What if healthcare billing was based on patient outcome, not just the services rendered?
Sword Health, a musculoskeletal (MSK) digital physical therapy platform, recently switched from an engagement-based pricing model to outcome-based pricing. It now bills its employer clients the full amount for a service only if a participating employee's health improves. There is no cap on the time or the number of sessions it can take to achieve this, allowing employers to
It's a call to action for both the
"This is cool for the healthcare world, but it's also very important to us internally, because we will become much better at member recovery now that everyone knows our profit, our revenue, our growth, is highly dependent on whether members recover or not," he says.
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Approximately half of Americans suffer from MSK conditions — which can cause pain in the ligaments, joints, bones and muscles — and three-quarters of employers rank these conditions as one of the two top drivers of healthcare expenses, according to Business Group on Health. Sword Health's therapy programs help cut down on the need for surgery, which is one of the biggest MSK-associated expenses and, in more than a third of procedures, unnecessary, the company's research has found.
Data from Sword shows that by helping employees avoid these procedures with physical therapy, employers could save at least $90 billion a year.
Sword Health has a 94% member program completion rate, with 62% of patients experiencing a reduction in pain and 64% having reduced intent for surgery following treatment. An independent study showed that for every $1 spent on care from Sword, companies save $3 in medical spend. The move to outcome-based pricing is one more reason employers can have faith that their investment in this benefit will yield positive results for their employees.
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The platform uses a combination of AI tools and licensed therapists to guide patients on a customized therapy routine, tracking their progress and sharing real-time data with their providers. Sword's cutting-edge use of AI in its treatment process is part of what has allowed its care and cost-efficiency efforts to evolve, says Bento.
"In 2020, we wouldn't have been able to commit to delivering 100 sessions to a member without getting the full payment, because of the costs associated with each session," he says. "Now, AI makes the delivery of care more efficient, which allows us to really launch these value-based care models."
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Putting stock in the company's capability brings a sense of pride to Sword's workforce, promoting innovation and productivity, Bento says, adding that he hopes the shift in pricing model encourages other healthcare companies to consider doing the same.
"It's putting the success of the company on a model where, if we don't deliver clinical outcomes and deliver members, we will go out of business," Bento says. "It's showcasing what we stand for as a company in the most tenable way possible."
