You're Doing it Wrong
Value-based Absurdism, Condition-Specific Bundles, and Getting it Right
Presented by Commons Clinic
This week, we're reaching back into the archive for an updated and revamped post on an important topic: sustainable MSK VBC. Let's be honest, we're all kind of sick of the term "value-based care." The concept remains vitally important, but the phrase itself has been stretched to the point of absurdism.
Moving past the "everything but nothing" stigma of VBC requires accepting that value is intrinsic to quality, not the byproduct of a payment model. We'll know we've succeeded when it's no longer necessary to distinguish between value-based care and just "care."
Thus far, we haven't quite figured out how to get there. Musculoskeletal conditions have been at the forefront of VBC efforts, but lack of success means we're doing something wrong. At the risk of being a touch hypocritical, let's talk about VBC MSK!
VBC Absurdism: A philosophical theory that the value-based universe is irrational and meaningless.
From the EIC
The challenges facing MSK care delivery are well-chronicled. Treatment of MSK conditions costs the government and employers a lot of money, quality is highly variable, and — per the narrative — there is a lot of expensive, low-value, unnecessary care.
The fee-for-service system favors tests and procedures without adequately incentivizing (appropriate) conservative treatment. Whether it's "volume over value" or "quantity over quality" — FFS falls short. If incentives drive behavior, how do you convince orthopedic surgeons to put down their scalpels and pick up their physical therapy referrals?
The assumption here is that surgeons just want to cut and are financially driven to eschew nonsurgical care. Is this reality or cynicism? Like many complex situations, the truth lies somewhere in between. Unsurprisingly, various attempts to solve this conundrum have failed. We have yet to see sustainable VBC MSK programs.
Believe it or not, orthopods have been on the forefront of value-based care — more so than almost any other medical specialty. Joint replacement surgeons have worked with CMS to design and implement programs such as the Bundled Payment for Care Improvement (BPCI) and Comprehensive Care for Joint Replacement (CJR). Taken as a whole, these programs have been successful in reducing costs without sacrificing care quality.
Furthermore, there's evidence that concerns about cherry-picking and lemon-dropping never manifested in access restrictions. That's the good news. The bad news is that such programs are solely tied to procedures. While they reduce costs associated with hip and knee replacement surgeries, existing VBC MSK programs focus on surgical episodes of care alone — they do little to capture the value of nonsurgical treatment.
This shortcoming limits program impact and prevents realization of comprehensive, integrated musculoskeletal condition treatment. Attrition is another major problem with current MSK-focused VBC programs. Surgical bundle target prices shift lower (ratchet effect), maximum efficiency is reached, margins compress, and upside risk flips to downside risk — the proverbial "race to the bottom." Rather than pay money back to the government, providers simply exit the VBC program, returning to traditional FFS. (The Rothman Institute at Thomas Jefferson University is a perfect case study of this phenomenon.)
CMS plans to sunset both CJR and BPCI (now BPCI Advanced) by the end of 2025. Whether these programs were successful depends on your expectations, definition of success, level of patience, biases, and point of view. Again, both generally achieved their goals of reduced costs without compromise in care quality, outcomes, or access. Participation in these programs led to enduring lessons on value creation.
CJR/BPCI Lessons Learned:
Health optimization prior to surgery reduces complications.
Nurse navigators reduce readmissions and improve engagement.
Eliminating or reducing expensive post-acute care is safe and cost effective.
Despite these lessons, both programs have fallen short. Adjusted payments made to hospitals during the pandemic wiped out CJR savings and turned the program into a net loss for CMS. CJR participation is mandatory; BPCI is voluntary. As discussed earlier, downward pressure on target prices has led to significant BPCI attrition. What good is a voluntary program that no one volunteers for?
CJR and BPCI will be replaced by some other form of accountable care, and participation will almost certainly be mandatory. What such a new program looks like isn't yet clear. CMMI may have tipped its hand a bit with two recently announced programs—"Making Care Primary" (MCP) and "Transforming Episode Accountability Model" (TEAM). Both are attempts to align PCPs and specialists while supporting "advanced primary care services."
Sustainable value-based MSK care requires comprehensive, longitudinal, whole-person care that encompasses the entire patient journey — otherwise known as "condition-specific" VBC. Here the bundle or capitated payment is tied to a diagnosis, not a procedure. In theory, condition-specific VBC is more effective at driving value across the care continuum. It may finally solve the conundrum of how to incentivize appropriate longitudinal care — surgical and nonsurgical.
Components of Condition-Specific VBC:
Longitudinal care tied to a diagnosis
Incorporation of surgical and non-surgical treatment
Global sub-capitation with nested surgical episodes
Comprehensive care coordination
Control of bundle open to non-surgeons (?)
In this new model of care, procedural episodes are nested within the larger care pathway rather than treated as discrete surgical episodes. As a corollary, this approach opens the management of MSK conditions beyond orthopedic surgeons. While CMS is prodding PCPs to step up to the plate, any risk-bearing entity could theoretically participate — startups, advanced primary care providers, physical therapists, orthopedic surgeons, or other designated value-based entities.
Success in condition-specific bundle programs requires delivering comprehensive chronic care management including behavioral and mental health, medical comorbidities (such as diabetes and obesity), and robust care coordination. I'd argue that orthopedic surgeons (and other MSK-focused specialists) are best suited to evaluate and manage bone, muscle and joint problems. The rub — few consider themselves experts (or willing participants) in these other aspects of a condition-specific approach. Conversely, PCPs are better suited for CCM but less suited for specialist-level MSK expertise. Who should manage perioperative care nested in surgical bundles? How best to create a program that achieves condition-specific goals while ensuring patients get the right care?
There are a few potential approaches. First, orthopedic surgeons could bring CCM capabilities in-house or, conversely, PCPs could do the same for MSK condition management. Shifting payment models and financial incentives should make doing so attractive from an economic standpoint. Clinically, success in these programs relies on getting both sides of the equation right — especially if participation is mandatory.
Condition-specific VBC creates an opportunity for risk-bearing entities to own the entire care journey. Thoughtfully implemented care pathways reap the benefits of appropriate nonsurgical care while ensuring patients receive specialist-level treatment. When it comes time for surgery, nesting surgical episodes within the pathway supports longitudinal care (rather than contracting outside the bundle).
While a condition-specific approach may address the shortcomings of current VBC MSK, it's not without drawbacks. No payment system is unexploitable. Any incentive can be perverted. Pointlessly delaying definitive surgical treatment to save money in a bundle is low-value care. Doing so almost certainly costs the system more money over time.
Challenges of condition-based VBC:
How to define conditions
What to do when conditions overlap
When/how to set a beginning and end to the bundled or capitated period
How to set bundle price or capitation level
FFS vs. VBC debates frequently miss the point — payment method is a poor mechanism for driving quality. In other words, we're doing it wrong. Designing systems with the intent of legislating good behavior limits upside. Quality and value will always be the byproducts of great care and efficient process.
Under current programs, incentives are hard to align, and fragmentation remains the state of play. We've blown billions of dollars—taxpayer, VC, PE, employer, payer, provider, patient dollars or otherwise—without much to show for it. Condition-specific bundles enable integrated, comprehensive, next-generation musculoskeletal care. They break down silos and create centralized ownership of the care journey. If CMS (or anyone else) really wants to innovate here, why not spend some time and money trying something completely different rather than retrofitting another alphabet soup program onto a broken system?
Demand for MSK services is going to explode, driven by an aging population, the obesity epidemic, and the "silent" epidemic of early-onset hip and knee arthritis. No matter how efficient and value-driven we are, total costs are going to rise, and demand is going to outstrip supply. There is a place for prevention, education, and engagement here if we can figure out how to incentivize and reward it. A continued shift to lower-cost outpatient centers/ASCs will save money as well. All levers will need pulling if we are to stem the tide, and they'll be easier to pull if attached to the same machine.
Ben Schwartz, MD, MBA
Editor-in-Chief, The Surgeon’s Record
Commons Clinic Senior Clinical Fellow
