In this episode, we’re pleased to welcome Dr. Catherine MacLean, MD, PhD, Professor of Medicine at Weill Cornell Medical College, and Senior Vice President and Chief Value Medical Officer at the Hospital for Special Surgery, to discuss the value in musculoskeletal care.
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Learn how to listen to The Hospital Finance Podcast® on your mobile device.Highlights of this episode include:
- Value Innovation Center by the World Economic Forum
- What makes HSS high value
- Examples of low-value musculoskeletal care
- Value-based programs
- Barriers that prevent advancing high-value care
- Building care networks
- How AI impacts care value
Kelly Wisness: Hi, this is Kelly Wisness. Welcome back to the award-winning Hospital Finance Podcast. We’re pleased to welcome Dr. Catherine MacLean, MD PhD, professor of medicine at the Weill Cornell Medical College, and a senior vice president and chief value medical officer at the Hospital for Special Surgery where she leads the development and execution of strategies to measure, report, and improve healthcare value through its Center for the Advancement of Value in Musculoskeletal Care, which is recognized by the World Economic Forum as a Value Innovation Hub. She is a nationally recognized expert on healthcare quality and value with diverse leadership experience in her current role and previously as an executive at Elevance Health, a principal investigator on numerous academic research projects at UCLA and RAND, and as a director, chair, or participant on numerous national boards, committees, and panels related to healthcare quality and value. Dr. MacLean obtained her MD from Washington University in St. Louis. She obtained her PhD in health services from UCLA’s School of Public Health. In this episode, we’re discussing value in musculoskeletal care. Thank you for joining us today, Dr. MacLean.
Dr. Catherine MacLean: It’s a pleasure to be here. Thank you for having me.
Kelly: Well, great. Well, let’s jump in. So, the Hospital for Special Surgery, or HSS, was recently designated as a Value Innovation Center by the World Economic Forum. What does that mean exactly?
Dr. MacLean: Yeah. So, at the 2019 annual Davos meeting, the World Economic Forum launched its Global Coalition for Value in Healthcare. And really, what kind of drove this is this burning platform: not just in the U.S., but worldwide, there’s growing concern over the sustainability of healthcare. It’s expensive. Costs are growing exponentially, and this puts severe strains on budgets. And those budgets may be different in different countries. And in the US these strains are both on the government and private employers who shoulder a huge part of the cost in our system, but it’s an issue everywhere. So, the World Economic Forum put together this coalition, which is a collaboration between the World Economic Forum– and the World Economic Forum is really the international organization for public-private cooperation. So, on the one hand, it’s the World Economic Forum, on the other, all different leading healthcare stakeholders to promote and drive global health system transformation.
So as part of this, they wanted to designate Value Innovation Hubs. It’s a group of mature early adopters of value-based healthcare. And those early adopters, through this initiative, can showcase and be proof of concept about creating improvements in both patient outcomes and cost savings. So, it was a rigorous evaluation process. And we applied, and they really looked to see, “Do you deliver good outcomes? Are you able to deliver care in a value-based way? Do you have the capabilities to do value-based contracting? And have you demonstrated success?” So that’s what it is, and we’re new. We just recently got this designation. We’re excited to work with the World Economic Forum and other partners to try to advance value-based healthcare both in the U.S. and internationally. For us, we see it as a really good opportunity to share what we’ve done but also for us to learn what others have done in the value space, what we can learn from them to apply to the care that we deliver.
Kelly: That sounds great. And so what makes HSS high value?
Dr. MacLean: So, value is a relationship between quality and cost. So, consumers make value decisions every single day. You go to the grocery store. You go to buy gas. You purchase. You’re making inherent value decisions. So, I think it’s not such a difficult concept. I think where the challenge comes in is that it’s hard for consumers to understand the value of healthcare. First of all, to understand the quality of the care at the place they’re going, and then also to understand the cost. Both are pretty opaque in healthcare. But HSS’s high value is that we do deliver extraordinarily high-quality care. This isn’t just based on what I say. This is based on what lots of different external quality assessors look at. So, CMS measures our quality. U.S. News & World Report measures our quality. And we are among the highest-quality places in the US. And those are based on kind of standard metrics that we currently look at, things like complications or the need to have a reoperation or readmissions, those sorts of things. Also very high satisfaction.
I think, as a very early adopter in terms of next-generation quality measurement– and honestly, while we need to first do no harm, nobody goes to a hospital to get a complication or to avoid a complication, right? We’re really going to hospitals to get better, right? And so we ought to be measuring whether patients are getting better with the procedure that they undergo or the treatment they undergo at different hospitals. So, we’ve implemented as a standard of care looking at patient-reported outcomes. So, we actually look and see – we’re an orthopedic hospital – if a patient has a hip or knee replacement, “Do they have an improvement in their pain? Have they had an improvement in their function?” And we measure this for every single patient. All right? And we do have very good outcomes. So that’s kind of the quality side of that value equation.
And on the cost side, I think the thing that’s really important to think about when you think about cost is it’s not about the unit cost. It’s about the episode cost, so from the time a patient comes in to have a procedure or comes in for a recommendation on a treatment – which could be a procedure; it could be a drug treatment – to some time period later. So, if it happens to be a surgical procedure, we’re usually thinking in terms of 30 or 60 or 90 days. If it’s someone who has a nonsurgical procedure, we typically think in terms of maybe 6 months or a year and see how that patient’s doing. And it’s the cost of that whole episode. So, you could have one hospital– maybe they’re less expensive. But maybe they have a very high readmission rate, and so the cost of care goes up. Or maybe that hospital does a lot of unnecessary stuff. So maybe they send patients to nursing homes when patients don’t really need to go there. Maybe they do X-rays that aren’t necessary. Maybe they do tests that aren’t necessary. And all that stuff adds up. And there are big differences. And so I think that when we look at our value proposition, it’s about, number one, delivering the highest quality care and then doing it in the most cost-efficient way. And that cost efficiency, we think about in terms of kind of the whole patient across a whole episode of care.
Kelly: Sounds great. So, what are some examples of low-value musculoskeletal care?
Dr. MacLean: So low-value care really is doing stuff that’s not necessary. So that’s kind of the big thing you want to look at there. And for musculoskeletal care, I think the kind of poster child is unnecessary spine surgery, so patients who have spine surgery that’s not necessary. Other examples of low-value care include imaging that’s not necessary, so either doing an X-ray– any type of imaging study when it’s not needed. Again, this happened quite a lot, and we know this nationally. And then doing a more advanced image when a simple plain film would suffice. Those are kind of examples. I think another example in the musculoskeletal space is– we see this in some geographic areas. There seems to be a lot of arthroscopy done. So that’s when you stick a scope in a body part, so for example, in a knee. And then within the next year, the patient ends up having knee replacement surgery. So, most of the time, it’s not necessary to do an arthroscopy before someone has a knee replacement. And that would be regarded as low-value care.
Kelly: What is HSS’s experience in value-based programs?
Dr. MacLean: So, we’ve had the opportunity to participate in a number of value-based contracting arrangements. I would say our biggest experience has been through CMS, through some Medicare programs. We participated in both the BPCI, or Bundled Payment for Care Improvement, bundled payment program and also the CJR, Comprehensive Joint Replacement, bundled payment program. And the way that those programs work is that, basically, CMS would look at how much it costs to take care of a Medicare beneficiary over a 90-day time period – so those were 90-day bundles – and then they said, “Okay. So, in this geographic area, it costs us this amount of money on average to take care of a patient for 90 days.” And that included everything, so if a patient got discharged from the hospital, if they were readmitted, if they used nursing home services, if they had a colonoscopy, just everything that happened in that 90 days. And obviously, a colonoscopy is unrelated to a knee replacement. So, they looked at that, and then they came up with– they understood what that average was. They took a discount off of the top of that, around 5%, and then said to the hospitals or the conveners in that areas, “If you want to participate in this program” – and some of these programs are mandatory; the CJR in some geographic areas was mandatory – “then we’ll pay you this amount of money to take care of the patient in that time period.”
And I’ll just kind of walk through an example. And the numbers were different in different geographic areas. And I’m going to use $25,000 just as an easy number to use. So, if you assume the average cost was $25,000 in a geographic area. It was a retrospective bundle. So, CMS would go back and look at the cost of care for every individual patient during that 90-day period. And so if a patient costs more than $25,000, CMS would say, “Okay, this patient costs $30,000. So, Hospital, you owe us $5,000 for this patient.” And the next patient, maybe it only costs $20,000 to take care of that patient. It’s like, “Okay, Hospital, we owe you $5,000,” and on and on, right? So, CMS would tally this across all the different patients. And at the end of the day, if the hospital came out in the black, the hospital would get to keep that savings. But if the hospital went over, they would owe that money to CMS. And the thing that was so great about that program was that– a few things happened. One, CMS shared with us the administrative data. So as a patient, we could see exactly what’s happening. We could see how much nursing home utilization, how many readmissions, where patients were being readmitted, what services were being used. And we were able to kind of build a program around that to really drive care efficiencies and improve quality at the same time.
And another kind of thing that happened with that was that the money, that reconciliation money that we got, we could use for different administrative programs that aren’t covered in a fee-for-service world. So, we put into place – this was before the pandemic – a video physical therapy program. And so our patients, instead of having a physical therapist come into the house – and this would be through a home health agency – we would have one of our therapists, possibly even the one that took care of them when they were in the hospital, do video therapy in the post-acute space. So that’s for the six weeks after surgery. Patients loved it. Our staff loved it. We felt much more connected with our patients and were able to kind of help with other things that came up as well. We were able also to put together a care management type of a program where we identified patients who were high-risk. And if they were high-risk, we would have nurse practitioners follow up on them after they were discharged from the hospital just to make sure that they were okay. And I think we averted a number of ER visits and hospitalizations through that program. And that’s not something that you can bill for, but it’s something that we were able to pay for through this reconciliation money that we got through this bundled payment program. So, I think it was a net win for CMS, for us, and most importantly, for the patients.
We’ve also participated in a few other bundled payment programs, like I said, the BPCI and BPCI Advanced program for CMS. We have some limited experience working with individual employers and with what I would call intermediaries, who are kind of a– they’re not new, but it’s an entity that sits between employers and providers and will, in some ways– they’re not the insurance company but, in some ways, act like an insurance company in that they are putting together networks and figuring out the price for certain procedures and then directly connecting the patient to the providers and those networks. So, I think that’s an interesting entity, and we’ll see how that plays out over the next several years.
Kelly: Very impressive and quite interesting. So, what barriers prevent advancing more high-value care?
Dr. MacLean: Our whole health system is really built upon a fee-for-service chassis. And when you get down to just basics of healthcare, not healthcare delivery but the administration, sort of payment part of it, there are huge systems in place at health plans. They process about a zillion claims a day across the country, right? And it’s really important to be able to understand what services were provided and then how much we’re going to pay for them, right? And so big systems, both in the insurance companies and among care delivery systems. And so I think it’s just really hard at a level to book that system administratively, right? So, we have conversations with payers all the time, and it’s difficult to– even though we have the highest volume– we’re the highest-volume orthopedic hospital in the country, we’re smaller than a lot of other hospitals. And for a health plan to put together a value-based program just for us is administratively costly, right?
So, I think that that’s a big challenge is this infrastructure that we have, which is quite good at servicing fee-for-service payments but really wasn’t developed for value-based payment. And then I think another barrier is just the fragmentation of our care system. And so we see that fragmentation both in the delivery of care and in the payment of care. And I think that those are pretty substantial barriers to getting to value-based care. I think there are a lot of people who are interested in getting value-based care – employers, insurance companies, care delivery systems – but there are some big obstacles that we have to overcome to get there.
Kelly: That makes a lot of sense. So, what should employers be thinking about when they are building care networks for their employees?
Dr. MacLean: Yeah. So, I think that the– again, trying to get out of this fee-for-service mindset and just understand that– and I’m sure that the listeners to this– many listeners of this podcast probably are in a position of looking at these monthly reports and looking at, “What was my spend last month? My spend on orthopedics was this. My spend was for these procedures or imaging.” And we need to get beyond this kind of easy way to look at– easy and standardized way to look at the cost of care to getting to more of an understanding of costs across an episode. So rather than saying, “Oh, we spent this much money on knee replacements last year and this– this many patients and this many knee replacements,” we should really be looking at, “Ooh, we had this many patients in our network who had osteoarthritis. This many of them got knee replacements, and this was the overall cost of care for those patients who got knee replacements over, say, a 90-day period. And this was our overall cost of care for our population with osteoarthritis.” There are just huge expenditures on unnecessary care. And just constantly driving toward lower unit costs is not going to lower costs overall. I mean, I’m sorry to report that there’s a long history in medicine of basically watching a payer lower the price on something and then, subsequently, the volume of that thing goes up, right? So that would suggest that there’s more unnecessary care happening.
So I think that employers really need to kind of get out of that unit cost mindset and think about overall episode costs, and then, as best they can – and this is going to take some work in their analytics – is to start thinking about things on a population basis. Let me give you an example. At HSS, every year my team does this analysis where we look at all the patients that got referred to us. We’re a referral center. And we look at all the patients that were referred to us to have a surgery. And 35% of the time– this was last year’s data. 35% of the time, when a patient was referred to us for spine surgery, our spine surgeon said, “You don’t need a surgery,” right? And so that’s not coming up anywhere in the analyses that employers are currently looking at. So that’s kind of getting more at that population kind of basis. And I mean, honestly, avoidance of unnecessary surgery, that’s where the money is. That’s where employers are really going to save their money. And we need to figure out a way to measure that so that employers know where they should send their patients.
Kelly: Sounds great. So how will AI impact care value?
Dr. MacLean: Oh, AI. There’s so much fun and exciting stuff about AI, just in our daily lives but also in medicine. I think that there’s a lot of opportunity, but I think we have to be cautious. I think that there are some people who think if we just throw all the data into a stew and we mix it up with the right kind of machine learning, that we’re going to get all these wonderful answers. Unfortunately, the data in our health system are pretty fragmented as well. That being said, there was a recent article published in JAMA Internal Medicine where a group of researchers looked at an old Reddit blog. So, Reddit has a subreddit where people can go on and ask real doctors medical questions. And so there was a record of this. And so it took all these questions and answers, right, that were posted on this Reddit blog, and then they went and asked ChatGPT those same questions. All right. So ChatGPT then gave the answers. And then the researchers took the questions and then the answers, either from the real doctor or from ChatGPT, and had people evaluate those, right? So, they had clinical experts look at the answers. And the end result was that ChatGPT did really well. ChatGPT, at least in that study, had answers– these evaluators said the answers were as good or better than those of the real doctor. Now, that being said, that was one question– that was one little example.
ChatGPT or large language models. People kind of had them take medical tests, like board exams and that sort of thing, and they passed. Not with flying colors. They passed. But I think that in the future these large language models, which can just digest enormous amounts of information, are going to get better. And I think that they’re going to do a good job. And I don’t think they’re going to replace doctors, but I think they are going to help doctors do a better job, for example, reviewing all the data in a patient’s chart and summarizing it in a kind of easy way. I think that’s one way. I think other things that AI– not large language models, but other types of AI, like computer vision, certainly will be useful in helping us do a better job interpreting radiographs or pathology slides or retinal images.
We’ve done some work in the predictive space where we have these large databases of 30,000 patients who have participated in a registry and we have complete data on them. And we can predict pretty accurately, with an area under the curve north of 0.8, so about 80% accurate, what the likely outcome is going to be if a patient is going to have a knee replacement. So, we can tell somebody with about 80% accuracy, if they’re considering knee replacement, if their outcome would be super good, that they’d be somewhat improved, or if they wouldn’t get better. They might not get better, or maybe they would even be worse after the procedure. And so I think that that sort of 80% accuracy along with a discussion with the surgeon, right, who can take into account many other factors is really helpful, right? So, our surgeons that are using this with their patients, it really helps them to understand how likely it is a patient is going to get better. Surgery’s a big deal. Most surgeries are kind of a big deal and something patients should understand. So, I think that the future is bright. I think that AI is going to help us understand vast amounts of data and glean new insights. I think personalized medicine…it will be really helpful for. But I don’t think it’s like we see in some science fiction movies where you see a patient lie down in some pod or something and the AI says what’s wrong and then administers the treatment all at once. I don’t know that we will ever get to that point.
Kelly: That would be interesting. It is certainly a growing and interesting field, that’s for sure. So, thank you so much for joining us today, Dr. MacLean, and for sharing all this really great information with us.
Dr. MacLean: It was my pleasure. A lot of fun to talk about this stuff. And thank you for having me.
Kelly: Yeah. And if a listener wants to learn more or contact you to discuss this topic further, how best can they do that?
Dr. MacLean: They can contact me through our value center. So, the email address is valuecenter@hss.edu. And be happy to respond. And if any of the listeners are interested in anything related to value-based care, we’re always looking for partners, and I would be interested to learn what folks are doing. If anybody has any ideas about how to advance things, we’re very collaborative and would love to be involved.
Kelly: Fantastic. And thank you all for joining us for this episode of The Hospital Finance Podcast. Until next time…
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