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September 2013
Boning Up on Health Care
By Gene Stowe

     Charlotte-based OrthoCarolina has positioned itself to provide high-level, cost-conscious service driven by the economics of U.S. health care and the Affordable Care Act.

     OrthoCarolina provides a continuum of care: physicians who are specialists in foot and ankle, hand, hip and knee, shoulder and elbow, spine, sports medicine and pediatrics as well as such services as physical therapy, MRI and post-surgical support.

     The regional practice has grown to 130 doctors, nearly double since Charlotte Orthopedic Specialists and the Miller Orthopedic Clinic merged in 2005, partly by adding six other practices in the past five years. It employs more than 1,000 people.

     That size provides the economies of scale, top-quality staffing and opportunities for innovation that can address inefficiencies in care delivery, says Dr. Dan Murrey, the firm’s CEO.

     In particular, OrthoCarolina leverages technology and patient engagement to establish a track record of affordable, successful care that will be vital to success under bundled-payment plans facing the scrutiny of payers and accountable care organizations.

     “Orthopedics is sort of on the front end of the experimentation that the Affordable Care Act anticipates,” Murrey says. “We’re mostly in the business of improving quality of life and reducing pain. The treatment of orthopedic problems tends to be pretty episodic. A lot of entities around the country are experimenting with what are called bundled-payment programs.

     “We’re building the tools so we’ll be able to do that and go to the public and say ‘This is what you’ll be able to expect from us if you come to us with carpal tunnel syndrome or knee arthritis.’ We want to be more transparent not only about the outcomes, but what the cost of care will be.”

     Federal rules aside, cutting costs is crucial for convincing employers to continue providing health benefits, Murrey maintains. Per-capita costs have doubled in the last 10 years, and health care accounts for 18 percent of the GDP.

     “We realize that health care costs are a huge problem for the business community. It’s a real drain on businesses to have to pay as much for health care as they currently have to pay, and those costs have gone up dramatically,” Murrey continues.

     “What we’re hearing from employers is that they were paying more and more. But without quality outcomes reported, such as return-to-work rates and quality-of-life measures, they didn’t know what they were buying.

     “Every year, if they are paying 10 percent more, our fear is that employers will get out of the health care business altogether.

     “We felt that for those economic reasons we had to respond. The Affordable Care Act put some structure to it, but these were changes that needed to take place anyway, regardless of whether the Affordable Care Act passed or not. It was becoming unsustainable for the economy and for the businesses.”

 

Benefits of Scale

     OrthoCarolina’s growth in recent years enables it to make the investments necessary to address these problems.

     “We’ve increased our size and our footprint to as far as two hours from Charlotte,” Murrey says. “Our overhead has progressively gone down as we’ve grown. One way it’s happened is that for medical practices, there’s a lot of capital investment, especially in information technology and electronic medical records.

     “I think we have a real opportunity, having the concentration of orthopedic specialists we have and the volume of patients we have. We can devote time to enhancing protocols.”

     OrthoCarolina’s scale enables it to keep legal, human resources and IT support in-house, saving more costs, and its numerous locations keep talented specialists busy full-time, enhancing patient care.

     “We have subspecialty centers,” Murrey explains, such as concentrations of surgeons for hip and knee replacement, spinal surgery and hand surgery. “That probably has a greater benefit from the patient care standpoint, for patients to get the benefit of all the people in that subspecialty rather than an individual doctor if they have a challenging or controversial case.”

     The firm has used electronic records for more than a decade now, which avoids the needless duplication of services, and adopted a data analytics tool five years ago to reduce costs.

     “We’ve done some things to really try to drive down the cost of care for patients,” Murrey says. Among other things, OrthoCarolina has opened five orthopedic urgent care centers so that patients can avoid emergency room visits when they need help at night or on a weekend.

     “They’re seen for the cost of an office visit rather than emergency room charge,” he says. “People know if they’ve injured an extremity. They can generally decide for themselves to go to an orthopedics facility.”

     As the soaring cost of health care has generated increased cost-shifting to patients, they have become more engaged in their own care, Murrey acknowledges, and OrthoCarolina has elevated efforts to assure patient satisfaction.

     “Patients historically have not paid for their own health care,” Murrey says. “Now, as people are experiencing higher copays, higher deductibles, they’re getting more involved in the pricing decisions. I think that’s been a positive thing. It’s forced everybody to be responsive. Physicians want to be responsive to their patients. The cost of care is now a part of satisfying patients that previously was not a big part of the equation.

 

Quality Care Experience

     “We’ve done a fair amount of work in trying to standardize what we do and report the outcomes. Currently we use a database that allows people to input their health information directly into their medical record through an email link or an iPad in the office. We’re now starting to add to that, to add modules to educate them about their disease process or the surgical procedure they’re contemplating. We can report out what their progress has been.”

     Several years ago an internal, cross-functional process improvement team started looking at patient complaints, both solicited and unsolicited, to generate improvements.

     “We processed all that information and mapped out the care experience so we could see where the breakdowns were,” Murrey explains. “We’ve since expanded that program to include patients and their families. Over the summer, we shadowed over 500 office visits, care experience and surgeries with patients to get their take on what was good and what wasn’t good.

     “We’re taking all the data we accumulated over the summer and creating action teams that will include not only our staff but also some of those patients to find solutions that will be preferred solutions for them. Those are the kinds of things we need to be doing—looking at the world through our patients’ eyes. The patients will tell us what they need.”

     Transparent pricing in bundled care is a key to bending the cost curve in a field where even physicians sometimes don’t know the cost of service until it appears on the bill.

     Murrey says now, “You know what the price is up front. There aren’t these surprises and bills that come for months and months afterwards. The provider makes sure you get exactly what you need, not more or different.

     “We have to be a lot more intentional about the entire episode of care—not just what we do as surgeons, but all the other things you might interact with during your surgical episode.”

     Consumers have found pricing of medical procedures is so arbitrary that “medical tourism” is growing—Americans going abroad for procedures like knee and hip replacements at a fraction of what the cost in the United States.

     “There’s no question that the costs of implants are way too high,” Murrey says. “We’re working to try to reduce those costs as well. We believe that there’s a lot of opportunity to reduce supply costs and implant costs in orthopedics. The incentives haven’t been set up to do that. What we like about this new way of pricing is it forces everybody to take a hard look at the added value.

     “Spending more does not always generate better quality. Even though we spend more than any other country, our life expectancy is not as high as dozens of other countries. We’re probably not getting value for all we’re paying. We’re trying to do what we can to figure that out and advocate for patients.”

     The goal, Murrey says, is a care experience that starts when the patient calls. The practice provides the appropriate and necessary care for the person’s needs and circumstances, a navigator helps guide the patient through the process, the physicians’ track records and the costs are transparent, the patients get progress reports, and the practice engages the patients to help improve the system.

     “I think if we offered that package of improvements to people, they would be excited to have it,” he says.

 

The Anatomy of the Practice

     OrthoCarolina’s prides itself as being one of the nation’s most comprehensive orthopedic practices. It provides advanced specialty care and general orthopedics, supported by physical medicine and rehabilitation, physical therapy, advanced imaging, an occupational medicine program and orthopedic urgent care centers.

     The origins of the practice are well-storied. For more than 80 years the predecessor groups of OrthoCarolina have provided quality orthopedic care to patients in the Charlotte region.

     In the 1920s, Dr John Stuart Gaul, grandfather to the current Dr. Gaul III, pioneered an orthopedic practice rehabilitating wounded soldiers from WWI, and earning a General Washington Offices Award of Merit for his dedication. Nearby, Dr. Oscar Lee Miller was also starting a practice that would grow to become the Miller Orthopedic Clinic.

     During the ’40s, prior to the development of the polio vaccine, Drs. Miller and Gaul worked to manage and treat the effects of polio throughout North Carolina, and share the knowledge and techniques with others, locally and internationally. Both practices continued to grow through the ’50s, and in 1955 a third orthopedic group, the Charlotte Orthopedic Clinic, was established resulting in 17 orthopedic surgeons in Charlotte and the surrounding communities.

     The ensuing decades saw expansion of the practices with residency programs as well as the first surgeries at the Orthopedic Hospital of Charlotte. The expansion continued into the ’90s as the practices strengthened ties with community hospitals, while simultaneously striving to remain independent.

     In 1993, Gaul Orthopedic merged with Charlotte Orthopedic Clinic to form Charlotte Orthopedic Specialists (COS), and late in 2004 the Miller and COS practices merged to form the present day practice.

     Murrey expects that OrthoCarolina will continue to grow, through alliances as well as expansion and acquisitions, so that people in more communities can enjoy the advantages.

     “What we’ve been able to achieve is to bring some of these procedural advantages or technological improvements to a lot of communities that didn’t previously have them or wouldn’t have been able to afford them,” he says.

     “I think there are other opportunities to do that. The groups that have invested in infrastructure and have the kinds of governance that allows them to do those things make good partners as we work through this pretty massive transformation that health care is going to go through in the next decade.

     “If we can figure it out together and get a solution that works, others shouldn’t have to struggle through it on their own. I think we’ll continue to grow. I think we’ll see more groups coming together,” Murrey affirms.

     The shift from fee-for-service to new care models, including implementation of the Affordable Care Act, will take time but offers promising possibilities, he points out.

     “We were not incentivizing the things that are desirable,” Murrey says. “This gives us an opportunity to create some changes in the system that ultimately could benefit the people. It’ll take a generation to figure this all out and make the changes that are necessary, but I think all in all it’s going to move us in a direction that’s going to make us more responsive to patient needs. At least we have the opportunity to do that.

     “I think it’s incumbent on the physicians in the community to lead that process. If we don’t take a leadership role in doing it, we’re letting our patients down. We’re intent on being leaders in that.”

 

Photo: Fenix Fotography

 

 

Gene Stowe is a Greater Charlotte Biz freelance writer.
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