, Volume 470, Issue 4, pp 1027-1037
Date: 15 Oct 2011

Using Financial Incentives to Improve Value in Orthopaedics

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Abstract

Background

A variety of reforms to traditional approaches to provider payment and benefit design are being implemented in the United States. There is increasing interest in applying these financial incentives to orthopaedics, although it is unclear whether and to what extent they have been implemented and whether they increase quality or reduce costs.

Questions/purposes

We reviewed and discussed physician- and patient-oriented financial incentives being implemented in orthopaedics, key challenges, and prerequisites to payment reform and value-driven payment policy in orthopaedics.

Methods

We searched the MEDLINE database using as search terms various provider payment and consumer incentive models. We retrieved a total of 169 articles; none of these studies met the inclusion criteria. For incentive models known to the authors to be in use in orthopaedics but for which no peer-reviewed literature was found, we searched Google for further information.

Results

Provider financial incentives reviewed include payments for reporting, performance, and patient safety and episode payment. Patient incentives include tiered networks, value-based benefit design, reference pricing, and value-based purchasing. Reform of financial incentives for orthopaedic surgery is challenged by (1) lack of a payment/incentive model that has demonstrated reductions in cost trends and (2) the complex interrelation of current pay schemes in today’s fragmented environment. Prerequisites to reform include (1) a reliable and complete data infrastructure; (2) new business structures to support cost sharing; and (3) a retooling of patient expectations.

Conclusions

There is insufficient literature reporting the effects of various financial incentive models under implementation in orthopaedics to know whether they increase quality or reduce costs. National concerns about cost will continue to drive experimentation, and all anticipated innovations will require improved collaboration and data collection and reporting.

One or more of the authors (KJB) have received funding from the Orthopaedic Research and Education Foundation (Rosemont, IL, USA).
This work was performed at the Pacific Business Group on Health and the University of California, San Francisco.