A Survey of Innovative Reimbursement Models in Spine Care

Abstract

Purpose: The United States spends $90 billion annually on medical expenses for low back pain. One approach to promoting high-quality, cost-effective care is through bundled payments and other reimbursement models wherein physicians are held accountable for costs and utilization. The aim of the study was to describe innovative reimbursement models in spine care and gather perspectives on the future of spine care reimbursement. Methods: Through literature review and discussions with leaders in the field, we identified organizations that were engaged in bundled payment initiatives for spine care and surgery. These included healthcare systems, physician groups, organizations helping to set up bundles, and a large employer. We conducted interviews to understand the background and specific features of each initiative, generalizable success factors and challenges, and perspectives on the future of spine reimbursement. Results: We interviewed 24 stakeholders across 18 organizations that collectively perform approximately 12,000 inpatient spine surgeries annually. Fee-for-service reimbursement accounts for a majority of revenue, but several organizations expect 30% to 45% of their spine volume to be covered under bundled payments within 3 years and cite new patient volume, increased surgical yield, and financial benefits from efficiency improvements as reasons for adopting bundled payments. Current initiatives are heterogeneous, but share similar success factors and challenges. Institutions are more hesitant to adopt risk-based payment models for chronic back care, citing difficulty modeling risk, patient heterogeneity, and difficulty aligning incentives. Conclusions: Payment models outside of the traditional fee-for-service paradigm are emerging in spine care. Providers that preemptively adopt bundled payments can increase patient volumes from payers seeking cost-effective care. Going forward, organizations should begin considering reimbursement models that focus on noninterventional spine care. Finally, developments in spine reimbursement may apply to other procedure-based specialties, including orthopedics and cardiology.