In the old fee-for-service system, surgeons were paid to perform poorly. Even incentivized to do so. Think about it. If surgeons had to readmit a patient to the hospital because of, let's say, a site infection, severe pain or a failed surgery, they'd submit a bill to the payer and get reimbursed. No questions asked. A complication could lead to multiple reimbursable surgeries. But the days of How much can we be reimbursed? are long gone, replaced by value-based programs like bundled payments that ask How much can we save?

Better outcomes at lower costs. That's the mantra of the orthopedic bundled payment model. By their nature, bundles reward high-quality work at a much lower cost and encourage us to take exceptional care of our patients. But when patients hear "bundle," for some reason they think they're getting a no-frills, bargain-basement joint replacement. In actuality, of course, they're getting our very best care because we, the providers, not the payers, are assuming all the clinical and financial risk of surgery that payers traditionally managed.

The most common type of bundle is the prospective bundle, so named because you prospectively assume that, if all goes according to plan and there are no complications, x is the cost for the payer and y is the cost for each individual component of care. To succeed with a prospective bundle, you must eliminate waste and reduce unnecessary spending by closely managing the patient and standardizing care.

The math is 3rd-grade simple: Providers who cut healthcare costs and meet quality metrics might share in the savings, whereas providers who go over budget or do not meet quality metrics might see a financial loss on care episodes. But it's not just addition and subtraction between payer and provider. It's a continuum of care involving payer, provider and patient, as well as the hospital or surgery center, rehab, durable medical equipment (DME) suppliers and all others involved in the patient's care in ways small and not so small.

Save a bundle

I oversee the commercial and Medicare bundled payment programs for OrthoCarolina, a 150-surgeon multispecialty orthopedic group. OrthoCarolina negotiates bundles with payers and then essentially subcontracts out the ancillary care for an agreed-upon, fixed price to the surgical facility (surgical center or hospital, which also pays for the implant), anesthesia group, radiology group, DME and physical therapy. We pay each of these parties out of our bundled payment. Everybody's on the hook to provide the services for what would be considered a normal course of care.

The surgical facility receives the largest portion of the bundle, followed by our physicians group, anesthesia, radiology, rehabilitation and DME. Nobody's getting rich over this, but nobody can go poor either. We're trying to get the billing and the payments equal to the service provided so that everyone's incentives are aligned. Note that in the case of an unforeseen surgical-related complication, such as a surgical site infection, fracture or wound complication, OrthoCarolina, not the surgical facility, absorbs the cost.

We get calls every week from facilities looking for pointers to succeed with bundled payments. I tell them what I'm about to tell you.

1. Assign each patient a care navigator.

From the moment we bring patients into our program, we assign them a care navigator, a personal travel agent of sorts who serves as the single point of contact for the patient throughout the care episode. Our navigators assist the patient every step of the way and keep a close eye on costs as well as care. When you consider that bundled payment providers are responsible for care up to 90 days post-discharge, you can see why patient engagement is key to curbing unnecessary costs, like a dash to the ER for swelling or pain.

Care navigators provide patients with a handbook that details the care episode and key specifics about surgery. Our clinically trained navigators take care of patients from start to finish. They help them fill out paperwork, make appointments and even attend their post-op checkups.

If patients experience swelling or pain at home, they don't go to the ER, they call the navigator, who reaches out to the surgical team to expedite matters, so the patient is not waiting hours on end for a return phone call from a nurse.

We own and operate 7 orthopedic urgent care centers in and around Charlotte, N.C. They're open 7 days a week. To avoid a costly trip to the ER, our navigators sometimes direct patients to one of our urgent care centers to evaluate swelling or redness.

Don't underestimate what a terrific patient satisfier bundled payments can be. Our bundled patients never have to present their insurance card or pore over an explanation of benefits. Because the agreement is between the payer and the provider, the patient is freed from such details.

2. Be faithful to your surgical care plan.

Surgeon variability and freelancing are the enemies of bundled payments. If a surgeon deviates from the written pre-op, intraop and post-op care plans you've agreed to with your facilities and that minimize variabilities and increase efficiencies, your ASC or hospital likely will incur costs to which it did not agree. If a surgeon requests to do something different than what's in the care plan, that's fine as long as it doesn't add costs to the facility. You are the owner and keeper of the bundle. As such, you bear its financial risk. You can't have surgeons performing procedures that deviate from the gold standard to which you've agreed. Once those order sets are complete, surgeons must sign off on them and follow the guidelines.

3. Prune what you don't need.

For many years, orthopedic practices prescribed continuous passive motion (CPM) machines for post-op patients. CPMs cradle the leg and take patients through the range of motion while they're lying in bed or on the sofa. Well, guess what? Years ago a study found that CPM didn't improve total knee patients' range of motion. So we eliminated CPMs. from our value. It was an added expense that added no value. Similarly, we used to prescribe our patients continuous ice machines that pumped cold water over their joints. When we found these were no more effective than a bag of frozen peas, we switched to ice packs.

Our average length of stay for total joint replacement is shockingly low: 1.16 days. Our patients don't need home health care, nor do they need inpatient rehab or physical therapy.

Emerging reimbursement model

If you're not prepared, now's the time to plan to move to bundled payments for an episode of orthopedic care. The time is now to raise quality while decreasing costs. OSM