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Imagine this. You're at the Hyatt Regency Chicago

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surrounded by the top minds in the ambulatory

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surgery center industry.

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Welcome to the Becker's 30th annual meeting, the

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business and operations of ASCs from October 30th

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to November 2nd

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2024. Picture the excitement as you collect business

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cards from over a 1000 executive level attendees

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forging priceless connections.

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Feel the buzz of conversations

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as you participate in more than 60 sessions

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led by over

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225 elite ASC speakers.

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Envision yourself gaining actionable insights on topics like

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private equity strategies,

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ASC business growth, and innovations in spine, orthopedics,

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GI, ophthalmology, and cardiology.

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Now imagine yourself listening to inspiring keynotes from

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Hall of Fame boxing world champion, Lila Ali,

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and professional basketball player, Caitlin Clark. Their stories

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will motivate you to take your business to

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new heights. You'll leave with a wealth of

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knowledge and a network of connections to help

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lead your ASC into the next year. Don't

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miss out. Get registered today. Visit beckershospitalreviewdot

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com and click on the events page to

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find the conference website. That's the beckershospitalreview.com

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events page. See you in Chicago.

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This is Laura Dierda with the Becker's Healthcare

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podcast.

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I'm thrilled today to be joined by doctor

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Steve Lucey, cofounder of Valere, an outpatient joint

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replacement consulting company. Doctor Lucey, it's a pleasure

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to have you on the podcast today. Thank

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you, Laura. Thanks for having me.

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Absolutely. And, you know, it's always a pleasure

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to speak with you. We've been able to

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connect a variety of times throughout the years

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and just really, really fascinating to hear about

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your journey, as a joint replacement surgeon and

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also in the outpatient joint replacement space and

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now getting into more bundled payments in value

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based care. And so I'm excited for this

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particular

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conversation because I know we're going to be

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getting into a unique situation that you're in,

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and and really has a lot of potential

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for others as well,

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looking at some of the shadow bundles from

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Medicare data. So, I think first and foremost,

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though, can you please introduce yourself and tell

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us a bit about your background?

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Sure, Laura. So I have been in practice

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here in Greensboro, North Carolina for 24 years.

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I'm a knee specialist, so I do arthroplasty

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in the knee as well as arthroscopy in

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sports medicine.

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And over the past

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7 years,

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I have been a champion of moving,

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arthroplasty, hip and knee arthroplasty, and now shoulder

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arthroplasty

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from the inpatient setting to the outpatient setting,

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specifically in the ambulatory surgical center. Center. And

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so we began a, program here in Greensboro,

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which has been very, very successful, which then

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compelled us to start a consulting company because

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people are asking for help. And so we

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spend a fair amount of time working with

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our

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colleagues and ambulatory surgical centers around the country

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helping them launch,

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ambulatory surgical arthroplasty

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programs, which obviously is a huge value based

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play as it's, we have, proven that the,

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the, outcomes are superior and the cost is,

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far lower. So that's pretty much where I've

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been spending my time over these last couple

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years. And we've learned a ton.

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And we've done most of that work through

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creative, bundled payment models, both in the commercial

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space, in the Medicare space, and, now more

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and more and more in the,

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direct to employer,

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space as well.

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That's great to hear. And I know all

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of those areas are are really emerging on

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more of the national level as, as,

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places where, you know, health care organizations,

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can and really,

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drive value and be innovative in how they're

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thinking about care delivery,

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and partnerships in the future. So could you

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tell us a little bit about those shadow

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bundles? How do they originate, and what makes

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them unique?

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Yeah. So, you know, we we cut our

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teeth on commercial bundle payments years ago in

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the ASC, and that's been and continues to

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be, excellent.

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We learned, though,

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historically,

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back 10 ish years ago with the,

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BPCI, the federal government program,

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after Obamacare.

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And, that was a program where they set

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a target price in your community. If you

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did,

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in the 90 day episode, if you spent

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less money than the target, it was a

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shared savings program. Worked really well except for

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the federal government just kept reducing the target

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price. And then once it became you know,

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we were doing a bunch of work for

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basically no savings.

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Most people across the country just quit.

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So we've been kind of in the aftermath

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of that for a couple of years.

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And so what we have done here locally,

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which has been very creative,

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is that we have worked with our local

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accountable care organization,

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Triad Healthcare Network, very, very

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excellent,

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ACO ACO reach model specifically.

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And so the shadow bundle data was given

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by this by CMS

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to the ACOs across the country,

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a few years ago. And it basically showed

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them that if you had a 90 day

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episode

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in this particular procedure,

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then you're in your era. You're this is

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how much it's costing.

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And so they got that information and then

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approached us about doing a very much a

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BPCI

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like program

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where we aligned our incentives,

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again, locally in our area, in our region,

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so that we took that,

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shadow bundle data.

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And we,

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then said, okay, primary care physicians,

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ACO.

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Here's where we think we can get to

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with doing, in office case management,

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a risk assessment to see if we can

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do these people in the ASC.

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And then we created a contract for a

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shared savings program.

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So

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that is how we figured it out. But

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couple of key points I would just say,

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Laura, is that it's the aligned incentive. We

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had to sit down across the table from

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our,

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you know, very, very smart and engaged primary

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care,

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doctors, internal medicine doctors in our community

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with this data given from the federal government

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and said, okay.

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How can we save money,

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in the program since the ACO is financially

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responsible for these lives?

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How can they work with us, the specialist,

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to create a shared savings program?

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Well, that's fascinating to hear about, you know

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and really, that evolution of the shared savings

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program

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seems like, something that obviously is still changing

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and evolving, but, you know, really helpful to

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know and understand what's been tried before, why

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things, you know, especially with the BPCI,

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fell apart of it, and and now looking

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at, you know, where things are headed.

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I know you were among the first, if

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not the first, to develop this type of

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partnership with the ACO and look at the

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shadow bundle,

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data

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and try to figure out, you know, how

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you can create savings overall.

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How did you do it, and what really,

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you know, have you seen since you started,

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looking at the shadow bundle payment data and

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creating this arrangement?

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Yeah. I think I think we actually we've

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been researching it, and I think we may

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actually be the only place in the country

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that's doing it. So the ingredients were, number

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1, a really good successful ACO with good

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leadership,

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with good vision,

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and on one side of the table. And

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on the other side of the table, a

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group of orthopedic surgeons that knew what bundled

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payments were, that had had some experience and

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some success in bundled payments,

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and understood the drivers

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of efficiency of care, understood what value based

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care actually was,

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site of service shift to the ASC, elimination

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of,

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admission to skilled nursing facilities, reduction in use

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of home health physical therapy, you know, all

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of the different pieces,

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that controls,

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spend in that,

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90 days following surgery. But it took a

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group of physicians on one side of the

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table with a financial responsibility from CMS

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across the table from a group of of

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specialists of people who were doing those procedures,

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and then we had to get to an

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alignment.

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So I give a lot of credit to,

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our ACO partner in this and a lot

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of credit to our community of orthopedic surgeons

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who changed their behavior. We hired case managers

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to manage these, patients.

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We adopted a risk assessment,

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tool to make sure that we were moving

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patients,

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to the ambulatory surgical center who were appropriate.

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So really, the classic and aligned incentive play

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that that creates savings, and then we share

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in the we share in the savings.

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That's great to hear. You know, and really

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helpful to understand

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having that background of, obviously,

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knowing what it's like to be in a

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bundled payment situation,

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having the experience with the outpatient surgery center,

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and and shifting cases there, being, you know,

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safe about it, and,

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making sure that you've got the right protocols

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in place, it seems like really, really is

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helpful. What other lessons have you learned since

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you've launched this bundle?

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Well, I think it's just doubling down

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on on the just kind of the natural

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evolution,

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meaning, number 1, we know we're not gonna

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get paid more by CMS, the procedure, the

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the surgeon.

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They're constantly whittling down our reimbursement. So I'm

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imagining on the other side of the table,

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the ACO is probably also going to be,

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you know, given less money per patient to

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provide care. And so it's gonna be a

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continual,

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you know, pursuit of having this aligned incentive

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where we need to help each other. We

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need to take care of the patient first

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and foremost.

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We need to adopt,

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strategies,

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standardized protocols, look at outcomes,

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outcomes,

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look at referral patterns. I mean, there's a

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lot of work that we can con continue

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to do over time, but it is it

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is difficult because when we're getting paid less

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and less and less,

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at some point, you know, you throw up

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your hands and you say, well, we're you

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know, we can't squeeze anything else out of

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this. You know, it cost money to do

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these procedures.

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It caught you know, we have to have

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good people. We have to have good surgeons,

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good PAs, good nurses, good anesthesiologists.

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We have to have good implants. We have

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to take care of our people.

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And so they're you know, if we keep

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whittling the cost down to where we can't

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take care of it,

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of the folks, then we're we're gonna be

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like some of the other countries of the

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world where there's very, very long lines. The

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care is not as good.

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The outcomes are not as excellent, and we

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do not want that. So it's just a

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continual evolution, but we're gonna keep fighting for,

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you know, for our patients.

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That makes a lot of sense. And, you

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know, it's fascinating to hear about that, kind

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of cost progression, especially from,

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Medicare side of things. How close are you

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to that line where, you know, it's just

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really unfeasible to take any more cuts or

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absorb any more of the cost reductions as

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we've seen,

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you know, regularly on annual basis?

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Well,

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one part of that answer is I know

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exactly how much it cost. I know exactly

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how much it cost for me to do

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a, Medicare total knee in an outpatient surgical

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center, what my fee is, how much the

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implant cost, how much physical therapy they need,

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how much that costs. So I know that.

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The prob the problem is that that's the

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best, best, best case scenario with a, you

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know, very healthy patient. But that's not every

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patient. And so the federal government needs to

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recognize that not only is that it's a

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good target,

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but it's a but you have to pay

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us to do it. You have to pay

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for, you know, a surgeon like me to

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do the surgery.

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And what they're paying us now, to be

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perfectly honest, is is not even adequate. And

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so if they reduce it anymore, there already

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are surgeons,

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who are just not accepting Medicare.

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And if that happens, what's the point of

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all of this? How are people supposed to

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have their surgery done if people are no

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longer accept accepting Medicare?

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So,

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we do know the costs,

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but we also know how much, you know,

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we should be paid. And so there'll be

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a standoff here in the next decade for

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sure,

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before we start seeing some really long lines

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for joint replacement.

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Absolutely. I I appreciate that perspective. Thank you

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so much, doctor Lucey. Now before we wrap

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up here, I'm wondering what advice do you

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have for other physicians who are looking to

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take advantage of some of the more,

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disinformation in the bundled payment program.

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How are you continuing to maximize those efforts?

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Well, I would say number 1, if you

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have a accountable care organization in your community,

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you should reach out, and you should sit

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down and talk about how to align incentives

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to create a value based care play,

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with these types of scenarios with joint replacement.

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It's a very,

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high cost,

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episode. It's the number one spend of Medicare

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hip and knee replacement. So if you have

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an ACO in your community, you need to

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reach out. We're happy to help you,

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have that conversation with them and give you

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advice and some historical perspective.

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Second thing I would tell the joint replacement

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surgeons out there is you need to know

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your spend.

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You need to know your outcomes.

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There will come a time where,

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companies around the around the country who are

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not going to pay for insurance for their

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employers, they're gonna self be self insured.

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That's a very, very fast growing market.

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And they will want to know how much

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does it cost for you to do a

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hip or a knee replacement.

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And so you need to know those numbers,

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and you need to build those direct to

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employer bundles.

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And so you just need to become

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as well, maybe not as much a businessman

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as a clinician, but you at least need

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to become a businessman and know your outcomes.

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You need to know your costs.

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And that's just gonna be the way of

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the future.

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That makes a lot of sense and and

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is really helpful

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Doctor Lucy, thank you so much for joining

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us on the podcast today. This has been

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a fascinating conversation, extremely helpful and enlightening in

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terms of how, you know, you can really

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take advantage of this type of data and

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information in working with CMS. And I appreciate

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your time today. I hope, you know, we're

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we're able to connect again soon.

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You bet, Laura. Thanks for having me.