New Marketplace

Surgical Value — Beyond Bundled Payments

Article · October 30, 2018

Surgeons can create value along the entire procedural episode in each of the four phases of care: from preoperative optimization, intraoperative care, postoperative hospitalization, and post-acute/post-discharge care. Episode-based payments, such as the Comprehensive Care for Joint Replacement (CJR), create incentives to reduce waste and improve care during these surgical events. While bundled payments hold promise, they are limited in what they can achieve. To truly harness the power of surgical care to improve value, we need to focus the effort of the surgeon on the whole population.

Why? Because great surgeons have impact that goes far beyond the specific surgical episode. But we have seen too little attention paid to this kind of approach. The latest data on surgical engagement in Accountable Care Organizations (ACOs), which were formed to take responsibility for the costs and the well-being of an entire population, is disheartening. Most ACOs are paying too little attention to surgical care. Indeed, beyond the lack of attention, there is substantial variation in surgeon leadership within ACOs, and governance and surgical care are too infrequently addressed in ACOs’ strategic plans.

Given that specialty care is a major driver of health care expenditure, this omission seems shortsighted. Here are three strategies for value creation by surgeons that go beyond bundled payment.

Make Decisions Based on the Big Picture

While good surgeons know how to achieve good surgical outcomes, great surgeons know when not to operate at all. “Going upstream” to prevent unnecessary surgical interventions occurs too infrequently and is often seen as the job of primary care physicians. But some leading health care providers are taking a very different approach. The CORE Institute in Arizona, for example, has a capitated contract to provide musculoskeletal services for a population and has seen costs reduced dramatically through a decrease in surgical intervention rates and a focus on conservative management. Surgical expertise applied to what are usually problems managed by primary care physicians has meant that surgeons can intervene before surgery becomes unavoidable.

Some surgeries, even when clinically reasonable, can be avoided through shared decision-making, where patients understand the likely risks and benefits of different approaches to clinical problems. The data suggests that under shared decision-making, patients often opt out of surgical procedures because of their values. Too little of the policy attention has focused on shared decision-making (only one of the 33 ACO quality measures includes shared decision-making).

Regardless of the effect on cost, or utilization, a high-quality surgical decision is arguably a surgeon’s most important role and should be grounded in a medical diagnosis as well as a preference diagnosis — “an inference of what the patient would choose were they sufficiently confident and well informed to decide on their own.”

Eliminate Low-Value Services

A second approach that surgeons can use to reduce waste is to focus on truly necessary services. Surgeons can continue to work with payers and clinical commissioning groups to define high- and low-value services and procedures for the population, e.g., asymptomatic inguinal hernia repair, routine endoscopy in patients with uncomplicated diverticulitis. Medical management of many of the problems that were historically seen as only surgically fixable often generates results that are comparable. A great surgeon can work to eliminate the use of these low-value services across the health care organization.

Look at the Long Term

Finally, collecting and acting on longer-term outcomes data will inform decisions at the commissioning level, as well as at the clinician-patient interface, delivering care that simultaneously works for the patient, and indirectly, the rest of the population. Current bundled payment schemes tend to focus on the early postoperative period (the length of most bundled payments is 30 days, though for some, such as the CJR, it is 90 days).

This can have unintended consequences. For example, a cheaper prosthesis in total hip replacement may have equal short-term postoperative outcomes but a higher risk of long-term complications and adverse effects on functionality. High-value surgeons will think about the long run, and approach clinical decisions based on the best long-term outcomes. Bundled payments and other reform efforts should take these longer-term periods into account.

The surgeon has a crucial role in defining value for patients in a population — and not just when that patient is in need of the surgeon’s knife. Undoubtedly, a surgeon can improve value through patient preoperative optimization and surgical planning, intraoperative technical excellence, safe and timely in-hospital postoperative care, as well as appropriate levels of rehabilitation. However, improving outcomes per dollar spent will require a broader view of the integrated care delivery system — the quality of surgical decision-making, a focus on overall surgical intervention rates, working across clinical silos with expert teams at different locations, consideration of high- and low-value services, as well as the collection of, and response to, data on longer-term operative, and nonoperative, outcomes.

New call for submissions ­to NEJM Catalyst

Now inviting longform articles


A weekly email newsletter featuring the latest actionable ideas and practical innovations from NEJM Catalyst.

Learn More »

More From New Marketplace
Elements of a Sustainable Complex Care Management Contract

Sustainable Financing for Complex Care Management Is Critical to a Value-Driven Health Care System

Care management should be payer-agnostic at its core.

Comparison of Certain Model Features in Blue Cross NC Blue Premier vs Next-Generation ACO Model vs BCBSMA Alternative Quality Contract

Engineering a Rapid Shift to Value-Based Payment in North Carolina: Goals and Challenges for a Commercial ACO Program

We believe North Carolina can be a model for the nation.

Small Molecule Drugs Facing Generic Competition - Orphan and Non-Orphan Drugs - Orphan Drug Act

It’s Time to Reform the Orphan Drug Act

Three proposals for improving the law to reflect 21st-century drug development practices.

Three-Part Pricing of PCSK9 Inhibitors

A New Model for Pricing Drugs of Uncertain Efficacy

Are we paying too much for new drugs before we know how well they work? This innovative pricing model proposes postponing major rewards until efficacy is established — which could help both patients and payers while still paying back investments on the most effective drugs.

what does quality measurement in health care mean

Buzz Survey Report: Addressing the Problems of Quality Measurement

An independent NEJM Catalyst report sponsored by University of Utah Health on patient involvement in quality measurement.

Average HOOS and Average KOOS for patients undergoing hip and knee replacement at CJRI

Building a “Hospital-within-Hospital” Model for Joint Replacements

The Connecticut Joint Replacement Institute has demonstrated that formerly competing independent providers can unite on a common vision to yield drastic improvements in quality, safety, and costs.

Discharge Rates and Follow-Up Internval Dashboard for One Provider at MGH Dermatology

A Successful Pilot to Improve Access by Adjusting Discharge and Follow-Up Rates

Actionable data and modest financial incentives can help motivate clinicians to adjust their behavior around scheduling follow-up appointments.

Cautious Optimism That Value-Based Reimbursement Will Become Primary Revenue Model

Survey Snapshot: What Would Accelerate the Adoption of Value-Based Care?

NEJM Catalyst Insights Council members weigh in on the barriers and path forward to value-based health care.

Strongwater08_pullquote primary care value proposition and disruptive innovation

The Evolution of Primary Care: Embracing Innovation While Protecting the Core Value

Primary care must leverage disruptive innovations to ensure that patients receive first-access, comprehensive, coordinated, continuous care that is woven into a seamlessly integrated system.

Berns01_pullquote nephrologists dialysis facility joint venture conflicts of interest

Dialysis-Facility Joint-Venture Ownership — Hidden Conflicts of Interest

Despite potential benefits, joint ventures between nephrologists and dialysis companies raise legal and ethical concerns because of participants’ conflicts of interest and lack of transparency.


A weekly email newsletter featuring the latest actionable ideas and practical innovations from NEJM Catalyst.

Learn More »


Value Based Care

199 Articles

Curbing Health Care Spending: The Provider’s…

Health care costs have historically grown at about 2% faster than income in the United…

Medicare and Medicaid

122 Articles

A Collaborative Model to Expand Medicaid…

How managing the benefit coverage expansion for the treatment of HCV in New Mexico was…

Vertical Integration and Bold Experimentation

Four points on improving value in health care via vertical integration and aggressive experimentation.

Insights Council

Have a voice. Join other health care leaders effecting change, shaping tomorrow.

Apply Now