The buzzwords "Volume to Value" are used throughout the health care industry. In my opinion, the issue isn't the fee for service payment model. Sure, that model has lead to increased cost of care, yet there is something else is far more bothersome. For musculoskeletal conditions, the problem is more than rewarding for doing more.
Virginia Department of Human Resources published a General Assembly Report on June 30, 2014. I organized the numbers a bit differently to help me better understand where musculoskeletal spending occurred. As you can see, by far, the largest chunk of money is spent on inpatient procedures.
As I have read in multiple research articles, physical therapists are only involved in the care of people who have musculoskeletal problems about 7-15% of the time. In this report, it was noted that physical therapy claims only represented 10% of the total cost for musculoskeletal conditions.
What really needs to happen to truly reduce costs is for the pyramid to change. Payers should desire to have the huge portion of the pyramid to be dedicated toward physicians and physical therapists. What the payer should desire are smaller and smaller percentages of claims paid out for pharmacy, imaging, outpatient procedures and inpatient procedures.
What is the percentage tipping point of having a physical therapist involved in musculoskeletal care that leads to far less spending in additional claims? What if physical therapists were involved 50% of the time? If treating low back pain began to cost $1,500 just by having a physical therapist involved, imagine the savings. The rest of the pyramid becomes negligible.
As we enter into value based purchasing and we begin negotiating contracts, we definitely do need to deliver quality of care for each and every episode of care. We need to know what we can deliver: how much change over how many visits. Besides focusing on our own silo of care, we need to recognize how the current musculoskeletal pyramid is out of whack and leading to higher costs also. I'd suggest the payer needs more skin in the game. The new model needs to be a "collaborative risk model."
If the payer truly desires to reduce costs and enter into cost-saving arrangements, the payer has to have some level of accountability to cause the pyramid to shift to be in align with value. Why focus on a contract that is only based on what a provider will do? I'd request that the payer be accountable by reducing financial barriers for subscribers to access physical therapists. Payers should be more than willing to eliminate deductibles and copayments for physical therapy services. Payers should be happy to eliminate clinician burdens: the requirement for physician referral and signed plans of care. Why require progress notes every 30 days? Payers should also consider eliminating supervisory requirements. Clinicians should be allowed full control in being innovative in delivering quality care. Payers should be required to educate their subscribers to choose physical therapists.
A collaborative risk model would stipulate what the provider will deliver along with how the payer will support the efforts for success. The payer should be financially penalized if the payer does not uphold its role. The provider should definitely have substantially increased payments if goals are met. If a payer is currently willing to spend $25,000 to $59,000 for inpatient surgical procedures and a provider substantially reduces this occurrence, the payer should be willing to reward for savings.
If you are searching for a solution to help you know exactly what you deliver, look no further. Please talk to Judy Holder about how FOTO can help.