Imagine this. You're at the Hyatt Regency Chicago
surrounded by the top minds in the ambulatory
surgery center industry.
Welcome to the Becker's 30th annual meeting, the
business and operations of ASCs from October 30th
to November 2nd
2024. Picture the excitement as you collect business
cards from over a 1000 executive level attendees
forging priceless connections.
Feel the buzz of conversations
as you participate in more than 60 sessions
led by over
225 elite ASC speakers.
Envision yourself gaining actionable insights on topics like
private equity strategies,
ASC business growth, and innovations in spine, orthopedics,
GI, ophthalmology, and cardiology.
Now imagine yourself listening to inspiring keynotes from
Hall of Fame boxing world champion, Lila Ali,
and professional basketball player, Caitlin Clark. Their stories
will motivate you to take your business to
new heights. You'll leave with a wealth of
knowledge and a network of connections to help
lead your ASC into the next year. Don't
miss out. Get registered today. Visit beckershospitalreviewdot
com and click on the events page to
find the conference website. That's the beckershospitalreview.com
events page. See you in Chicago.
This is Laura Dierda with the Becker's Healthcare
podcast.
I'm thrilled today to be joined by doctor
Steve Lucey, cofounder of Valere, an outpatient joint
replacement consulting company. Doctor Lucey, it's a pleasure
to have you on the podcast today. Thank
you, Laura. Thanks for having me.
Absolutely. And, you know, it's always a pleasure
to speak with you. We've been able to
connect a variety of times throughout the years
and just really, really fascinating to hear about
your journey, as a joint replacement surgeon and
also in the outpatient joint replacement space and
now getting into more bundled payments in value
based care. And so I'm excited for this
particular
conversation because I know we're going to be
getting into a unique situation that you're in,
and and really has a lot of potential
for others as well,
looking at some of the shadow bundles from
Medicare data. So, I think first and foremost,
though, can you please introduce yourself and tell
us a bit about your background?
Sure, Laura. So I have been in practice
here in Greensboro, North Carolina for 24 years.
I'm a knee specialist, so I do arthroplasty
in the knee as well as arthroscopy in
sports medicine.
And over the past
7 years,
I have been a champion of moving,
arthroplasty, hip and knee arthroplasty, and now shoulder
arthroplasty
from the inpatient setting to the outpatient setting,
specifically in the ambulatory surgical center. Center. And
so we began a, program here in Greensboro,
which has been very, very successful, which then
compelled us to start a consulting company because
people are asking for help. And so we
spend a fair amount of time working with
our
colleagues and ambulatory surgical centers around the country
helping them launch,
ambulatory surgical arthroplasty
programs, which obviously is a huge value based
play as it's, we have, proven that the,
the, outcomes are superior and the cost is,
far lower. So that's pretty much where I've
been spending my time over these last couple
years. And we've learned a ton.
And we've done most of that work through
creative, bundled payment models, both in the commercial
space, in the Medicare space, and, now more
and more and more in the,
direct to employer,
space as well.
That's great to hear. And I know all
of those areas are are really emerging on
more of the national level as, as,
places where, you know, health care organizations,
can and really,
drive value and be innovative in how they're
thinking about care delivery,
and partnerships in the future. So could you
tell us a little bit about those shadow
bundles? How do they originate, and what makes
them unique?
Yeah. So, you know, we we cut our
teeth on commercial bundle payments years ago in
the ASC, and that's been and continues to
be, excellent.
We learned, though,
historically,
back 10 ish years ago with the,
BPCI, the federal government program,
after Obamacare.
And, that was a program where they set
a target price in your community. If you
did,
in the 90 day episode, if you spent
less money than the target, it was a
shared savings program. Worked really well except for
the federal government just kept reducing the target
price. And then once it became you know,
we were doing a bunch of work for
basically no savings.
Most people across the country just quit.
So we've been kind of in the aftermath
of that for a couple of years.
And so what we have done here locally,
which has been very creative,
is that we have worked with our local
accountable care organization,
Triad Healthcare Network, very, very
excellent,
ACO ACO reach model specifically.
And so the shadow bundle data was given
by this by CMS
to the ACOs across the country,
a few years ago. And it basically showed
them that if you had a 90 day
episode
in this particular procedure,
then you're in your era. You're this is
how much it's costing.
And so they got that information and then
approached us about doing a very much a
BPCI
like program
where we aligned our incentives,
again, locally in our area, in our region,
so that we took that,
shadow bundle data.
And we,
then said, okay, primary care physicians,
ACO.
Here's where we think we can get to
with doing, in office case management,
a risk assessment to see if we can
do these people in the ASC.
And then we created a contract for a
shared savings program.
So
that is how we figured it out. But
couple of key points I would just say,
Laura, is that it's the aligned incentive. We
had to sit down across the table from
our,
you know, very, very smart and engaged primary
care,
doctors, internal medicine doctors in our community
with this data given from the federal government
and said, okay.
How can we save money,
in the program since the ACO is financially
responsible for these lives?
How can they work with us, the specialist,
to create a shared savings program?
Well, that's fascinating to hear about, you know
and really, that evolution of the shared savings
program
seems like, something that obviously is still changing
and evolving, but, you know, really helpful to
know and understand what's been tried before, why
things, you know, especially with the BPCI,
fell apart of it, and and now looking
at, you know, where things are headed.
I know you were among the first, if
not the first, to develop this type of
partnership with the ACO and look at the
shadow bundle,
data
and try to figure out, you know, how
you can create savings overall.
How did you do it, and what really,
you know, have you seen since you started,
looking at the shadow bundle payment data and
creating this arrangement?
Yeah. I think I think we actually we've
been researching it, and I think we may
actually be the only place in the country
that's doing it. So the ingredients were, number
1, a really good successful ACO with good
leadership,
with good vision,
and on one side of the table. And
on the other side of the table, a
group of orthopedic surgeons that knew what bundled
payments were, that had had some experience and
some success in bundled payments,
and understood the drivers
of efficiency of care, understood what value based
care actually was,
site of service shift to the ASC, elimination
of,
admission to skilled nursing facilities, reduction in use
of home health physical therapy, you know, all
of the different pieces,
that controls,
spend in that,
90 days following surgery. But it took a
group of physicians on one side of the
table with a financial responsibility from CMS
across the table from a group of of
specialists of people who were doing those procedures,
and then we had to get to an
alignment.
So I give a lot of credit to,
our ACO partner in this and a lot
of credit to our community of orthopedic surgeons
who changed their behavior. We hired case managers
to manage these, patients.
We adopted a risk assessment,
tool to make sure that we were moving
patients,
to the ambulatory surgical center who were appropriate.
So really, the classic and aligned incentive play
that that creates savings, and then we share
in the we share in the savings.
That's great to hear. You know, and really
helpful to understand
having that background of, obviously,
knowing what it's like to be in a
bundled payment situation,
having the experience with the outpatient surgery center,
and and shifting cases there, being, you know,
safe about it, and,
making sure that you've got the right protocols
in place, it seems like really, really is
helpful. What other lessons have you learned since
you've launched this bundle?
Well, I think it's just doubling down
on on the just kind of the natural
evolution,
meaning, number 1, we know we're not gonna
get paid more by CMS, the procedure, the
the surgeon.
They're constantly whittling down our reimbursement. So I'm
imagining on the other side of the table,
the ACO is probably also going to be,
you know, given less money per patient to
provide care. And so it's gonna be a
continual,
you know, pursuit of having this aligned incentive
where we need to help each other. We
need to take care of the patient first
and foremost.
We need to adopt,
strategies,
standardized protocols, look at outcomes,
outcomes,
look at referral patterns. I mean, there's a
lot of work that we can con continue
to do over time, but it is it
is difficult because when we're getting paid less
and less and less,
at some point, you know, you throw up
your hands and you say, well, we're you
know, we can't squeeze anything else out of
this. You know, it cost money to do
these procedures.
It caught you know, we have to have
good people. We have to have good surgeons,
good PAs, good nurses, good anesthesiologists.
We have to have good implants. We have
to take care of our people.
And so they're you know, if we keep
whittling the cost down to where we can't
take care of it,
of the folks, then we're we're gonna be
like some of the other countries of the
world where there's very, very long lines. The
care is not as good.
The outcomes are not as excellent, and we
do not want that. So it's just a
continual evolution, but we're gonna keep fighting for,
you know, for our patients.
That makes a lot of sense. And, you
know, it's fascinating to hear about that, kind
of cost progression, especially from,
Medicare side of things. How close are you
to that line where, you know, it's just
really unfeasible to take any more cuts or
absorb any more of the cost reductions as
we've seen,
you know, regularly on annual basis?
Well,
one part of that answer is I know
exactly how much it cost. I know exactly
how much it cost for me to do
a, Medicare total knee in an outpatient surgical
center, what my fee is, how much the
implant cost, how much physical therapy they need,
how much that cost. So I know that.
The prob the problem is that that's the
best, best, best case scenario with a, you
know, very healthy patient. But that's not every
patient. And so the federal government needs to
recognize that not only is that it's a
good target,
but it's a but you have to pay
us to do it. You have to pay
for, you know, a surgeon like me to
do the surgery.
And what they're paying us now, to be
perfectly honest, is is not even adequate. And
so if they reduce it anymore, there already
are surgeons,
who are just not accepting Medicare.
And if that happens, what's the point of
all of this? How are people supposed to
have their surgery done if people are no
longer accept accepting Medicare?
So,
we do know the costs,
but we also know how much, you know,
we should be paid. And so there'll be
a standoff here in the next decade for
sure,
before we start seeing some really long lines
for joint replacement.
Absolutely. I I appreciate that perspective. Thank you
so much, doctor Lucey. Now before we wrap
up here, I'm wondering what advice do you
have for other physicians who are looking to
take advantage of some of the more,
disinformation in the bundled payment program.
How are you continuing to maximize those efforts?
Well, I would say number 1, if you
have a accountable care organization in your community,
you should reach out, and you should sit
down and talk about how to align incentives
to create a value based care play,
with these types of scenarios with joint replacement.
It's a very,
high cost,
episode. It's the number one spend of Medicare
hip and knee replacement. So if you have
an ACO in your community, you need to
reach out. We're happy to help you,
have that conversation with them and give you
advice and some historical perspective.
Second thing I would tell the joint replacement
surgeons out there is you need to know
your spend.
You need to know your outcomes.
There will come a time where,
companies around the around the country who are
not going to pay for insurance for their
employers, they're gonna self be self insured.
That's a very, very fast growing market.
And they will want to know how much
does it cost for you to do a
hip or a knee replacement.
And so you need to know those numbers,
and you need to build those direct to
employer bundles.
And so you just need to become
as well, maybe not as much a businessman
as a clinician, but you at least need
to become a businessman and know your outcomes.
You need to know your costs.
And that's just gonna be the way of
the future.
That makes a lot of sense and and
is really helpful
Doctor Lucy, thank you so much for joining
us on the podcast today. This has been
a fascinating conversation, extremely helpful and enlightening in
terms of how, you know, you can really
take advantage of this type of data and
information in working with CMS. And I appreciate
your time today. I hope, you know, we're
we're able to connect again soon.
You bet, Laura. Thanks for having me.