Rothman Orthopaedic Institute established in 1970, is a world leader in the field of Orthopaedics. The base of the success and an unwavering commitment to quality of Rothman Orthopaedic Institute is on two (2) things – improving the patients’ lives and making patients satisfied with the service and care.

As the healthcare industry continues its move from a volume-based system to value-based care, Rothman has established and maintained a leadership position. For years, they have collected, studied and published their outcomes. They invest millions of dollars per year into research. They continuously ask patients how they are performing and whether the patients are satisfied with the care they receive. Rothman uses data to objectively measure everything from post-surgical infections to patient satisfaction. This collection of facts allows Rothman to identify problems early, make corrections and improve care. Rothman is committed to the data-centric approach.

CODE Technology had the pleasure of interviewing President and Surgeon-in-Chief of Rothman Orthopaedic Institute, Dr. Alexander R. Vaccaro, MD, PhD, at the 4th Interdisciplinary Conference on Orthopedic Value-Based Care 2020 (OVBC 2020) organized by American College of Preventive Medicine (ACPM) and Dr. Zeev N. Kain, MD. MBA. MA (hon). The incredible insights he shared were amazing and mind-blowing. This blog will highlight key takeaways on the data-centric approach of Rothman Orthopaedic Institute and the price transparency in the healthcare industry.

Dr. Vaccaro on Price Transparency in the Healthcare Industry, “Transparency is where it begins. Understanding what your costs are, which brings up another interesting concept, Time-Driven Cost Accounting – where you look at the transactional nature of what something costs. You look at the personnel involved and you tag everybody that gets involved with a patient from the person who parks the car, the nurse who greets you at the front desk, the resident who does the history and physical, the doctor that comes and speaks to you. You look at what their salary is, what does that transaction costs, and then you look at what the actual product delivered costs and finally you have an understanding of what it costs to deliver care. We applied those principles to the cost of care in spine surgery. I found out exactly how much it costs to do an anterior cervical decompression and fusion. I found out how much it cost to do a lumbar decompression. It was interesting to know the actual cost and the cost of care. So I finally figured it out once I knew my true cost, which you as a consumer do not have the knowledge base yet because it’s not being supplied. But with President Trump’s new executive order that by January of 2021, you have to post what an episode of care will cost. It may not get into the granularity of an implant or a suture or an IV bag, but you can plug in your insurance, it’ll say this is what you have, this is what your cost will be, this will be your out-of-pocket costs. Then you can take that information, go to another facility, type it in and compare. Then you say, “Oh, this is less expensive. Let me look at the reviews and social media. Let me look at the outcome measures published. Is this quality care provided at this institution? And if so, you can then shop your care route?” So that’s the future.”

So it’s interesting as a consumer, but as a surgeon, do you feel that most surgeons understand that cost?

Dr. Vaccaro, “The average orthopaedic surgeon doesn’t know it, they rely on the administrators at their hospital. We’ve been applying these principles to all the hospitals we work at and we get together with the administrators. Now the administrators know at the end of the day how much their expenses are, how much their revenues are and how much they pay people.  If they made a margin or not, they know that. But if they really want to be efficient and maximize the income that they can make, an income that’s respectable and affordable, they have to implement those processes. We did it in joint arthroplasty and spine. We’re starting to do it in the shoulder, elbow, hand, foot and ankle.”

How are you sharing the data with the surgeons and what has been the impact of that?

Dr. Vaccaro, “Price transparency is the only way to bend the cost curve. So the Government is now allowing it and the Department of Justice is now allowing certain types of gainsharing plans to go forward. So if it bends the cost curve and quality is not sacrificed, then the Government will look at that and say, “Listen, we’ll allow that information to be shared.” So I think that’s a good thing. You have to just protect the competition because theoretically, competition of free markets brings the cost down so it’s important for people to know what the true costs are.”

You guys have 53 bundles going on at Rothman right now, we’d love to hear pearls and perils of participating in bundles and any advice that you have for people that are just starting that process.

Dr. Vaccaro, “There are several things you have to do with a bundle. Number one, you have to look at how the Government reimburses on a bundle. They look at certain CPT codes, certain DRG codes. DRG codes are very inefficient because in spinal fusion, you get paid for a single level fusion the same amount you may get paid for a multilevel fusion. So the first thing I say with a bundle is understand your costs. We break it down on CPT codes, not DRG. Then make sure you have an adequate population of patients because if you have a small population of patients, if you have an outlier that costs too much money, you’re going to lose on the bundles. Then you’ve got to get a team together. Then you’ve got to get data analytics because you have to collect the data and then once you put it all together, you have to get what we call a navigator. You now know what it costs to provide care. Now we have a patient that comes into the office. You want that patient to have a seamless experience, so you have to optimize that patient and now we have a navigator that says, “Okay, this patient has to be optimized. Let’s get the patient the best health possible. Let’s get their glucose levels down, let’s get their weight down, let’s get them off of smoking.” Then you have to decide what facility to do that procedure in. You want it to go to the least expensive and most safe environment. Is that patient able to go to an ambulatory surgical center, community hospital or a physician-owned hospital. I don’t want to go to the University because it’s so expensive but you may have to because the patient may be sick. Once you figure that out, then you proceed with care and that’s when you’re going to find that if you’re going to make money or lose money. You could do it in a retrospective manner. Say the average cost of care for knee arthroplasty is this, pay me that money. I’ll be happy. Or you could do it prospectively. Again, you pay me a certain amount of money. If it doesn’t come in under that number, I lose money. But if it comes down under that money, I win money. So we’ve done that for the 53 bundles of care and we’ve done great until recently.

Well, the systems are changing. BPCI Advanced has looked at the past performance and they’ve sort of ratcheted down the reimbursement. They’ve said, before you used your tax ID number, you were able to change the point of care and therefore saved money, but now we’re not going to let you do that anymore. Now we’re only focusing on your particular hospital so the point of care has been removed. Now we’re going to say, “Okay, you came in at this number, you really have to improve care. You have to come into this number.” So it’s really becoming more difficult in the Federal Government bundled payments to make money.

Rothman Orthopaedic Institute struggled two (2) years ago and we struggled even more last year. We have optimized our care which is the purpose of bundles. We need to decide if we are able to make any money anymore. So we may have to say “no” to certain bundles and go into commercial bundles. It doesn’t mean that it’s a race to the bottom. We’ve become as efficient as we can, which is the purpose of the bundled payment program in the first place and now we have to figure out how we want to participate. Do we move on to more of a population-base, healthcare-based model, per member, per month or so forth? That’s what we’re evolving to because we’ve done the bundle now for nine (9) years. Most people have not entered into that process. It’s a process you have to go through because you can get rid of variability, redundancy, waste and you can work on your indications.”

So we’ve talked a lot about the cost, a portion of the value equation, but not about outcomes. Tell me how you’re tying outcomes to the cost data and ensuring that you’re cutting costs in appropriate areas at Rothman.

Dr. Vaccaro, “There are multiple different ways. We look at the whole enterprise, like where do patients go, what’s their readmission rate, what’s their complication rate, how many patients fall below a BMI of this hemoglobin A1C below that and so forth. So we look at it from an enterprise perspective then we look at it at a divisional method. As an example, let’s look at the joint arthroplasty group – how many readmissions do they have, how often do they go to the emergency room. Then we look at it at a physician level – where we look at process measures on their readmission rates, their complication rates, where do they discharge patients. Finally we look at it from a patient perspective – how do the patients like their experience, which is the most important thing…is the patient really satisfied?” 

So we look at all that and we have a report card that we use to incentivize or penalize the provider. If your outcomes (and we collect them all), come back and you’re not doing well, your episode of care costs are usually higher, that goes on your report card and whatever bonus we have 10% or 15% at the end of the year, you either make it or you don’t make it by those outcomes.

The big problem we have is the burden of collecting care. I’ve been working in different ways with different companies to make outcome collection passive, have your iPhone collect your activity data and then at the end of the day plugin zero (0) to ten (10) in terms of your VAS scores and your ODI scores and data like that. Make it simple, make it patient responsive to how a patient’s doing so you don’t have to have someone that you pay for in your office go out and set up a registry, which is expensive. That’s the future.”

When you’re sharing these reports with the surgeons in the practice, are they blinded or is there full transparency?

Dr. Vaccaro, “Totally non-blinded and transparent, which is upsetting and good. For example, I see things where Dr. Vaccaro, your sepsis rate was 2.5% and I responded, “I didn’t have any patient with sepsis.” So it’s the inaccuracies of some of the outcome measures that we have, they could print it out in the dashboard. Everyone sees it and I reply, “That’s not accurate.” Then I get upset. I guess it motivates me to find out what happened.”

In Conclusion:

As per Dr. Vaccaro, “Transparency is good, it motivates good behavior. It’s a little embarrassing, which is what it should be and it may not be as accurate as it should be but it’s transparent. That’s why we do it and it’s great.”

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