The Potential of Value-Based Care Models and Conservative Care

U.S. families are drowning in healthcare costs. The median U.S. household spends approximately 20% of disposable income on healthcare, with a projection of $6,832 in yearly premiums and $3,306 on out-of-pocket costs such as deductibles, copays, and coinsurance in 2022. Hospital costs alone have risen 600% since 1990.

Add to the picture, employers paid 78% of medical care premiums for single coverage plans and 66% for family coverage plans according to the Bureau of Labor Statistics, Case in point, in 2019 employers spent $810 billion on employee health coverage and are expected to spend $2 trillion per year by 2040. 

Treating Musculoskeletal Pain – The Problem

Despite all the expenditures, Americans are not healthy. In fact, as many as one in two Americans will experience musculoskeletal pain and a corresponding condition. Extrapolating the severity of this scenario are many contributing factors that play off of, and into, each other. 

Example one, obesity. The prevalence of obesity in the United States was 42.4% even prior to the COVID pandemic and the nation’s lockdown. Healthy People 2020 reported that most adults (81.6%) and adolescents (81.8%) do not get the recommended amount of physical activity. This, along with many other root causes, can lead to pain and progressive musculoskeletal conditions.

Example two, opioids. Unresolved pain can result in opioid misuse and other tragic consequences. The CDC reports that in 2019, 20.4% of adults had chronic pain, with 7.4% reporting pain that frequently limited life or work activities. To manage the pain, many Americans resort to opioids, whose short-term use can lead to addiction. It is estimated that 21%-29% of patients prescribed opioids for chronic pain misuse the drug.  Addiction shatters lives and families and can lead to overdoses, which caused the death of close to 50,000 Americans in 2019. Beyond the human toll of the opioid misuse epidemic, the average cost to treat an opioid use disorder is $221,000. That’s just for treatment of this largely preventable disorder. The total "economic burden" of prescription opioid misuse in the United States is $78.5 billion a year, including the costs of healthcare, lost productivity, addiction treatment, and criminal justice involvement.

Varieties in clinical presentation of a patient’s musculoskeletal condition are numerous, as are the choices regarding how to treat the underlying pain and what type of provider should perform the treatments. All variations included, the health system spends over $200 billion each year treating these disorders. 

Levers to control these costs exist today, and are powerful. Utilization management, benefit design, coordination of care, and reimbursement models are a few of these tools. The solutions will continue to evolve in tandem with the exponential growth of musculoskeletal conditions and underlying comorbidities. One area ripe with opportunity is in establishing innovative value-based care models.

Opportunity for Change

Currently, many plans offer drugs at a $20 copay for a month’s supply, while physical therapy can entail upwards of a $50 copay per visit. Given a choice, a patient with limited means may feel compelled to take the less costly short-term alternative. What if care pathways and out-of-pocket costs are aligned to incentivize conservative management for musculoskeletal conditions? As a thought experiment, assume patients see a physical therapist first, and then, only the patients who “fail” to progress with physical therapy will access the traditional system of more expensive diagnostic procedures, surgery, and prescription medications. Part of a solution to this thought experiment could include designers of benefit plans (1) incorporating lower copays and immediate access to evidence-based physical therapy, or (2) helping to promote awareness of existing benefits that a patient may be unaware of. This model could create substantial savings and better outcomes for a host of musculoskeletal interventions. 

Take for example the most common elective orthopedic procedure: total knee arthroplasty (TKA).  Close to 600,000 knee arthroplasties are performed in the U.S. each year, with an average cost of $30,000 per procedure. The Osteoarthritis Initiative of the National Institutes of Health has been tracking TKA specific to osteoarthritis for 11 years and estimates that 34% of cases of knee osteoarthritis were inappropriate for surgery and could have been effectively managed conservatively. That means in any given year if more than 200,000 of these patients had been referred to physical therapy instead of surgery, physical therapists could have saved the healthcare system $6 billion dollars in unnecessary surgery costs. Additionally, because so many postoperative patients are prescribed opioids for pain, early conservative treatment could help the patient and society avoid the burden of opioid misuse. It is estimated that 25% of patients given an opioid prescription go on to chronic abuse. If, for example, 25% of the patients who are prescribed opioids for pain following unnecessary TKA surgery became addicted, that will likely cost our healthcare system an additional $11 billion.

Value Based Care ‒ The New Model

Healthcare service delivery and payment models are changing, and there is an opportunity to place greater emphasis on value. Value can be defined in a number of ways, but in simplistic terms, it refers to better outcomes at the best cost. Current healthcare delivery models often reinforce historical paradigms, such as requiring a physician visit to initiate care for a musculoskeletal condition, and reimbursement for that visit on a fee-for-service basis. Both of these can lead to inefficient utilization of resources. 

What then, would a new paradigm look like? One in which the definition of value is established with all constituents in mind but centered on the true health outcome of the patient. This is achieved by defining a set of value measures, based on clinical evidence and supporting outcomes data. This data set can establish thresholds to support patient treatment pathways, and reward providers who meet or exceed these benchmarks. If a provider fails to meet a benchmark, then they are held accountable to those outcomes. 

The potential result:

1. The provider shares responsibility for high-value care
2. Employers and insurers align interests through collaboration with providers in developing fair and equitable benchmarks
3. Consumers’ experience continues to improve as competition drives innovation and high-quality affordable care. 

The Future is Bright 

Beyond the evidence for this type of system change, experience in every state demonstrates that the time is right to re-evaluate the time-honored approaches to the management of musculoskeletal conditions within the current healthcare system.

Doing so will create value for all—patient, provider, and payer.