:28:55] said and the first one is and just never really thought about it before honestly but

[00:28:59] just pointing this out we've had peter hayes on the show talking about just the high prices

[00:29:04] of hospital services right hospital prices are very high i just never really thought about that

[00:29:10] if we're talking about a center of excellence which tends to be an academic medical center

[00:29:14] which tends to be a hospital you know hospital system so the prices are very high the reason

[00:29:19] why those programs are cost effective or reduce costs isn't because the cost of the procedure is

[00:29:27] any less it's because there are less surgeries in a lot of cases i think the employer and the

[00:29:34] center of excellence do tend to negotiate for their own bundle price but even then

[00:29:39] it's not necessarily less expensive than if you went to you know community facility to have your

[00:29:44] surgery or let's say a surgery center which is going to be even less expensive than having

[00:29:49] it done at the coe you look at the sage transparency project or you look at any

[00:29:53] of these things it's very clear that commercial rates are quite high and the center of excellence

[00:29:58] model you're still going to those same exact entities that are charging a lot of money

[00:30:03] i mean there's some upsides here one of them is a lot of the center of excellence programs

[00:30:08] do require very meticulous data tracking such a small percentage of provider organizations

[00:30:15] and or clinics measure outcomes of any kind clinical or proms patient reported outcome

[00:30:22] measures i think that's the main question here i mean how do clinicians even know if what they're

[00:30:27] doing is amazing or not amazing dr steve schutzer talked a lot about this in encore

[00:30:32] episode 294 if somebody really wants to dig in but if i'm an employer using a center of

[00:30:37] excellence model the requirements to track a lot of different data elements could really be

[00:30:42] helpful and potentially worth it and valuable in and of themselves so there's definitely some

[00:30:48] upsides here however the cost of the procedures themselves are still as you just said on the

[00:30:53] high side but then the other issue to kind of keep in mind is um it certainly is a second

[00:30:58] opinion right and as anyone would tell you whenever before anybody gets any surgery you

[00:31:04] should definitely go get a second opinion but because that second opinion and the surgery may

[00:31:08] be happening outside of the patient's local community and outside of that patient's local

[00:31:14] ability to go get physical therapy or go get right like they're gonna have to get after

[00:31:18] care within the community there may be a disruption of care continuity and if they need

[00:31:25] care then in the community that is certainly something that anybody with a center of

[00:31:29] excellence network should be keeping in mind there's a lot of things there that you mentioned

[00:31:34] number one is for sure i mean it's not fair to throw shade at coes if you don't come with

[00:31:39] your own data so if you want to keep those patients locally and you say we do just as

[00:31:43] good a job then we can do it maybe more cost effectively you have to bring the data that's

[00:31:47] only fair and you have to prove it so i think that's point number one number two is

[00:31:52] in my mind the best thing for the patient is to whenever possible keep them in the

[00:31:57] community as opposed to something that's that could be very transactional they're meeting that

[00:32:01] person for the first time at the coe maybe they're having their surgery and they're going

[00:32:05] back to the community and now it's up to the community if that patient shows up in the er with

[00:32:09] a complication the coe maybe tries to take care of the complications as much as they can but the

[00:32:14] patient's not going to travel hundreds or thousands of miles away when they have a

[00:32:17] complication right they're going to go to the local er i think some of these programs come

[00:32:21] up with agreements with primary care doctors to do some of the post-operative care which may

[00:32:25] not be the best situation either the patient goes back in the community if they've had a

[00:32:30] procedure to having an issue or if they go back to the community and they've been told to the coe

[00:32:35] look i don't agree with this surgery now what do i as a community provider who maybe has been

[00:32:40] treating that patient for a long time now where do we go from there how do i reconcile

[00:32:44] that now i have this patient that's been turned away from a coe their employer is telling

[00:32:49] them that they're not going to cover the cost of care that that makes for some difficult

[00:32:53] conversations and we don't have as far as i know good data on the outcomes what happens to patients

[00:32:58] that go to a coe and are told that they don't need a certain treatment and end up back in

[00:33:03] the community what's their ultimate outcome do they end up with surgery in the community

[00:33:06] do they do okay do they not do okay they not end up with surgery do they end up with another

[00:33:10] treatment do they eventually get better that data we really don't have like so many things it's

[00:33:15] not like any given idea is good or bad it's a lot of it has to do with devils and details

[00:33:22] and the execution really matters here it would be up to any employer or plan sponsor who's thinking

[00:33:31] about getting a coe model to really think through some of the executional elements here

[00:33:36] as with so many things and listen to the show with al lewis 331 for a deep dive into this

[00:33:43] also the show with kora opsal this comes up it's up to the plan sponsor to take a broad view

[00:33:48] on the actual impact of the program because as you just mentioned if the coe the center of

[00:33:54] excellence program vendor is only measuring the impact and cost savings or roi on the patients

[00:33:59] who got operated on and then the patients who didn't get operated on are tallied up as

[00:34:04] zero dollars and no further costs are considered that's not going to be accurate a lot of things

[00:34:10] about the concept of a center of excellence model makes sense and you're right it's all

[00:34:13] about the execution i don't think you necessarily have to send patients hundreds or thousands of

[00:34:18] miles away from their community that may take some work and again it's incumbent upon us in the

[00:34:22] community to you know come with our data and prove that we're doing good work whether it's

[00:34:26] at our practices a surgery center or local hospital but i think the concept of this coe

[00:34:32] can be local one thing that i have heard more than once also from employers is this whole

[00:34:38] idea of efficiency and it's very inefficient to have lots of regional contracts right so you've

[00:34:45] got a national workforce you've got a couple of patients in all these different markets it's

[00:34:50] a lot easier to set up a coe network where everybody flies to a limited number of centers

[00:34:58] of excellence as opposed to having lots and lots of local relationships

[00:35:03] so you can definitely kind of see why this winds up happening you know you think about

[00:35:07] value-based care you kind of have to understand who the quality provider organizations are within

[00:35:14] any local market you can't just keep flying people around for everything right so as the

[00:35:20] data maybe quality data becomes more ubiquitous it becomes more possible to do some of the

[00:35:26] stuff that we're talking about within the local community i think there is an opportunity

[00:35:30] sort of on a national level for high quality high value providers centers that aren't

[00:35:36] necessarily traditional centers of excellence academic medical centers as we think of them

[00:35:40] two band together and say you know as a group as this network regional nationwide network

[00:35:46] we're going to follow similar protocols we're going to report our outcomes to you

[00:35:51] we're going to have our own vetted providers and vetted centers almost like a franchise

[00:35:58] model or under some umbrella where we've all kind of agreed to adhere to these standards

[00:36:03] and report our data you know we're in our own local markets but we're sort of under the same

[00:36:08] national umbrella that we can approach self-insured employers and you know that if you go to one of

[00:36:13] the providers that's in this self-curated network that you're going to get good quality

[00:36:17] care because you have the data as it's reported to you so surprises that we have discussed here

[00:36:22] is this whole 90 day thing that everything falls on the shoulders of the orthopedic surgeon

[00:36:27] to pay for regardless of whether it's associated with the surgery or not number two commercial

[00:36:33] payers not a huge fan of bundles actually turns out number three this move to coordinate with

[00:36:39] pcps and specialists and we talked through some of the interesting nuances there and then lastly

[00:36:47] here we talked about coes centers of of excellence the center of excellence models

[00:36:52] not a magic bullet not that anyone thought there was but there is some interesting

[00:36:56] implications here especially as it relates to taking the patient out of the community

[00:37:01] dr ben schwarz is there anything i neglected to ask you that you think we should cover here

[00:37:07] i think look there's opportunity here we've learned some important lessons i think we'll

[00:37:11] continue to learn and evolve i think in the future it's going to be mandatory and

[00:37:16] not voluntary as we've seen before the bundle so i think it's incumbent upon those

[00:37:20] of us particularly at msk particularly hyponere arthritis and back pain where a lot of the spend

[00:37:25] is to understand this to try to get a seat at the table to try to be proactive in having

[00:37:31] these conversations hopefully on the other side of the equation the government cms cmmi

[00:37:37] self-insured employers commercial insurance plans are willing to come to the table with

[00:37:42] us and work with us to collaborate on these programs because i think that's really where

[00:37:47] we're going to see the most sustainability there's been some fits and starts we haven't

[00:37:52] yet hit on the right formula for sustained success i think really the only way we're

[00:37:56] going to do that is is to have everybody coming together and making sure that everybody

[00:38:00] is pulling in the right direction that's a great inspirational message there's

[00:38:05] a collaborative opportunity here so patients can get better care at an affordable price

[00:38:10] and everybody's knowledge is required to make that happen orthopedic surgeons i think are known

[00:38:15] for being entrepreneurial and seeking out their own solutions and i think we are seeing pockets

[00:38:21] of that where you know if you can't get traditional people to come to the table then

[00:38:26] you'll figure out ways yourself to try to make it work and so there's a lot of i think exciting

[00:38:30] work being done to that end by people who really understand this and understand where

[00:38:35] things are going and are really trying to help create that future for sure and it's

[00:38:39] going to take people who really understand the nuances here and really understand what's

[00:38:42] going on in order to actually create a future that's going to work dr ben schwartz where can

[00:38:46] people find your blog yeah so the blog is them dry bones on sub stack there's a link to it

[00:38:52] on my linkedin page benjamin schwartz md i'm happy to connect with anyone dr ben schwartz

[00:38:59] thank you so much for being on relentless health value today yeah thank you stacy my

[00:39:03] pleasure so let's talk about going over to our website and typing your email address in

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