Bundled Payments & the Physician's Role in Cost Containment

Aug 09, 2016 at 03:40 pm by Staff

Dr. Steve Salyers consults with a nurse.

Editor's Note: Dr. Steve Salyers, MD, a partner with Premier Orthopaedics and Sports Medicine, recently sat down with Nashville Medical News to share his thoughts on bundled payments and the move to new reimbursement models.

Steve Salyers, MD, who sees patients in the TriStar Skyline Care Center of Premier Orthopaedics and Sports Medicine, is calling on colleagues to step up and take a leadership role as America transitions to new payment models.

"The economics of care for the Medicare population is unsustainable," he stated. "It's not morals or ethics or medicine. It's just simple math. There is not enough money in the Medicare system to care for the baby boomers."

In fact, the Congressional Budget Office projects net Medicare spending to rise from $591 billion in 2016 to $1.1 trillion in 2026. Therefore, Salyers continued, "Like it or not, we must control costs."

The board certified orthopaedic surgeon said neither the capitated payments of the 90s or cutting reimbursement rates has had the desired effect.

"In inflation adjusted dollars, the surgeon's fee paid by Medicare for total joints has been cut by over 80 percent since the 1980s," he stated. However, he continued, "Cutting physician fees hasn't solved the problem. Of the total Medicare spend, 8-10 percent goes to the physicians. You could pay the doctor nothing and only save 10 percent of costs."1

Salyers continued, "Back in the 90s with capitated payment, you got a flat fee no matter what you did. The way you made more money was to do less stuff. It was a denial model, and it didn't work."

However, Salyers thinks bundled payments might be a viable solution. "I'm not rewarded by providing less care. I'm rewarded for right-sizing care," he said. "Forty to 50 percent of the Medicare spend for total joints is after the patient leaves the hospital. Nobody has been controlling or monitoring the post-acute care spending. The bundled payment initiative is to allow the surgeon to try to control those expenditures."

He added, "One day in rehab costs more than what physicians get for pre-op evaluation, surgery, and 90 days post care." Salyers said that doesn't mean a patient shouldn't go to a rehab or skilled nursing facility but that the decision to do so should be individualized rather than automatic. "You can't confuse easy or comfortable with medically necessary."

Often, he noted, patients don't want to be discharged to their home following a total joint replacement. "They want to go to a nursing home, but what they're really saying is, 'I'm afraid.'"

To that end, Salyers said, "We must address patients' concerns and fears proactively." He noted Premier has a bundled care coordinator who he said does a great job at drilling down to the root cause of worry after discharge.

"Staying at your daughter's house and afraid you'll fall while she's gone all day at work? We can put a sitter in your home for two weeks, but I'll bet you send them on their way in five days," Salyers said of a typical conversation about finding safe, but more economical, solutions to care.

He also said a more aggressive approach is needed on the front end to get patients ready for surgery - from home evaluations to conversations about the patient's role in improving outcomes and controlling costs. "Patients are going to have to take more responsibility," he said. "Prescribe two weeks of antibiotics for an active infection such as cellulitis of the operative limb before surgery, no one bats an eye. It's good medicine. But tell someone they need to get 10 pounds off before joint replacement, and folks get upset. That's equally good medicine and equally as important."

While bundled payments and other value-based reimbursement models might not be the definitive answer to controlling costs, Salyers said the incentives to right-size care across the entire continuum feel like a positive step. "Controlling healthcare costs has been looked at by a lot of smart people for a really long time, and no one's come up with a perfect solution so I don't know ..." he mused. "But I do know cost control can't be someone else's problem.

"If physicians abdicate their role in containing healthcare costs, someone else will take it on, and I guarantee you it won't be as thoughtful, compassionate and patient-centric as if the physician was doing it," he concluded.

Footnote: 1 According to the Kaiser Family Foundation's "The Facts on Medicare Spending and Financing," physician payments accounted for 11 percent of Medicare benefit payments in 2015.


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