From AAHKS 2016 – CODE had the honor sit down with Dr. Kevin Bozic, Professor and Chair, Dept. of Surgery and Perioperative Care, Dell Medical School at the University of Texas at Austin. The fully transcribed interview is included below.

Dr. Brian Cunningham: Brian Cunningham here with Dr. Kevin Bozic now at UT Dell, formerly UCSF, one of the real thought leaders in joint replacement, medical policy, the transformation of health care. We’re here to ask him a couple of questions following one of the sessions at the annual AAHKS meeting. I think one of the hot topics was transition in health care. What are the baseline thoughts for someone who hasn’t ever really tried to collect patient-reported outcomes?

Dr. Kevin Bozic: It’s interesting. We’re in a business where the primary outcome that we care about and our patient care about are pain and functional status, and yet a very small percentage of orthopedic practices actually measure pain and functional status in any validated way. I think most of us think that we do that intuitively through our conversations with our patients, through our history. When we actually measure physical health, emotional health, functional status pain, it’s often very, very surprising in terms of how our patients really feel about their condition and the care that they’re trying to receive. I think that the most important step in understanding how that data is important is actually using in clinical practice. If it’s measured as another thing that we’re measuring that’s an extra burden for patients or providers it’s rarely used, and the compliance is extremely low.

We had experience in California with starting the California Joint Replacement Registry. We had variation from 0% to 98% of patients that were reporting this information depending on the practice. We found out that the practices that we’re doing at a higher level were actually incorporating into their decision-making. In my practice I collect that information. I sit down with the patient, I show it to them and say, “This is what you’re telling me about your health, about your physical health and about your emotional health.” Based on that information here’s some options that we might try. I’m always surprised that patients say to me, “Where did you get that information?” I say, “I got it from you. This is that stupid survey you filled out when you came in that you were angry at us about.” I think that the key is actually using that information in clinical decision-making for both patients and providers. There’s very few places that are doing that or doing it well. Until that information is started to use in clinical practice I think we’ll see relatively low compliance with collecting that information.

Cunningham: As far as practices getting up and running, trying to collect this information, I think, has been a challenge nationally, regionally, within practices. I know you published on this topic whether it’s electronic, whether it’s in office, different ways to do it. Do you have advice on an infrastructure or way to go about it, if you’re a practice that’s trying to transition towards collecting patient-reported outcomes?

Bozic: I think this is something we’ve looked at a lot within the AEOS. We’ve actually recently started an initiative within the AEOS to number one, streamline which measures that should be collected for which types of conditions and practices, so that we have common benchmarks. If I’m collecting one thing, and you’re collecting something else, it’s hard for me to understand how I compare or how much patients compare. The other is baking it into the workflow is the simplest way to put it. Again, if it’s seen as an extra, this goes back to my last answer. If this is seen as something extra that’s not necessary to deliver care … If patients believe that checking their range of motion and watching them walk, they can understand why that is critical for me to be able … or getting an x-ray. Looking at an x-ray, none of us would think about walking into the room and treating the patient for arthritis without having an x-ray to look at.

Unless it’s seen as just as critical as the x-ray, it’s unlikely. It has to be built in just like you’re now going to x-ray, you’re now going to get this survey that you fill out. You can certainly do that electronically although we found that even with the best, and the most sophisticated and army of people hounding them, you might get to 50% of patients that you can get that information from ahead of time. Otherwise, we do it in the office. You can have a medical assistant or somebody on the team that that’s part of their job. They’re already giving out the intake questionnaire. You can’t make it by the way we have this research thing we’re doing. It’s just like part of collecting all the other information that you need and getting the x-ray that you need to take care of that patient.

Cunningham: That’s a great point. I think one of the highlights for me in this session was Dr. Bozic talking about you wouldn’t think twice about investing in revenue cycle management tools or business intelligence, and yet I think there’s a big resistance to making an investment to work on collecting some of this outcome data.

Bozic: I think that’s because again it has not been required for payment. It has not been seen as a tool that can help you competitively in your practice, whereas, revenue cycle management is. Now that we’re moving to an era where we’re actually being measured and compared and paid based on outcomes, I think this industry is really about to take off.

Cunningham: That’s fascinating. One of the other topics that came up multiple times was the idea of the intersection between politics and medicine and eventually policy. There was some allusions to the fact that the new administration may actually speed or may actually influence the marketplace to a more competitive situation. Is that something that you agree with?

Bozic: I think probably that comment came from me in the session in that if you look at … First of all, it’s important to understand that what government policy is not necessarily what dictates practice and what dictates the trend in health care spending and accessibility of health care. The government does some things to try to right now at least address the growing cost or increase in health care inflation and the ability to provide care to more patients. If you look at the Affordable Care Act, there are several aspects of the Affordable Care Act. One is an insurance exchange which is meant to provide more coverage for more patients. The other is innovation around how to get more bang for your buck. That whole innovation piece, a lot of that came from the Republican side of the House and Senate. That type of competition that people are hoping to see that is baked into the Affordable Care Act, I think that that will grow and blossom.

The basic difference is between a Democratic and a Republican administration is Democratic administration believes that you want more entitlement programs, not burden the consumer with the cost and/or make care accessible and affordable to patients. On the Republican side, Republicans want to make care affordable and accessible, but they believe that you can do that through market-based competition as opposed through government subsidies and entitlements. I think on the market-based competition and value-based competition side we’re going to see an increase in that in the next administration will be my prediction.

Cunningham: It’s interesting. We talk a lot about cost because I think it’s one of those things that we have grown up as surgeons and is intuitive because it’s captured. The data is there, it’s measurable. Administrators have always gravitated towards it. I know recently, it’s not a new concept, but you certainly brought attention to it in the medical field of the idea of time-based or time-driven activity-based costing as a different way to evaluate the cost of a procedure or an episode of care. Can you talk a little bit about that?

Bozic: As we move into the transition to value that understanding your costs and understanding your outcomes are critical, as they are in most other industries that compete based on value. The way that we’ve historically measured costs in health care is through an allocation process where we say, “We’ve got this big building, and we’ve got this many surgeons attending the conference. Therefore, if we divide that up and assign a certain amount of cost to each physician, then we understand the cost per physician of attending this conference.” It turns out that I may be consuming more resources. I’m the one asking for the iced tea. I’m the one going to the gym, I’m going to every session. I’m on the internet. Unless we’re actually measuring what’s being used, it’s very hard to understand cost. When I think about time-driven, activity-based costing, I think of it more as a management tool than a finance tool where we’ve used it in our practices to understand what the cost of delivering that 90-day episode of care is, and therefore where the nonvalue-added steps and where the opportunity is to eliminate waste and inefficiency.

The reason why hospital administrators and many traditional health system CFOs get nervous about it is what happens to all those unattributed costs and who’s going to pay for all that? I don’t like to scare them by saying, “Indirect costs and unattributed costs are somebody’s else’s problem.” I’m saying, “We’re using this methodology, so that we can understand the actual cost of delivering that care.” Then we can use that to refine our processes and improve value. Eventually, hopefully, we’ll be sophisticated enough to use it for our finance systems, so that we can calculate margins, and we can use that for gain-sharing and other purposes. Right now we’re using it as management tool to identify where the inappropriate, and excess and nonvalue-added steps in care are.

Cunningham: In a simplified form, do you think it’s a starting place to evaluate cost as implant, length of stay? You just add those up, and then you divide whatever your outcome gets, or do you think that’s too simplistic at this stage?

Bozic: If you were taking a time-driven, activity-based costing approach you would add up the resources that are used, the amount of physician time, nursing time, anesthetist time, physical therapist time and actually at whatever rate they’re … We understand what that resource costs, and we can calculate what the resource costs per minute. We can actually measure how much of that resource is being used in the care of that patient. The time that they’re sitting down and doing other things that aren’t related, if it’s charting or something like that, then that’s part of the cost that’s attributed to that episode. If it’s doing something else, we don’t want to include that in the cost because then we understand we have a nurse that we’re paying for a 12-hour shift, and we’re getting four to six hours of direct patient contact out of that. Why is that? Maybe we need to make the systems more efficient around them, so that they can spend more time in direct patient contact. That’s how it’s useful as a management tool.

Cunningham: That makes sense, essentially identifying areas for improvement, or to increase the value that aren’t currently being utilized, or how to better utilize resources and tracking the flow of a patient through the episode of care.

Bozic: Yeah, and understand where you have excess capacity. If you have a 12-hour nurse that’s doing four to six hours of direct patient care, that’s excess capacity that we can apply to something else.

Cunningham: Fascinating. One more question here while we have Dr. Bozic. It seems like the total joint world and arthroplasty is creeping towards is creeping towards the forefront of value-based care, at least in orthopedics. How do you imagine this movement trickling down into the sports community, or the trauma community or the hand community where you’re looking at things that aren’t maybe as commoditizable as joint replacement?

Bozic: Good question. The concepts of trying to improve value are ubiquitous and apply to not just health care but everything beyond that. If you look within health care, the easiest place to start is something that you do repetitiously in a relatively homogeneous population. That’s why joint replacement is a low-hanging fruit because we do a high volume, and the population is relatively homogeneous although there is some variability. In those other disciplines you would simply … The low-hanging fruit and the way to dip your toe in the water is to figure out a condition, preferably, not just a procedure but a condition that you treat commonly like ACL rupture or hip fracture and something that you would say, “We’re going to look at …”

The investment in setting up the infrastructure to measure costs and outcomes has to be justified by the volume of patients that you treat with that condition. If you’re doing it for something rare, it’s harder to justify that cost. You’re not going to have a large enough sample size to draw meaningful conclusions. You want to start in a place where you have a high enough volume with relatively homogeneous types of patients, so that you can start to understand your costs and outcomes, use that to improve and then apply that to other conditions and procedures.

Cunningham: Fantastic. Guys, that Dr. Kevin Bozic, one of the really bright minds in medicine and policy at this point. Thanks for tuning in. We’ll have more from AAHKS in the next few hours.

Kevin: Thank you.

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Ellen Laux

Ellen Laux

Ellen is a design and marketing veteran and lives on the marketing team at CODE. She's focusing on helping surgeons and hospitals understand and LOVE PROs.