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Why orthopedic ASCs, physician groups should get on the direct-to-employer train

As the healthcare industry continues to move away from fee for service and toward value-based care, alternative payment models are expected to become more popular among patients, insurers and providers.

Direct-to-employer contracting is a model that is top of mind for many orthopedic practices, offering the ability to eliminate the payer from the care process, improve price transparency and create an aligned interest between employers and providers, among other benefits.

Four orthopedic surgeons recently shared their thoughts on direct-to-employer contracts with Becker's:

Editor's note: Responses were lightly edited for length and clarity.

Nicholas Grosso, MD. The Centers for Advanced Orthopaedics (Bethesda, Md.): I believe direct-to-provider contracting between employers and physician practices should be getting more attention as the cost of healthcare continues to rise. Employers are feeling this increase and have no choice but to pass costs down to employees. As recruiting and retaining talent remains a challenge across industries, employers can save by contracting directly with providers, which will be more attractive to employees.

Ed Hellman, MD. CEO, OrthoIndy (Indianapolis): Obviously, the whole fee-for-service, third-party payer system is coming under a lot of stress as we approach 20 percent of GDP going to healthcare. A lot of our companies are looking at their healthcare spend as something that's really hurting their bottom line, and it gives us an opportunity to develop more innovative models, such as direct-to-employer contracts and bundled payment programs. The buzz term is "value-based care," but it's very difficult to find value, so I think these other ways of looking at care are going to be very important. That's also one of the reasons why smaller orthopedic groups might struggle — it really requires some degree of size to be able to participate in these programs.

Frank Aluisio, MD. EmergeOrtho (Durham, N.C.): If [smaller orthopedic groups] want to stay independent, they're going to have to look at joining larger groups. It's difficult to survive now, but it's going to be next to impossible to survive as we transition to the next phase of healthcare. Not only value-based care, but as we also transition to direct-to-employer care, you need to be able to provide the full gamut of musculoskeletal services, and it's necessary in a larger group to offer that full spectrum of services. You don't see it in many parts of the country at this point, but I think a lot of the larger groups are beginning to head in the [direct-to-employer] direction.

Matthew Barber, MD. Springhill Medical Center (Mobile, Ala.): Alternative payment models will take some time to mature. However, as this market develops, it will help to realign things to more patient-centered care and help preserve surgeon autonomy. This is a space that is evolving due to oppressive insurance costs and bureaucratic red tape. It includes direct care (cash pay), medishares, bundled payments, employer contracting and population management for musculoskeletal care. It is unlikely that any of these models will completely dominate, but they will create an ecosystem of options that gives patients more choices and allows participating providers to remain independent. As these options open up, it may reverse some of the recent flow of private practice surgeons into employed roles.

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