Advancing Value-Based Care in Musculoskeletal Health with Dr. Jason Scalise

[MUSIC] Just five years ago, a big portion of what's now being done in ambulatory surgery centers wasn't considered outpatient work. The cases have changed, the tech has changed, the patient expectations have changed, and the leaders who are thriving are the ones who saw it coming. Becker's 23rd annual spine orthopedic and pain management driven ASC conference exists for exactly that kind of forward looking practitioner. Here Becker's hosts more than 1,000 attendees, 275 physician and ASC speakers, and three days of sessions, the move between the clinical, the operational and the strategic, and the CME credits to show for it. Join us June 11 through the 13th at the Swiss Hotel in Chicago and come ready to think about what's next. Register on our events page at becker's hospitalreview.com by clicking on the events tab in the upper right. [MUSIC] This is Laura Deerdo with the Becker's Healthcare Podcast. I'm thrilled today to be joined by Dr. Jason Scalise, chief value officer for Habco. Dr. Scalise is a pleasure to have you on the podcast today. >> Thanks so much, happy to be here. >> Absolutely now. I'm excited for our conversation. I know we're going to talk a lot about some of the really cool things you're doing at Habco's, the recent expansion as well as what's on the horizon. But before we dive in, can you just help a little bit more about yourself and Habco? >> Sure, happy to. As you mentioned, Jason Scalise. I'm an orthopedic surgeon by background. I'm a shoulder surgeon, fellowship trained shoulder surgeon, and I've been with Habco for about 20 years. Still actively practiced, but my role at Habco primarily is as chief value officer, where I oversee all of our national, value-based care initiatives and platform. We focus on the Muscle Skeletal Space as an orthopedic surgeon, lead and created organization. And in the value-based care component, we're known for developing and deploying and managing a whole variety of different alternative payment and value-based care programs, including full Muscle Skeletal population health platforms, which are rather unique. But the hallmark of those programs is it helps physicians in the Muscle Skeletal Space and their practices lead the value-based care efforts in a way that is very sustainable, but also puts the patient's interaction and the clinical indications for patients that we care for at the top. >> That makes a lot of sense. It's really cool to have that type of organization already set up, where you're looking at value-based care, where you can support physicians on their journey in that direction, and then also really keep a close eye on what's going to be most meaningful for patients as well. Could you walk us through a little bit of the recent expansion that you've done into Indiana, Kentucky, Ohio, Oregon, and Virginia? What made those markets the right next step for your platform and how are you doing there? >> Yeah, that's right. We're pretty excited about that. In fact, we just launched those programs within the last week, so on July 1st, officially. And those markets, as you mentioned, Indiana, Kentucky, Ohio, and Virginia, and we're adding Missouri and Colorado at the beginning of 2027. All of those markets represent a good expansion of our platform that we've been doing in other regions. They certainly have a substantial population base in each of those markets. They also, as we look and work with risk-bearing entities and payers, we're able to ingest through our medical economics and analytics platform all of the historic claims data for their membership. So this could be hundreds of thousands or millions of lives. And look at the historic spend utilization and quality of all aspects of muskle skeletal care, regardless of who has rendered the service or where that service is rendered. So anywhere from a PCP visit for low back pain to complex orthopedic trauma care at a tertiary facility. And everything in between is muskle skeletal care. But generally, what we find is that much of the initiatives are based either just within the surgical episode and focus just on what happens within the confines of the orthopedic physicians, you know, purview, or there are some initiatives that are solely what you might call upstream with, you know, digital patient engagement and physical therapy first. And any of those models have their, have their, you know, positive attributes. But when we are able to look at the entire cost of care and the care journey across entire populations, what we see in the markets that I mentioned is still a fair amount of variation of cost, spend, and utilization, which generally means that there's opportunities to align around evidence-based best practice standards, which as orthopedic providers, we're actually quite adept at elucidating that and following that, you know, academy best practice standards or specialty society best practice standards. And we've always felt that the muskle skeletal physicians are in the best position to help dictate what is high quality in the best patient interest clinical care. And so, again, to answer your question, when we look at those markets, in particular, and there's a lot of markets that that fall into this category too, we find that the payers in question are looking to find solutions that are more progressive and more durable and sustainable than some of the other models that have been characterized as maybe, you know, a race to the bottom or, you know, diminishing returns. And these markets in particular have embraced what we've seen as highly successful in other regions. That's great to hear. You know, really, fortunate that you've been able to build such a successful business model, and then looking at, trying to bring it into new markets, trying to figure out how you can scale and grow in a meaningful way. I'm curious, as you were looking into some of these new markets, what made them really stand out to you? What is kind of the prerequisite that needs to exist in that space? And then how do you kind of bring in scale your secret sauce in a way that's meaningful? Yeah, I think, you know, every market, although can be a little bit different in every population, can be a little bit different. There's always common themes, especially in muscle skeletal care. And one of the things that we continue to see around the country is an increase in overall cost of care in ways that can otherwise be more streamlined. And one of the things that we do is that as we manage the total cost of muscle skeletal care, and we do that on a per-member per-month basis. And if you think about it that way, that that's truly, you know, population health for the muscle skeletal spend. So we will look at the entire compendium of muscle skeletal care defined by the roughly 30,000 ICD-10 codes that have something to do with muscle skeletal care. And we'll be able to determine what the cost utilization and quality outcomes has been for that particular population over time, say over the last three years for this particular population across Ohio, for example, or Kentucky. We'll then be able to reference that historical performance against demographically matched and performance matched benchmark data. We'll be able to determine what the cost utilization and quality could have been or arguably should have been in that benchmark data. What that delta is, what that delta is worth in dollars, and who down to the individual provider or facility in that market is largely responsible for helping drive that delta one way or the other. That then allows us to create a roadmap of where opportunities are in a market and some opportunities and, you know, in some populations clinically unindicated, excessive use of post-acute skilled nursing facility is still prevalent. Another market in populations, that's less of an issue. In some populations, there's still quite of opportunity to find more appropriate site of service. So, for example, lower cost and the Tory surgery centers for clinically indicated patients and clinically appropriate patients in that setting versus more expensive settings. So you get this, again, like a roadmap or an opportunities list that can be defined and specific for that market. And one of the things that we've been known to be able to do is not just understand where the opportunities are, but then develop that into an operational plan where we can go into the market and help operationalize those tasks, those goals by working with physicians in the market. One of the things that is critical to that is the way that we develop musculoskeletal physician-led clinically integrated networks. And those clinically integrated networks help align the physicians. and even the PCPs because the PCPs actually treat a lot of the muscle skeletal care, the low back pain, the knee pain, etc. They may not do the surgery, but they certainly are involved in a lot of the front line treatment. And if you align the physicians and the providers across that region around best practices, we can reliably start to show where savings can occur. And then our model, which makes it very unique and powerful, is a portion of those savings can be returned to the high performing providers in that market on a earned performance basis. And so that when you put that all together, you have a scenario where we can, as collaborators, now drive savings and instead of those savings only going back to the payer, they can be used as incentives to align around high performance and best practice in a way that's generally not available to high performing physicians. And we do that in conjunction with their existing contractual arrangements that they may have with the payers. So it's not instead of, but it's additive to, and therefore, easy to engage with low friction that ultimately helps drive much better performance across the markets. I love it. It makes a lot of sense. And you know, thank you so much for explaining that a bit deeper in thinking through what it actually shows up as and looks like for the physicians and practices that you're working with. Now, what are some of the headwinds as well as opportunities that you anticipate will arrive in the next year or so? It's a good question because, you know, I can use some of our historical experience to kind of maybe illustrate that. I'll give an example in Arizona. So we've had a musculoskeletal clinically integrated network in Arizona for many years now. In fact, it's a, as a URAC accredited clinically integrated network. I believe it's still the only specialty care CIN, accredited CIN in the country. And that clinically integrated network is comprised of orthopedic providers from around the state. About half of the more than 50% of the orthopedic providers around the state participate, it addresses well over 90% of the state's population from a time and distance perspective. And all of the physicians, there are different practices from across the region. They might consider themselves to be frankly competitors in the orthopedic practice space, which is fine, healthy competition in their region. But within the clinically integrated network, they're all collaborators around best practices, clinical indications, and so on. That clinically integrated network has been successful in working with payers in that region to do the things that I had mentioned earlier by looking at entire populations of patients and managing the total cost of MSK spend and value across the board. And then the savings that have been generated are delivered on a earned quality performance basis back to the participating providers in the clinical integrated network. And the headwinds, frankly, can be that this is a very novel concept. And we've designed it in such a way that orthopedic providers and PCPs for that matter can engage with it without being it to administratively or any administratively burdensome. Because if you try to convert a standard orthopedic practice into a per-member, per-month financial reimbursement arrangement, it just is a bridge too far. It's not a way that orthopedic practice can engage generally. The revenue cycle platforms don't engage in that way, and that's totally understandable. But there are ways to then interpret those programs in a way and translate them in a way where the physicians and MSK leaders who are the experts in MSK care can really lean in and utilize the infrastructure, the analytics, the network management, the care navigation, and so on that we have and really become champions in their region in a way that would otherwise be cost-prohibitive or too time-intensive for the to-do. So we think of ourselves as providing not only the infrastructure, but all of the operational mechanics so that the high quality physicians can continue to perform at high standards and not have to retool an organization in order to accommodate a new pair program. That alone is very, very different and you could see that as maybe an advantage or a headwind. I think initially once physicians understand how straightforward this is to be able to engage and continue to do the high quality things that you already do. Here are some additional insights and analytics that you would likely never have access to, but now you do. And here are some of the predictors that we can see of success that unlock not only things like quality incentive bonuses, but perhaps more importantly unlock a high quality patient experience and high quality outcomes. That's where you can kind of flip the script and make what is a sort of a very novel process, but make it into something where physicians can see this is a way for for musculoskeletal providers to really influence what value-based care looks like in a way that is the most meaningful and the most sustainable for their patients. Yeah, I think that makes a lot of sense and you know it is really zoning on the things that the surgeons really need to be able to do but aren't necessarily in their wheelhouse or within their toolbox of things that they've been prepared to do over time. So I appreciate that analysis and talking through some of the costs and the challenges associated with really digging into the value-based care models. Now could you tell us a little bit more about the evidence behind your model, what is driving the level of enthusiasm from payers, as well as risk-sparing entities right now when you're looking at orthopedic procedures? Yeah, for sure. Well, number one, you know, we've been managing these programs and deploying them for well over a decade now and I think, you know, that experience is pretty unique and we have a long track record of driving savings in these type of clinically integrated network models and total costs of musculoskeletal care models. You know, we've been one of the largest popgo's been one of the largest conveners of orthopedic bundles in the country too but where we like to spend most of our time is in these, I think, much more sustainable and broad programs because the amount of change that we can affect in a positive way is much broader than just say within the confines of a 90-day surgical episode. I think those are fine too and to the extent that there is savings and value and better patient outcomes and experience to be found within that 90-day episode, we should do that all the time. But our point of view is we don't have to stop there. We can engage with primary care providers and help educate around best practices so that unnecessary advanced imaging, for example, can be mitigated, unnecessary referrals to of a patient referral to the emergency room for something that could otherwise be managed on an outpatient basis. All of that not only drives a better patient experience but of course, meaningfully drives savings and efficiencies across the board. I think, you know, when we look at some of our models in this respect, we've seen a true bending of the cost curve, the thing that results that organizations and payers are and even our federal government as relates to healthcare is looking for all of the time. And we've seen that time and time again in our models across broad populations. I can give you an example. If we looked at a program where we had roughly 120,000 lives across a region, which isn't a particularly large network, the programs that were launching this month exceed a million lives. But regardless, 120,000 lives are so seeing a change, a positive change in the overall trend of musculoskeletal spend of greater than 20% such that the cost of care had reduced by 20% in that population to the point where it was actually becoming less expensive year after year for that population patients. That was in a market that was otherwise considered to be highly well managed because it had a history of bubble payment initiatives in the past and the conventional wisdom was there was no way to save any additional money in this market. Everything's been totally optimized. But when you look at it from the lens of a population, and not just from the lens of an episode of care. There is tremendous opportunity when you align musculoskeletal specialty physicians with their upstream PCP colleagues and you help minimize for patients and the system overall, the friction that can sometimes occur in our healthcare system just by its very nature. And that ability to not only drive additional savings but demonstrable and objective, better patient outcomes, that's the true definition of a high value program. - That makes a ton of sense. And looking at those numbers, that's incredible to see, it improvements in just really have that opportunity to work in the musculoskeletal space and have the whole ecosystem understanding what's gonna be most valuable for the patient and then add the most to the healthcare system while bending the cost curve appropriately. Before we wrap up here, where do you see the specialty value-based care headed next and what will separate the organizations that succeed at scale from those that don't? - Yeah, I think there's a lot of signals that you can see out there that are indicating where specialty care and specialty value-based care is heading. Number one, it's quite clear by all of the commentary that payers and risk-bearing entities are looking for increased accountability by the providers. What I would say is that accountability, although makes sense in that we should all be aligned. That accountability also is better suited when there is substantial operating infrastructure and tools that the stakeholders can use to, let's say, hold themselves accountable. And I think that's often a missing piece. In a world where high quality, consistent and accurate data can often be elusive in our healthcare system, and certainly the timely nature of that data is very elusive typically to just then stick on a expectation of accountability, I think is largely not only somewhat misplaced, but it doesn't necessarily accelerate the ability for those organizations to hold themselves accountable in sort of a missing ingredient. We have always looked at being an operating infrastructure to be able to help not only physician organizations lean in, and as I mentioned earlier, to be champions of durable value-based care initiatives that truly deliver value to the patients, and to be champions in their region, but on the flip side, be a bridge for risk-bearing entities and payers to deliver these types of programs to physicians and physician communities in a way that would otherwise be elusive or hard to reach. And so I think you will see that in order to have the ability to truly scale and provide these solutions on a population basis and stay away from the sort of very small incremental, or I should say smaller, and incremental programs that create somewhat of a patchwork of opportunities, you'll need not only that level of analytics, infrastructure, operating ability, and to be able to scale that down to the individual in counter-level, but also be looking at populations at the same time. That ability to dial the thermostat, if you will, down to the individual and to the population is something that we're known for, but I think in my view, that's a requisite to be able to scale these programs and have them be as successful as we have been over the last decade or so. - I love that. Dr. Scolese, thank you so much for joining us on the podcast today. This has been such a fascinating conversation. I really appreciate learning more about Hobco, some of your recent growth, and then looking into the future where you really see some of the big opportunities in ways that orthopedics can become a more valuable specialty. Thank you so much for your time, and I look forward to connecting with you again soon. - Absolutely, my pleasure. Thank you.