Our recent article Developing a Modern Orthopedic Destination Center examined the importance of developing a robust orthopedic service line in the face of increased competition, value-based payment models, and the migration of cases to outpatient settings. A service line capable of converting these threats into opportunities will be characterized by operational efficiency and value for patients—in other words, being able to provide higher-quality care at lower costs.
Improvement in orthopedics is best
achieved with the support of engaged orthopedic surgeons. To enhance physician
engagement and improve orthopedic outcomes, many health system leaders have invited
surgeons to help manage the service line.
Understanding Comanagement
A comanagement agreement is a collaborative approach to paying for quality and performance. Under the terms of a comanagement agreement, hospitals contract with physicians to manage care delivery for a given service line in partnership with hospital leadership. The surgeons are incentivized to achieve target goals for agreed-upon performance measures.
If you’re pursuing a comanagement agreement within your orthopedic service line, committing time and effort to its planning and development will be critical to its success. Below are five steps for getting started.
1. Select the appropriate physician group(s).
The most important part of developing your orthopedic comanagement agreement is choosing which surgeons to include in the program. Members of the comanagement team should share a vision and goal of improving the service line. Consider whether each individual can make a positive impact on the service line and be a team player with other surgeons and administrators. Include surgeons who are truly committed to improving your system’s orthopedic service line, not those who are just seeking an additional source of income.
After you’ve selected the appropriate orthopedic surgeons for your comanagement agreement, demonstrate your commitment to collaboration. Involve them in the planning process so that they have input in important areas such as selecting incentive measures or creating and filling committees. Empower them to make decisions (you’re asking them to manage your service line with you, after all). This commitment to collaboration will build physician engagement and set the comanagement agreement up for success.
2. Define success metrics and review ROI expectations with hospital leadership from the start.
Initiate financial discussions with hospital leadership early in the process to familiarize them with the concept and gain agreement on the anticipated level of investment. Hospital leadership must be comfortable investing in comanagement while understanding that there may not be an immediate financial return. Rather, these agreements often result in improved physician-hospital alignment, greater operational efficiency, and quality-of-care enhancements—many of which will be difficult to quantify, initially. These initiatives can offer tremendous benefit to the system, but the return may need 6 to 12 months to realize. Holding these discussions early in the process and clearly defining their ROI thresholds and success metrics will help you avoid unnecessary setbacks or delays.
3. Incorporate the appropriate case mix into the program.
A common challenge in developing a comanagement program is identifying the most meaningful case types and specialties to include without biting off more than you can chew. Set some parameters before committing to include all types of orthopedic specialties in the program. Clearly define whether the initiative will be inpatient or outpatient based or both, which DRGs and CPTs should be included, and which orthopedic subspecialties to include. During your first year, it may make sense to limit the scope of the agreement to ensure success, with the option to add cases types and subspecialties in subsequent years.
These decisions may also affect how many and which surgeons can participate in the agreement. For example, including spine cases in the agreement introduces the possibility of expanding the scope to include neurosurgery. Additionally, your planned orthopedic comanagement agreement will likely generate some buzz in your organization, which may lead to curiosity, confusion, or even jealousy among the other physicians. Issues such as these can pop up in the middle of the development process and disrupt or limit the success of the initiative. Make sure everyone is working from the same playbook from the start and be clear on what’s in and what’s out.
4. Decide between a system-wide or site-specific agreement.
Similarly, as you develop your program, determine whether your comanagement agreement will be system-wide or hospital-specific (if your system has only one hospital, you’re in luck, as this is one less friction point to navigate).
Several factors will help you determine whether you should have a single, all-encompassing agreement or individual agreements with each hospital.
- If your hospitals are in close proximity to each other and have a similar patient population, it may make sense to create one system-wide agreement. This scenario likely means that the orthopedic surgeons perform cases at multiple sites within your system, which would make it easier to standardize protocols and create initiatives across the system. Additionally, if your system is focused on integration and cultivating “systemness,” a system-wide orthopedic comanagement agreement can be an effective mechanism for aligning the orthopedic service line under one umbrella.
- Conversely, if your hospitals are dispersed geographically or see different patient populations, or if the orthopedic groups perform cases at one specific hospital, the best option may be separate, hospital-specific comanagement agreements.
- In a multihospital system, it is likely that one or more of the hospitals’ performance is not on par with the rest of the system. One option might be to carve out a separate arrangement for the underperforming hospital(s). Another option would be to push forward with a system-level arrangement, but tailor the incentives to the low-performing hospitals. It is important to understand both the primary and the secondary effects of either option, including physician behavior.
Accounting for these considerations early in the process will avoid confusion and potential biases toward one location over another. Understand that there are risks with either option and that physicians may self-select where they perform cases based on where the most favorable comanagement agreement exists.
5. Select the right measures.
The last feature to consider for your comanagement agreement is the compensation tied to achieving target goals for specific incentive metrics. Deciding which and how many metrics to include in the first year can influence how both surgeons and administrators perceive the program’s success.
As previously mentioned, it is essential to select metrics in collaboration with your orthopedic surgeons; however, for the incentive portion of the agreement to succeed, surgeons need to agree on the data sources and definitions, validate the calculations, and believe that the chosen metrics will have an impact. Because metric selection is important for gaining surgeon buy-in, consider tying the performance measures into other existing and adjacent performance improvement efforts. This is often an effective approach, as it financially incentivizes surgeons to make improvements in areas already identified as important to the service line. It also eliminates the additional burden of creating processes for collecting and validating new data.
After you’ve selected the appropriate performance measures, choose target goals that are both reasonably attainable and capable of driving the desired improvement. If target goals are too ambitious, your surgeons may become discouraged and lose interest in the program. To ensure the metrics and targets are equitable to the surgeons and hospitals, they must be locked in for at least one year. After the first year, if there is little to no improvement opportunity left for a certain metric, consider replacing it with a new measure (as the surgeons typically can only be paid for making improvements). Or, if there are metrics that are critical to sustaining high levels of efficiency and improved patient care, consider defining these as “maintain” metrics with ongoing inclusion, but at a lower percentage of the incentive.
Moving toward Implementation
The five steps described above establish the groundwork for a successful orthopedic comanagement agreement. Once the framework for the agreement is created, it will be important to implement several key steps to get the program off the ground.
To learn additional keys to success for your orthopedic comanagement agreement, stay tuned for our next blog post.
Published October 7, 2020