February 7, 2024

Session: How value-based care will impact surgical services

Editor's Note

Understanding the impact of value-based care on the surgical suite (VBC) will be essential for hospitals to understand as payers begin to seek partners in new payment models. In a conference session yesterday, Lauren Cricchi, associate principal, financial services at Avalere Healthcare and Katie Sullivan, senior vice president, legal at Epiphany Dermatology, detailed how these alternative payment models can incentivize better care and financial performance amid the accelerating shift to VBC

Over the years, paying for volume (such as in traditional fee-for-service payments) has slowly shifted toward paying for performance (such as paying for reporting on measures or incentivizing payments for high-quality outcomes). Amid the continued evolution toward paying for value (characterized by shared savings, capitated payments, and incentives to coordinate care), various payment arrangements are gaining traction. Cricchi and Sullivan ranked the most common examples along a continuum of risk with low-risk fee-for-service on one end and global payment/capitation on the other, focusing particularly on surgical bundles and other episodic/bundled arrangements.

Other session takeaways included key regulatory considerations for VBC. On the federal level, examples include anti-kickback statute, the Ethics in Patient Referrals Act (“Stark Law”), program integrity/reporting requirements, antitrust legislation, and HIPAA. On the state level, examples include state privacy laws, Risk Bearing Provider Organization (RBPO) Licensure, corporate practice restrictions, and concerns related to state licensure and certification.

The presenters also highlighted tactical approaches to VBC in the surgical suite, such as driving savings by shifting total joint replacement surgeries to outpatient settings. With high but predictable costs, measurable quality outcomes, and opportunities for site-of-care shifts, retrospective surgical bundles are a valuable first step in value-based care, they said.

The presentation concluded with an overview of how VBC can improve OR financial performance. Mechanisms include bonus payments that recognize and reward high-value, efficient, patient-centric care; incentivizing group purchasing or other cost-saving measures; the possibility of improved partnerships with payers; and the support of owned ancillary services where operations are easier to standardize.


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