Dallas-Fort Worth’s largest employers have teamed up to eliminate wasteful healthcare procedures in an effort to force providers to establish best practices and prove that they’re sticking to them when they’re treating patients. And for the providers that don’t, the employers say they will send their people somewhere that will.
The Dallas-Fort Worth Business Group on Health has gathered the region’s largest insurance plans to identify the hospitals, surgery centers, and physician groups providing the most care for lower back pain, or musculoskeletal conditions. These employers—and to scale them: American Airlines, Southwest Airlines, BNSF Railways, Texas Instruments, Sabre, and others with similar clout—have also signed on researchers at the University of Texas at Dallas’ Naveen Jindal School of Management, who will, with input from the providers, develop evidence-based treatment guidelines for lower back pain based on the data-driven Six Sigma approach. So far, they’ve gathered about a dozen providers to get them to explain themselves. Why this MRI? Why this operation? Could physical therapy have worked instead of an injection?
But one thing they aren’t isolating is, on its face, perhaps a bit odd: Cost. This isn’t a price comparison party. According to Marianne Fazen, the DFWBGH’s president, the group seeks the answer to a broader, more cerebral question. What is our money really going toward?
“We’ve not emphasized price because price is a byproduct of variability,” she says. “It’s a byproduct in the sense that if two MRIs are ordered and only one is needed, that jacks up the price. If surgery isn’t needed and surgery is done, that jacks up the price. If one protocol at one spine clinic or provider says you have to have six weeks of physical therapy after the surgery and you only need it for four weeks, that jacks up the price.”
All the major payers in the market—Blue Cross Blue Shield, Aetna, Cigna, and UnitedHealthcare—identified the market leaders in back pain procedures. Eventually, an analyst will be hired to analyze de-identified claims data offered by some of the payers. which will show exactly what they paid out. This cuts through the price negotiations that the payers often have with the providers, the details of which are often are confidential because of the competition between systems. Ideally, the employers will be able to see exactly how much was paid for each procedure, each test, each visit, after they’re done batting prices back and forth.
And orthopedic surgery is big money for providers. According to Irving physician recruitment firm Merritt Hawkins, a single orthopedic surgeon generates his or her hospital $2.75 million a year, more than any other specialty. All the while, the effectiveness of surgery to fix back pain has been questioned by major medical journals. The Annals of Internal Medicine last year found that physical therapy is often as or more effective than surgery for treating lumbar spinal stenosis. In 2009, the Journal of the American Academy of Orthopedic Surgeons recommended physical therapy as the first course of treatment for patients with lumbar degenerative disc disease.
But is that what’s happening?
The Business Group on Health launched this initiative to find that out. And they modeled it off work done in 2007 in Seattle. There, Virginia Mason Medical Center paired with Aetna Inc. and employers like Starbucks and Costco to drill down their healthcare costs after the employers began balking at sending their employees to the hospital. The prices were too high. The decision prompted Virginia Mason to cut down on pricy, unnecessary MRIs and other tests by defining best practices and actually following them, lowering prices while maintaining the coveted patient volume.
The Wall Street Journal dedicated a long feature to the initiative, finding that the hospital’s approach to back pain treatment before the initiative cost about double what the new approach did. Virginia Mason dropped the per-patient physical therapy cost from $2,100 to $2,200 to $900 to $1,000. According to the article, the process streamlined how quickly a patient met with a doctor. Those with complicated back pain were placed in physical therapy, bypassing three steps that the physicians previously followed—no meeting with a specialist, no mandatory diagnostic test, no follow up with doctors, all of which typically occurred before a patient was referred to physical therapy. Same ending, different journey.
But Virginia Mason noticed that this new, more efficient method had torpedoed their spine clinic’s profits. Staffers left, frustrated at the decrease in operations. The hospital brought that information to the table, and argued that the new method was unsustainable. Aetna then agreed to boost the reimbursement rates for physical therapy. The hospital was able to free up staff to see more folks in therapy (400 percent more, according to one person involved in that project), which, with the boost in payments, helped level off the loss in revenue from excess imaging and operations.
The DFW Business Group on Health hired on a consultant who worked on that project named David Toomey, a former president of Cigna Healthcare of Texas who left to dig in the data for Compass Professional Health Services on behalf of employer clients. Toomey, now an independent analyst, helped walk them through what happened in Seattle, how all of it came together because all the stakeholders gathered around the table. And the employers—the ones with the real purchasing power—drove the conversation.
“They have the ability to really drive change in the marketplace,” Toomey told me. “The first time, we didn’t know what the hell to expect. Then we did it and it’s like, whoa, this can work. It should work.”
Fazen is admittedly careful about naming the providers that are participating. “We’re tackling a real snake pit on this,” she says, adding that she fears “all kinds of pushback.” In August, the group invited about a dozen providers to meet to discuss the initiative. The top five by volume were then selected to be part of the first initiative’s first wave. And those groups all met for the first time on Monday—employers, insurers, providers, and the UT Dallas researchers. Fazen hopes to see a definition of best practices by March at the latest. “We have an aggressive timeline,” she says. After that, they’ll begin involving other providers. And the stakes are high.
“In Texas, we can’t keep on this path. We are going to bankrupt an employer,” Toomey says. “Do not blink, employers. You have to hold firm if you want to get meaningful change in this marketplace.”