Self-funding & Bundling: Saving Big on Surgical Procedures (Part 1)

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Applying Free Market Values to Spine and Orthopaedics

Reality today is that business owners are large healthcare consumers, and their expense associated with healthcare consumption is rising rapidly.  Implementation of transparent, bundled pricing can create a free market wherein businesses purchase greater value, and depending upon company size, can save hundreds of thousands, if not millions, of dollars annually. For example, a single spine fusion in a transparent, bundled free market model can save over $100,000 for a self-insured business.  Unfortunately, that savings does not occur in mainstream healthcare because it is anything but transparent; consumers do not know the cost, nor do they truly understand what they are buying.  Realistically, healthcare consumers are purchasing a desired or expected result of treatment for an ailment, which is a concept more easily grasped.  However, expected results and outcomes data is not easy to find or to interpret.  Translating healthcare industry jargon into information the public can process, and transforming healthcare into a free market, should have the desired result of providing value for the consumer and a fair price for the service provider.

In the coming issues, we will investigate some key concepts which will better enable purchasers of healthcare to understand what value looks like and where to find it.  We will explain transparency of price, which is nonexistent in the healthcare mainstream.  In Spine and Orthopaedics, many procedures are often offered as a “bundle”, but hidden costs remain for additional persons and “unforeseeable events.”  A true bundle should allow the business owner to know the absolute total cost of an entire episode of care.  Only then can he or she plan for that financial burden.  We will examine the types of questions to ask to help determine what is actually included within a bundled service rate.  Multiple providers include asterisks as part of their “all in” pricing.  It is important to know what is behind those asterisks and what additional financial burden you may encounter on the back end after a service has been provided.  We will briefly discuss cost effectiveness of procedures.  The concept of cost per quality adjusted life year (QALY) will be described to illustrate some more complex factors to consider when gauging the full burden cost of a treatment plan or procedure over time.

The QALY concept provides a natural transition into discussing outcomes.  Just as all procedures or treatment plans are not the same, neither are the health care providers.  Understanding what questions to ask is critical when deciding from whom you would purchase healthcare.  We will describe different types of metrics to consider when trying to assess provider merit.  As with price, medical providers should be able to tell you what types of outcomes they have, what are their complication rates and other related metrics in a prompt concise manner.  The inability to provide and discuss outcomes regarding clinical and patient satisfaction measures should give pause to the consumer.

Finally, we will discuss where one might be able to find the types of transparencies you need to make an informed decision.  Most of the treatment individuals need, including expensive surgery, is done on an elective rather than emergent basis. Therefore, research of the provider and planning for treatment can occur. We will talk about ambulatory surgical centers and private practices that provide comprehensive specialty services as they are important considerations in the elective setting. We will discuss the risks and benefits of an ambulatory setting for medical service delivery and why these types of settings typically provide greater value, and more frequently provide transparency of price and outcomes.

After going through these topics, we will summarize the highlights of some important components of health care transparency as they relate to surgical specialties, specifically Spine and Orthopaedics. We will demonstrate how a transparent, bundled pricing model can generate significant savings for businesses, especially those who are self-insured.  The goal of this series is to educate you the reader so that you will be armed with some basic tools to empower yourself as a true healthcare consumer.  Navigating healthcare does not need to be hard.  It is just kept that way so that control of the market may be maintained and manipulated by the few, and their cost may be passed down to you.  The goal of the Free Market Medical Association, its members, and the movement they are leading is to open the healthcare market and to facilitate connections between buyers and sellers of services in a way that is seldom seen today.  Welcome to the healthcare revolution!

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Dr. Richard Kube

About Dr. Richard Kube

Richard A. Kube II, MD, FACSS, FAAOS, CIME is a fellowship trained spine surgeon and Founder/Owner of Prairie Spine & Pain Institute, in Peoria, Illinois. He also founded and owns Prairie Surgicare, an AAAHC certified surgical facility. He holds Board Certifications from the American Board of Spine Surgery, American Board of Orthopaedic Surgery and American Board of Independent Medical Examiners. His practice is dedicated to providing comprehensive operative and non-operative treatment for spinal ailments with a special interest in minimally invasive surgical techniques. Dr. Kube is also engaged in active research and education projects. His interests extend into strategic planning and entrepreneurship as he is Advisor to Twisted Sun Innovations, a Hydrogen energy company currently working on renewable energy solutions for the U.S. Department of Defense. Dr. Kube currently serves as clinical faculty at University of Illinois College of Medicine at Peoria.

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