Clinical Orthopaedics and Related Research®

, Volume 470, Issue 4, pp 1027–1037 | Cite as

Using Financial Incentives to Improve Value in Orthopaedics

  • David Lansky
  • Benedict U. Nwachukwu
  • Kevin J. BozicEmail author
Symposium: Value Based Healthcare



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.


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.


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.


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.


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.


Financial Incentive Cost Sharing Reference Price Comparative Effectiveness Research Payment Model 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.



The authors thank Vanessa Chiu for her assistance in preparing and editing this article.


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Copyright information

© The Association of Bone and Joint Surgeons® 2011

Authors and Affiliations

  • David Lansky
    • 1
  • Benedict U. Nwachukwu
    • 2
  • Kevin J. Bozic
    • 3
    • 4
    Email author
  1. 1.Pacific Business Group on HealthSan FranciscoUSA
  2. 2.Harvard Medical SchoolBostonUSA
  3. 3.Department of Orthopaedic SurgeryUniversity of California, San FranciscoSan FranciscoUSA
  4. 4.Philip R. Lee Institute for Health Policy StudiesUniversity of California, San FranciscoSan FranciscoUSA

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