Telehealth technology has been around for decades, but in the midst of the COVID-19 pandemic, it became necessary for patients who needed access to care.
Telehealth use overall has stabilized at levels 38-times higher than before COVID-19, ranging from 13% to 17% of visits across all specialties, according to research by McKinsey & Company. There’s no doubt that technology played a vital role over the better part of the last year, increasing access to care, keeping patients and healthcare workers safe, and conserving vital resources. It also filled a void for low-acuity patients.
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But for those who suffered from severe musculoskeletal conditions, injuries, or chronic pain, deferring surgeries was the only answer. Now, as we return to a more normal way of life, and patients return to the doctor’s office, employers are faced with a significant pent-up demand for planned surgeries.
A recent study found the U.S. may have a backlog of more than 1 million joint and spine surgery cases by mid-2022. Despite the rapid adoption of telehealth during the pandemic, it’s certainly not a cure-all for certain chronic conditions and doesn’t address employers’ largest medical costs — surgical spend.
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Planned surgeries are the largest area of medical spend — in some high-cost markets with little provider competition, employers pay between $50,000 and $60,000 for hip and knee replacements.
Carrum Health has analyzed medical claims data and estimates that self-insured employers spend nearly $250 billion on planned procedures in total. What’s more alarming is that spending more on surgery doesn’t equate to higher quality or improved outcomes. Poor quality care, readmissions, and complications lead to even higher costs for patients and their employers.
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Without swift action — and a solution-driven mindset — the impending wave of one million surgeries will further feed into an already broken system. Not only will employers have to contend with a surge in MSK claims, but they also face rising healthcare costs, including some health plans that are asking for rate increases up to 70% due to the uncertainty of the pandemic.
As employers look toward the rest of 2021 and beyond, they must demand higher value and prepare now for rising healthcare costs, the pent-up demand for MSK surgeries, and the health of their employee population. Otherwise, all of the healthcare spend on the backlog of surgeries will go into the PPO networks and the fee-for-service model, and the results will be more of the same.
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Telehealth can’t help employers address the pent up demand for MSK surgeries or solve for a broken payment model. A fundamental transformation of the business model that changes the way healthcare is paid for and delivered is necessary.
The proven solution is value-based care strategies: contracting for bundled payments with Centers of Excellence (COE), driving value with lower, fixed prices, and reliable, improved outcomes. Many employers are already looking to value-based healthcare solutions that integrate with their benefits offerings.
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Eighty-one percent of employers will have at least one condition-specific COE in place this year, according to a recent survey by the Business Group on Health. While this is encouraging, much of this adoption is happening through carrier-based contracts that are still based on fee for service, which doesn’t address the sky-high unit costs.
Further, a recent study published by RAND Corporation in Health Affairs found that applying bundled payments to orthopedic and surgical procedures could significantly improve results. The study found that 30% of unnecessary surgeries were avoided, and for those surgeries that were necessary, there was an 80% reduction in readmissions and 45% savings per procedure. The study also noted how patients benefit — saving up to $2,400 while utilizing quality providers.
For employers looking to improve health outcomes, lower costs and make healthcare easier for everyone, adopting these methods is imperative. The time to act is now before the pandemic’s pent-up demand is fully unleashed.
