August 15, 2025 • 36 mins
Moving beyond typical discussions of value-based care, Dr. Mather reframes the entire conversation. "Value-based care is financial innovation to solve important healthcare problems," he explains. These problems extend far beyond cost control to address clinician burnout, prior authorization burdens, care gaps, declining profitability, and health equity. For surgeons planning their careers, understanding this broader context proves essential.
The discussion dives deep into why procedural bundles like CJR and BPCI have limitations despite their promise. "Bundles are a building block," Mather notes, explaining their volatility problems and how they've made value-based care appear to be a "joints and spine initiative" rather than engaging entire practices. He then explores the complex world of condition-based bundles, global risk, and capitation models, illustrating why the shift from fee-for-service feels like "entering a dark forest" for many surgeons.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 2 (00:22):
Welcome to the AOA Future in Orthopedic Surgery
podcast series.
This AOA podcast series willfocus on the future in
orthopedic surgery and theimpact on leaders in our
profession.
These podcasts will focus onthe vast spectrum of change that
will occur as the futurereveals itself.
We will consider changes asthey occur in the domains of
(00:43):
culture, employment, technology,scope of practice, compensation
and other areas.
My name is Doug Lundy, host forthis podcast series.
Joining us today is Dr ChadMather.
Dr Mather is an assistantprofessor and vice chairman of
practice innovation in theDepartment of Orthopedic Surgery
(01:04):
at Duke University.
He's a core faculty member ofthe Duke Margolis Center for
Healthcare Policy, as well asthe Chief Medical Officer of
Optum Specialty Care.
He went to medical school andresidency at Duke University,
did his fellowship in sportsmedicine at Rush University
Medical Center and his master'sin business administration at
(01:27):
the Duke Fuqua School ofBusiness.
He is a health servicesresearcher and a decision
scientist with focus on economicanalysis, health preference
measurement and personalizeddecision making.
His clinical practice focuseson hip arthroscopy, including
both FAI and extra-articular hipendoscopy.
(01:49):
Dr Mac there, welcome to thepodcast, sir.
Thanks, doug, it's great to behere.
Thanks for inviting me.
Yeah, chad, great to have youon.
So, chad, when it comes down towhen we're really looking at
changes in payer models as wemove into the future, we're
going to discuss changes inpayer models, as you and I had
discussed.
I don't know anybody that'sgoing to be better to talk about
(02:10):
this than you are.
So can you tell everybody kindof what your other job is
besides being a hiparthroscopist at Duke?
What else do you do for aliving that makes you such an
expert?
Speaker 3 (02:22):
in this.
Speaker 2 (02:22):
Don't be humble, tell it all.
Speaker 3 (02:25):
Well, thanks, doug.
Yeah, I feel like this is atopic I spent a lot of time
thinking about.
You know, it was a passion ofmine before I even went to
medical school and and and.
Then, you know, as a resident,it became more interesting to me
as this became more and more ofa focus of the profession and I
knew I had this interest andand so further developed it.
I was lucky to meet you in theWashington Health Policy Fellows
(02:47):
Program.
That's where I learned a lotabout the advocacy side of it,
how the you know, how thesausage is made and so on,
learned that there's the youknow the regulatory side as well
as the legislative side.
Didn't even know those types ofterms existed for that program.
So that really gave me a greatfoundation for how to be
actionable in the space.
I spent my early faculty years,in the first several years,
(03:07):
doing what I would characterizeas the work in the components of
value-based care, things likeshared decision-making and
patient report outcomes, so onand so forth.
But as we built these reallycool prototypes, I realized that
this was never going to reachscale until we changed the
payment model.
And that was about the sametime.
I was going to Fuqua and thereI took some great classes about
(03:30):
organizational innovation and wecame up with this concept the
practice transformation unitthat you had mentioned there in
the bio and the purpose of thatwas to accelerate value-based
care through development ofinnovative care models that
would illustrate what thatfuture looked like and the doing
further experiments in thecomponents of value based care.
But then, when we're talkingabout today, payment models
(03:53):
change.
The payment models was alsofortunate at that same time for
the Margolis Center to kick off,so we had this great new health
policy center at Duke andpassion for that, and during
that time we spent a lot of timeworking with Kevin Bozic at
Dell and the three of us theMargolis Center, us at Duke,
(04:13):
ortho and him at Dell working oncondition-based payment, and
that was really really had a lotof momentum there.
And then and this is about maybeabout four years ago I started
feeling like we still had somuch yet to answer.
We had so much momentum andhope in North Carolina where we
(04:34):
had some new leadership at ourmain payer, blue Cross, blue
Shield.
There was so much hope that wewere going to be the epicenter
of value-based care.
And then in a moment he moveson and I realized that the
limitations of a single statebeing able to answer these
questions and that's what that'swhat led me to opt in that in
Dan Murray, I mean, having great, great leaders is really
important.
(04:54):
I mean that's really whatallows us to create things that
solve these kinds of problems.
And so you know, those twothings that led me there.
That, with one of my main goalswas to learn, was to.
I saw this landscape of 20markets that we're in and said
you know, we could solve thisproblem 20 different ways and
learn from people solving indifferent ways.
And so it has been the lastfour years doing a lot of
(05:16):
learning like that and observingwhat's going on.
So, yeah, you're right.
I'm glad you asked me to againto come do this podcast because
I can give you a chance to shareall I've learned across our
landscape in that time.
Speaker 2 (05:29):
Yeah, that's fantastic.
I mean you're the right guy totalk to about this and, for
folks who don't know, can youexplain what Optum is and what
your relationship or what yourposition in Optum is about?
Speaker 3 (05:40):
Absolutely so.
That's usually how I startthese talks on the future of
orthopedic financing is kind oflevel setting that there.
So you know, optum is a healthservices organization.
It's a health care deliveryorganization that's part of
United Health Group,no-transcript, an able
(06:16):
hospital-based health systems,and that's one of the things
that drew me to it.
Optum is made up of a few bigentities.
You have Optum Insights, whichis a data analytics arm.
You have OptumRx, which is abig pharma arm, and then
OptumHealth, which is theprimary delivery piece, and then
within OptumHealth you havecomponents that are specialized,
like Optum, behavioral Care,urgent Care, so on, and another
(06:39):
section.
Then you have themulti-specialty or primary care
groups, ipa organizations andnetworks that all take
substantial amounts of risk andheavy value-based care.
And then you have SCA Health,which originally was an
ambulatory surgery company, nowevolved into a specialty
(07:02):
alignment company.
And that's where I formally sit, which is really the best of
everything, because SCA stillhas a lot of its smaller company
culture.
It's, as I like to say, closerto the cellular level of
healthcare.
Sca, because it runs surgerycenters, is only one step above
(07:22):
that.
So it's a wonderful place towork with a beautiful culture,
and yet you know we're part ofthis big organization from a
resourcing and learningstandpoint, so it really is a.
It's a.
It's a wonderful job and veryfortunate to be able to work
there.
Speaker 2 (07:39):
So if we were in a deposition right now, the
attorney would say I'd like tosubmit, Dr dr mather as a
subject matter expert in thisarea.
So clearly you are all right.
So what?
I'm asking everybody, as best asyou can, within the concepts of
reality before you get too farout on the edge and you start
going I can't do that within thenext 10 years, 20 years,
(08:03):
however far out you feelcomfortable doing.
Where do you see payer modelsgoing?
So my residents now who arejust starting my PGY, ones who
still have five years left withus here and then a year of
fellowship and then they'regoing to get their job and pass
their board and all that, sothey really don't get up and
spin it and cranking forprobably another eight to 10
(08:25):
years and then they're going todo another, at least another 10
years of that.
What do I tell them?
This is what pair models looklike that.
Speaker 3 (08:33):
Yeah, that's great.
I love that.
I love that framing.
You know, I think the best wayto start to answer is to take a
moment to better define or atleast renew the definition of
value-based care.
I get that question a lot.
We're at this point now wherepeople are saying what is this?
(08:55):
And I get that question a lot,and so I've thought a lot about
it and the way I like to defineit and I would especially for
young people is that it's valuebased care is financial
innovation.
It's using financial innovationto solve important health care
problems.
You know, the first problemthat we envisioned solving was,
as I mentioned earlier,affordability.
I got really more passionateabout this when I realized it
(09:18):
could solve clinician burnout.
No question that it can andshould solve our prior
authorization and UM burden thatwe face.
It can solve the gaps in carethat we have.
That's where we used it tobuild a whole person
musculoskeletal care model.
It can solve decliningphysician profitability, and
Dominic mentioned why that'simportant.
(09:39):
And then what I think I'vediscovered most recently it can
solve and I'm passionate aboutis health equity.
So, especially for young people, I would suggest they look at
it from that lens.
What problems can we solve byinnovating in the way that we
pay for care and in 10 years.
I think some of it depends onhow well we do with that.
(10:00):
I mean, are we just shiftingthe margins around, creating
just different winners andlosers, or are we truly solving
those problems?
A great example that's verytangible is exactly that
Prioroth, um space.
If taking more meaningfulamounts of musculoskeletal risk
(10:20):
and managing that can alleviatethat burden, then value-based
care has a future.
That's 10 years.
Those are the types of thingsthat we try to focus on is
tangible improvements in thepatient experience, patient
outcomes and our own experiencethat value-based care can solve.
That's going to define thefuture.
Speaker 2 (10:42):
Where do you think let's just go to bundles then?
Speaker 3 (10:44):
Yeah.
Speaker 2 (10:45):
And I know they're coming out.
So BBCI and CJR are nearlydefunct.
Now the federal government'scome out with TEAM transforming,
whatever the rest of that is.
I'm not council chair anymore.
What do you think about bundles?
Are these the rest of that is?
I'm not council chair anymore.
What do you think about bundlesin the?
Are these the wave of thefuture or are these just a flash
in the pan?
Speaker 3 (11:04):
I think bundles are a building block.
Well, the mistake we we, asorthopedic surgeons should not
make is to see those as thestopping point, but they were.
They were a beautiful constructfor us to learn.
What things we did learn is ifyou put risk in a section of the
delivery model, then you canget results.
You know, bundles brought riskto the post-acute phase of care,
(11:27):
and we see improvements in bothoutcomes as well as
affordability in that arm.
The problem with bundles, though, is and this is why I challenge
a lot of surgeons to thinkabout they're built for the
clinician, that's how you wantto manage care, that's how you
want to manage financial risk isin a cell that you can control
(11:48):
the bundle, the episode.
The problem, though and it's ona classic insurance, if you're
taking a risk on something toosmall, it's very volatile, and
so it's thus the benchmarkpricing problem that has
befallen bundles and, I think,will continue to.
Just based on the structure,you know, you have one reference
group that you might price that, that bundle, at, and then
(12:10):
there's a different group thatyou actually take care of, and
that crushes the whole model.
All the all your good work, youwork based on the volatility of
that benchmark price.
So if bundles do have asignificant future on a large
scale, we've got to solve forthat.
The only way I know to do thatis to expand the scope of the
risk that you're taking and sothat you absorb effective
(12:31):
volatility in that way.
So the other problem and thisis so important, doug is that
bundles have made value-basedcare appear to be a joints and
spine initiative.
Right, right, right, and thatis a problem for the practices,
for our practices more than any,because it splits them apart.
(12:53):
And now you've got, okay, we'regenerating money here, we're
maybe distributing it, andthere's tension around that
versus things that everybody canbe involved in.
So that's my other problem withbundles is they're too narrow
to involve everybody.
Speaker 2 (13:06):
Yeah, wow, you almost stepped into narrow networks on
that one.
So you're talking reallyspecifically about
procedural-based bundles bundlesaround total knee arthroplasty,
total hip arthroplasty, spineor proximal femur fractures.
If you want to get into CJR andwell, not CJR, ppci what about
the stuff that Kevin Bozick'sbeen talking about, carl
(13:28):
Koenig's been talking about interms of condition-based bundles
, more or less, and you can eventake that off into decapitated
care if you want.
Speaker 3 (13:35):
Sure, well, that's where I started.
That was my first jump offpoint was condition-based
bundles and I thought that thatwas the solution.
But when we would, we'd makeprogress and I could hear the
you know the sausage being made,if you will, and it was almost
like I could sit.
I could feel the housecollapsing under the weight of
the details.
And it's even even harder todefine things like attribution.
(13:58):
So another when I talk aboutpayment models and I'm really
focused on education, I'll gothrough the list of terms.
You know that it's important tounderstand, to really engage in
this.
Attribution is one of thebiggest and hardest ones.
Attribution means you'reresponsible for this and then we
, you know, pay you as suchProcedural bundles.
The attribution is so easy.
Right, you did a procedure.
(14:20):
I mean you did it.
It's pretty obvious you did it.
Attribution is super easy.
In condition-based bundles theattribution is a lot harder and
that's challenging there.
So you search who's responsiblefor what and when, and then
that affects the course ofpricing and so on.
So the details are challenging.
The other problem withcondition-based models they
don't solve necessarily for theproblem I mentioned about it
(14:42):
being a joints and spineinitiative versus an everybody
initiative, and I think, thecomplexity of condition-based
bundles.
In my career we may only getthrough joints and spine and yet
you know, that's only twothirds really of the opportunity
that is out there.
So those are.
Those are some of the reasonsthat we've kind of decided to
(15:02):
move away from or at least Ithink we should move away
eventually from condition-basedbundles.
That said way the way thatwe're paid and the way we manage
care are not necessarily thesame.
They have to support each other.
But you can.
You can have a payment modelthat is not a bundle and you can
manage care as a bundle withinthat because it's easier.
So the incentives and thethings that we want to do within
(15:25):
condition-based bundles, thefocus on shared decision-making,
patient-reported outcomes, thewhole person care we need to do
that and support that with theright financing model.
I just don't know that thecondition-based bundle is the
one.
Support that with the rightfinancing model.
Speaker 2 (15:38):
I just don't know that the condition-based bundle
is the one.
Yeah, but under theprocedural-based bundle I'm paid
to do surgery.
So if somebody comes in and notthat anybody would do this but
I'm incentivized to do totalknee arthroplasty on somebody
with degenerative knee pain,Whereas if I'm under a capitated
condition-based bundle, if I'mon a capitated condition-based
bundle, I should really onlyoperate the people that, because
(16:05):
we know that not everybody whogets a total knee gets better.
So I should really target thistotal knee arthroplasty for the
people who are specificallygoing to get better and offer
less expensive care to thepeople where that's not going to
help them.
So what, you don't think thatcondition-based bundles help in
that regard?
Speaker 3 (16:18):
I think they're a step in the right direction,
they're another building block,but I don't think they can solve
for everything and I do worrythat the complexity of them is.
I have a framework.
I think about impact versuscomplexity, impact versus
complexity and, you know, Ithink I worry that
condition-based bundles, whilethey should do exactly what you
(16:45):
mentioned, the complexity ofadministering them will prevent
them from growing to the levelthat they should.
And rather, we may look atother, like you say, capitated
models, capitation, broader riskmodels that would create the
same incentives without thecomplexities of definition,
administration, attribution andso on.
Speaker 2 (17:05):
Okay.
I can see that, so that's good,I like that.
So at Optum there.
So you guys, how many lives arey'all covering?
Speaker 3 (17:17):
So you guys, how many lives are you all covering,
gosh?
I mean in total, it's.
You know I don't even know theexact number, it's, you know
hundreds of thousands, millionsof lives.
You know mostly MedicareAdvantage.
Speaker 2 (17:28):
Yeah, sure.
Speaker 3 (17:29):
Then we manage commercial as well, and so on.
Speaker 2 (17:32):
Yeah, and to your earlier point.
I mean the bundles are, if thebundles are anything at all, the
PPCI, cjr, or you can even putthat into MACRA with the APMs
and MIPS.
If you want to talk aboutcomplexity, they have achieved
that, wouldn't you agree?
I mean anything the federalgovernment comes out with.
I mean you just hope your headdoesn't explode as you're trying
(17:52):
to read it.
I don't know how anybody'ssupposed to get that done.
Speaker 3 (17:56):
There's also a one size fits none problem there too
, right right Now.
That, yeah, that we have.
So I think you know models thatallow for more.
You know more flexibility.
More you know can be, I think,can work better.
Now I often say too that it'sjust the complexity sits
somewhere, you know, I mean, ina condition-based bundle there's
(18:22):
a lot of complexity on thepayer side because they've got
to administer all that.
If you know, say, now thealternative side is something
like you mentioned cavitation,where we're just paid a fee, we
still have to figure out on thepractice side how to distribute
that money in a way thatgenerates the incentives, right.
We have to figure out who doespractice side, how to distribute
that money in a way thatgenerates the incentives right.
We, we have to figure out whowho does what and when and how
in order.
(18:42):
And so I, I, you know, one ofthe things I I learned from a
lot of my people I work with iswe would talk about these, these
condition-based bonos, at ahigh level and then they'd look
at me and say, yeah, I get it,but how do I pay my people?
So, right, right, yeah, right.
So the complexity just getsshifted to us.
But I would say I'd rather, asclinician leaders, be managing
(19:05):
that complexity rather than haveit being managed for me.
Speaker 2 (19:08):
Yeah, you just went where I was trying to get to.
Whereas we assume the risk,then If we have in our group, in
our university setting, in ourhospital setting, we assume the
risk on the condition-basedmental health setting and yet
pay us the capitated fee, we'lltake care of the population and
then we'll figure out how to paypeople from that capitated
payment.
Speaker 3 (19:27):
That's right.
Speaker 2 (19:29):
Wow, Chad, we're in the deep end of the pool here.
Speaker 3 (19:33):
I hope we can get to that point, but what we think is
an in-between, that is, thatbalance of complexity and
opportunity is just short ofcavitation, which is still
global risk.
So it's just saying you'retaking a risk on the whole MSK
if you will, but it's stillretrospectively, it's not
prospective.
So the difference betweencavitation and global risk
(19:55):
models capitation is prospectiveand, as we know from
prospective bundles, it'spowerful but it is disruptive,
right, and it is hard to manage.
And I you know your questionabout 10 years.
I hope we can get to reallyeffective capitative models in
10 years.
We would be doing well if wedid that in 10 years.
Right, right, that's what we'dall like to get to, but it's
(20:17):
hard, it's hard to.
We're not used to that, as youknow that we're used to do it.
So you know RVU models and CPTcodes and I do this work and I
get, and I get paid right, likethe.
The fever service system is sotransparent, it's so predictable
because it's based on work andyou understand work, right, and
(20:39):
when you move away from that boyit is, it's dark, I mean it's
it's.
You know you're in a darkforest and trying to find your
way and we have to be honestabout how hard that's going to
be.
Speaker 2 (20:49):
You know um so I think that's the most eloquent
I've ever heard that said I'mnot kidding.
I mean I really, because I'vebeen thinking of this whole time
and yeah, all right, you justsaid it all.
I was talking aboutconsolidation.
So at Optum, y'all haveconsolidated a fair amount.
How does consolidation of thepayer market?
How is that going to impact usin the future?
(21:10):
What does that look like?
Speaker 3 (21:12):
Yeah, yeah, I mean I think you know, I don't know, I
don't, I don't spend a lot oftime on that side of the house.
Probably they would want me tocomment on a lot on it anyway.
I mean, from a from a, from ourside you know, the clinician
side, the, the, you know, thesurgeon leaders side, I I think
there is some benefit to someeconomies of scale.
(21:33):
I think when you can movethings state to state so you
have payers that cross thestates and you can say we did
this great thing in Pennsylvaniamodel worked great, let's take
it to North Carolina.
When you have a payer that cando that, a national payer that
can do that, can transport thosethings, that does allow this to
grow a lot faster At the sametime, this to grow a lot faster
(21:58):
at the same time.
You know, competition is greatand and competition drives
innovation and um, and I thinkyou, you, uh, you want to be in
a place where there are multiplepayers trying to solve the same
problem, because we stillhaven't solved for it all.
So there's some balance there,and so I guess if I was picking
the perfect type of environmentto drive payment innovation, I
would say it's, it's, you knowcompetition in the markets
(22:21):
themselves with nationalrelevance, you know.
So.
You know where there was wherethe same payer had a significant
you know market share in anumber of states, but maybe not
a you know, a dominant share inany one single state.
Speaker 2 (22:35):
Yeah, it's.
It's great hearing you say that, because when I was at
resurgence I knew that danmurray was doing some really
cool stuff in ortho carolinawith the blues and we're like
man, we want to move that downto georgia, down to atlanta, and
uh, no, go buddy, it didn't.
It didn't cross over statelines that's right, it's like
what do you mean?
Come on, dan, and dan was morethan happy to share what they
(22:55):
were doing in North Carolina,but the Blues wouldn't let us do
it.
Speaker 3 (22:59):
That's right, that's right.
Speaker 2 (23:01):
Another question I had for you is and you learned
this in business school, I amabsolutely certain is that if
you look, if you talk to thepundits, they say we pay way too
much for health care in the US,that that is more than twice as
expensive as other developednations in the world, without
any increased evidence ofquality.
So we're just super expensive,without any demonstration for
(23:23):
that increase in cost.
And you work with one.
I certainly don't want to putyou in a conflict, but you work
with one of the big payers.
Do you feel that stress thatpeople are?
Because whenever I talk to thefolks inside the Beltway in DC,
I feel that stress.
Do you feel that stress that,man, our health care costs way
(23:45):
too much.
We got to find ways to deliverthis less expensively.
Speaker 3 (23:50):
Definitely.
I mean definitely.
There's no question that whenthe risk is shifted to the
clinician and you know thataffordability pressure is real.
But I'm glad you asked thisquestion though, because this
came up with recently.
You know, one of my partners,one of our great clinical
partners, said you know, I don'tknow about value-based care.
Are we just shift, like I said,shifting the margins around,
(24:12):
and is a patient ever going tosee the benefit of this and so
on, shifting the margins aroundand is a patient ever going to
see the benefit of this and soon?
And I said you know we should.
We should, in our back of ourmind, question whether they even
want to spend less onhealthcare.
I know that might not be, youknow that might be controversial
, but but I think more what theywant is more for what they are
paying.
You know the society wants morefor what we're paying on
(24:35):
healthcare.
I think in this country we dovalue our health care a lot.
I think we value our access tohealth care a lot.
We value our health a lot, andI think we're just not getting
enough for what we're spending.
I might argue that that'sactually what value-based care
is supposed to drive.
That's why I like to introduceit as solving these problems.
Solving these problems.
One of them is the cost of care, but I think I listed five or
(24:57):
six right.
So I would challenge that, andI think thinking about it in
that way helps you understandwhat any stakeholder wants out
of this.
The other problem, though andone of my payer friends told me
this was great insight he said Iasked him is quality or cost
more important?
Because when you're selling,when a payer is selling a health
(25:20):
plan, they can buy it on anynumber of things, and people
want good health coverage, theywant good care, right?
He said that's not the problem.
The problem that you knowquality is important.
It's not that quality is notimportant.
Quality is harder to see.
The cost of care.
The premium amount is sotransparent, right.
(25:41):
You know what a few cents is.
You know exactly what it meansin your budget to pay this much
more money a month.
The employer knows exactly whatthat's going to do to their
budget.
When you show them what qualitycare is, don't know exactly
what that means, right.
And when you're trying tochoose between things,
everything from a qualitystandpoint probably looks
similar, but the cost it's veryclear to see the difference, so
(26:04):
it's not about I think it beingmore or less important quality
versus cost.
Speaker 2 (26:13):
I think it's about how easy it is to measure it and
see it.
All right, you brought it up.
So I had lunch the other daywith our vice chair of family
practice in our system, yeah,and he was telling me and my
diet partner that he, that hisdoctors, get bonused based of
the diastolic blood pressure andHBA1C that's measured over the
year on their captured patientsin Epic.
(26:34):
So how do you measure quality?
That's a great measure, it's anice, hard, objective number
right.
How do you measure quality inorthopedics, then?
Speaker 3 (26:45):
Yeah, great question, just off of pros or what.
Well, the first thing I wouldsay is that's the single most
important question and challengethat we have to advance
value-based care.
I realized that in this lastyear that value-based care lacks
a measurement system,especially in specialty care.
(27:06):
The primary care space has theSTARS system.
They have this robust way ofevaluating quality within their
risk-based model.
We have almost nothingevaluating quality within their
risk-based model.
We have almost nothing.
And yet in the fever serviceworld, we've got so many metrics
that tell you how you're doing.
And so I think the message I'vebeen sending more and more is
(27:26):
that we have to get to ameasurement system that we build
.
We want to be building this.
We don't want to have it builtfor us, which it is being built
for us.
We want to be building that,and we have to be serious about
getting you something feasible,not just something perfect, but
something feasible.
I think that's I guess that'smy main message is this
(27:48):
measurement system is imperative.
How we measure quality, thenyou know, I think with it varies
.
I think you've got to look atthe stakeholder, I think you
have to look at what's important, and there's measuring quality
and outcomes, and then there'sassessing performance within
that system.
Different things right.
One of my favorite books is DaveJessivar.
(28:08):
I love that I heard him sayrecently.
I really love this concept ofresulting he talks about.
Speaker 2 (28:15):
Yeah, CEO at OrthoVirginia.
Yeah, CEO at OrthoVirginia,yeah.
Speaker 3 (28:17):
CEO at OrthoVirginia about the result you get, the
outcome.
The hemoglobin A1C may or maynot be related to the decisions
you make.
You may make a bad decision.
They may have a good outcomeand vice versa.
Right?
So we have to balance theoutcome the prom with our
ability to manage it.
And that takes me to theimportance of experience.
(28:38):
Right, you know, I had anotherday at a personal experience
healthcare and had a lot ofthose lately with my family.
I am often so struck on howimportant a great experience is.
I mean, it's something that haseverything to you, right?
I mean it connects you to thesystem, that connects you to
your family.
It is, it is so criticallyimportant and I know we don't
(29:02):
it's not that we don't thinkit's important, but that's
something we can control Right?
I think a lot about when wemeasure performance and what's
important about, about focusinga lot on on on the experience to
healthcare.
Speaker 2 (29:16):
So the CG caps and H caps actually accurately reflect
that or no?
Speaker 3 (29:22):
I think.
I think, again, that's a stepin a direction.
I don't think they capture itcompletely.
I think the way they'remeasured is questionable too,
and the way that we use it as abenchmark, I think, is
questionable too.
I think, yeah, I mean, there'sa lot, a lot of different ways
of measuring.
I mean, another way to assessexperience can be the use of
things that we know drives goodexperience.
(29:43):
If you're using shareddecision-making tools, if you
are reviewing patients' problems, you're probably providing a
better experience, right, and sothat gets again into, you know,
the things I can control as adoctor that I want to be
measured on.
I want to be measured onwhether I look at their problems
and talk to them about it, nothow they interact with the
receptionist.
(30:04):
Now, that's important and I gotto quarterback that Right.
But that's the pushback you geton CG caps is.
You know they got in trafficthat day.
They're already upset, forgottheir coffee and I'm already
going to lose, or they're, orwhat.
I see a lot of this referred.
They refer to me.
They shouldn't see me at all.
(30:24):
I can't really help them.
They waited three weeks to seeme.
I'm I mean, I can't hard tosave this one right.
So, versus, have I used thetools at my disposal to create
the best experience possible?
Speaker 2 (30:34):
so what do I tell my pgi fives?
That are on their way out,getting ready to take their
fellowships, and they're askingme hey, man, so in terms of
looking for a good position, agood job, in terms of the future
, in payer model, what do I tellthem?
Speaker 3 (30:50):
Yeah, I love that, doug, because I think that
dovetails a lot into what welook for in our practice
partners.
So one of the main things thatI do at SCA Health is run a
value-based care partnershipmodel, and we primarily partner
with independent practices butalso health systems and so on.
(31:12):
And so we think about who's thebest fit for that and what's
going to dictate futureperformance and so on.
And so we think about who's thebest fit for that and what's
going to dictate futureperformance, and so on.
And my answer to a lot of thisis thinking about real
performance versus ability toperform.
And when I think about theability to perform in any set of
model, it comes down to theorganizational effectiveness and
(31:35):
culture.
So what I would tell your PGY-5is look for practices who have
solved some difficult problemsas an organization.
That might be the mostimportant thing.
Problems might be top of thatlist or the most visible, but
what has the practiceorganization solved together as
an organization and is thatproblem something that builds
(31:58):
for the future?
So one of my kind of four bigthings to watch for or to solve
for is how do we evolve the waywe deliver care to be at the
forefront of value-based care,to dictate what's going to be
done versus react to it.
And if we do it too far, we, weknow we we're going to, we're
going to bankrupt theirpractices.
We can't completely change thatpayment model, but if we don't
(32:20):
change it all, then we willconstantly be playing catch it.
We'll have no leadership inthat.
And so I think you know you,look at a practice who has, who
has built for the future,without having to be paid for
every piece of thing that theydo, has invested right, and
having to be paid for everypiece of thing that they do is
invested right.
And development of capabilitiesfor the practice.
That's probably number one.
(32:41):
I think that's number one.
I think the other things tolook for are, you know again,
great leaders, great culture.
I mean and that's part of that,of course, but I mean, when
you're in an environment that'sconstantly changing, having you
know your, your leaders are iscritically important.
(33:02):
And it's also amazes me I'msure you see this too how much
an organization reflects itsleaders.
I mean, isn't it incredible howquickly and broadly an
organization will reflect itsleaders, credible, how quickly
and broadly the organizationwill reflect its leaders.
So you know, if you have aleader that you in that practice
that's, that is infected andthey're not going anywhere.
(33:22):
That's how the practice'sculture is going to behave too,
and so I I would be wary of thatwhen you're finding a place.
Speaker 2 (33:29):
Yeah yeah, that's good.
Those are great nuggets.
All right.
Last question for you.
So you are now I am nowappointing you as the secretary
for health and human services.
The Senate has confirmed youand the deal with this is you're
actually stuck in this job forthe next 10 years and what you
do during this next 10 yearsaffects the healthcare of our
(33:51):
nation for the next 20 years.
What are you going to get donein the next 10 years, secretary
Mather?
Speaker 3 (33:58):
Wow, that would be an amazing opportunity.
Speaker 2 (34:04):
I'll sign up for that .
Speaker 3 (34:06):
But my employer wants what I might want.
It could be similar or maybe alittle bit different, but I
think how I would answer that isI would continue to to advance
the accountable care initiative.
I think the I think having therisk in the hands of the
clinicians is is the answer and,as as a you know, hhs and CMS
(34:31):
and so on, important to rememberthat our role is to facilitate
that right it is.
It is not to be in that game.
Role is to facilitate thatright.
It is not to be in that game,it's to facilitate it.
And I think there's more thatcan be done to share learnings,
to learn from what's happeningwhere and so on, and really
drive that, to listen toeverybody that's involved and
(34:52):
really share in a lot of thoselearnings.
But I think, from a specialtystandpoint, we have to figure
out how to really get tomeaningful risk.
The accountable care initiativecannot end with primary care.
It has to involve specialtycare and in that role that's
what I would focus on the next10 years is expanding
(35:16):
accountable care to meaningfullyengage and involve the
specialists.
Right now I think theaccountable care is transferring
it to the primary care providerand then facilitating the
interaction with specialists,but I'm talking about actually
meaningfully transferring thatrisk, making the specialists
(35:37):
accountable in those more typeof global risk models.
That's going to move careforward.
That's going to driveaffordability and really create
something that feels differentto our patients and, in this
case, constituents, if you will.
Speaker 2 (35:52):
Well, if I was elected president, you'd be.
You'd be my secretary of humanservices.
All right, this has beenabsolutely spectacular.
I really enjoyed talking withyou, chad.
So we have had Dr Chad Mather,who is the vice chair of
practice innovation at theDepartment of Orthopedic Surgery
at Duke University, where he'sa hip arthroscopist.
He's also a core faculty memberof the Duke Margolis Center for
(36:13):
Health Policy and the chiefmedical officer of Optimus
Specialty Care.
Chad, thank you so much forbeing on the podcast.
Speaker 3 (36:21):
Great Thanks, doug.
It was great being here, alwaysgreat to talk with you and see
you.
Speaker 2 (36:25):
Absolutely, friend, and y'all look forward to
futures in orthopedic surgery.
Podcast on this podcast channel.
Welcome to the AOA Future in Orthopedic Surgery
podcast series.
This AOA podcast series willfocus on the future in
orthopedic surgery and theimpact on leaders in our
profession.
These podcasts will focus onthe vast spectrum of change that
will occur as the futurereveals itself.
We will consider changes asthey occur in the domains of
(00:43):
culture, employment, technology,scope of practice, compensation
and other areas.
My name is Doug Lundy, host forthis podcast series.
Joining us today is Dr ChadMather.
Dr Mather is an assistantprofessor and vice chairman of
practice innovation in theDepartment of Orthopedic Surgery
(01:04):
at Duke University.
He's a core faculty member ofthe Duke Margolis Center for
Healthcare Policy, as well asthe Chief Medical Officer of
Optum Specialty Care.
He went to medical school andresidency at Duke University,
did his fellowship in sportsmedicine at Rush University
Medical Center and his master'sin business administration at
(01:27):
the Duke Fuqua School ofBusiness.
He is a health servicesresearcher and a decision
scientist with focus on economicanalysis, health preference
measurement and personalizeddecision making.
His clinical practice focuseson hip arthroscopy, including
both FAI and extra-articular hipendoscopy.
(01:49):
Dr Mac there, welcome to thepodcast, sir.
Thanks, doug, it's great to behere.
Thanks for inviting me.
Yeah, chad, great to have youon.
So, chad, when it comes down towhen we're really looking at
changes in payer models as wemove into the future, we're
going to discuss changes inpayer models, as you and I had
discussed.
I don't know anybody that'sgoing to be better to talk about
(02:10):
this than you are.
So can you tell everybody kindof what your other job is
besides being a hiparthroscopist at Duke?
What else do you do for aliving that makes you such an
expert?
Speaker 3 (02:22):
in this.
Speaker 2 (02:22):
Don't be humble, tell it all.
Speaker 3 (02:25):
Well, thanks, doug.
Yeah, I feel like this is atopic I spent a lot of time
thinking about.
You know, it was a passion ofmine before I even went to
medical school and and and.
Then, you know, as a resident,it became more interesting to me
as this became more and more ofa focus of the profession and I
knew I had this interest andand so further developed it.
I was lucky to meet you in theWashington Health Policy Fellows
(02:47):
Program.
That's where I learned a lotabout the advocacy side of it,
how the you know, how thesausage is made and so on,
learned that there's the youknow the regulatory side as well
as the legislative side.
Didn't even know those types ofterms existed for that program.
So that really gave me a greatfoundation for how to be
actionable in the space.
I spent my early faculty years,in the first several years,
(03:07):
doing what I would characterizeas the work in the components of
value-based care, things likeshared decision-making and
patient report outcomes, so onand so forth.
But as we built these reallycool prototypes, I realized that
this was never going to reachscale until we changed the
payment model.
And that was about the sametime.
I was going to Fuqua and thereI took some great classes about
(03:30):
organizational innovation and wecame up with this concept the
practice transformation unitthat you had mentioned there in
the bio and the purpose of thatwas to accelerate value-based
care through development ofinnovative care models that
would illustrate what thatfuture looked like and the doing
further experiments in thecomponents of value based care.
But then, when we're talkingabout today, payment models
(03:53):
change.
The payment models was alsofortunate at that same time for
the Margolis Center to kick off,so we had this great new health
policy center at Duke andpassion for that, and during
that time we spent a lot of timeworking with Kevin Bozic at
Dell and the three of us theMargolis Center, us at Duke,
(04:13):
ortho and him at Dell working oncondition-based payment, and
that was really really had a lotof momentum there.
And then and this is about maybeabout four years ago I started
feeling like we still had somuch yet to answer.
We had so much momentum andhope in North Carolina where we
(04:34):
had some new leadership at ourmain payer, blue Cross, blue
Shield.
There was so much hope that wewere going to be the epicenter
of value-based care.
And then in a moment he moveson and I realized that the
limitations of a single statebeing able to answer these
questions and that's what that'swhat led me to opt in that in
Dan Murray, I mean, having great, great leaders is really
important.
(04:54):
I mean that's really whatallows us to create things that
solve these kinds of problems.
And so you know, those twothings that led me there.
That, with one of my main goalswas to learn, was to.
I saw this landscape of 20markets that we're in and said
you know, we could solve thisproblem 20 different ways and
learn from people solving indifferent ways.
And so it has been the lastfour years doing a lot of
(05:16):
learning like that and observingwhat's going on.
So, yeah, you're right.
I'm glad you asked me to againto come do this podcast because
I can give you a chance to shareall I've learned across our
landscape in that time.
Speaker 2 (05:29):
Yeah, that's fantastic.
I mean you're the right guy totalk to about this and, for
folks who don't know, can youexplain what Optum is and what
your relationship or what yourposition in Optum is about?
Speaker 3 (05:40):
Absolutely so.
That's usually how I startthese talks on the future of
orthopedic financing is kind oflevel setting that there.
So you know, optum is a healthservices organization.
It's a health care deliveryorganization that's part of
United Health Group,no-transcript, an able
(06:16):
hospital-based health systems,and that's one of the things
that drew me to it.
Optum is made up of a few bigentities.
You have Optum Insights, whichis a data analytics arm.
You have OptumRx, which is abig pharma arm, and then
OptumHealth, which is theprimary delivery piece, and then
within OptumHealth you havecomponents that are specialized,
like Optum, behavioral Care,urgent Care, so on, and another
(06:39):
section.
Then you have themulti-specialty or primary care
groups, ipa organizations andnetworks that all take
substantial amounts of risk andheavy value-based care.
And then you have SCA Health,which originally was an
ambulatory surgery company, nowevolved into a specialty
(07:02):
alignment company.
And that's where I formally sit, which is really the best of
everything, because SCA stillhas a lot of its smaller company
culture.
It's, as I like to say, closerto the cellular level of
healthcare.
Sca, because it runs surgerycenters, is only one step above
(07:22):
that.
So it's a wonderful place towork with a beautiful culture,
and yet you know we're part ofthis big organization from a
resourcing and learningstandpoint, so it really is a.
It's a.
It's a wonderful job and veryfortunate to be able to work
there.
Speaker 2 (07:39):
So if we were in a deposition right now, the
attorney would say I'd like tosubmit, Dr dr mather as a
subject matter expert in thisarea.
So clearly you are all right.
So what?
I'm asking everybody, as best asyou can, within the concepts of
reality before you get too farout on the edge and you start
going I can't do that within thenext 10 years, 20 years,
(08:03):
however far out you feelcomfortable doing.
Where do you see payer modelsgoing?
So my residents now who arejust starting my PGY, ones who
still have five years left withus here and then a year of
fellowship and then they'regoing to get their job and pass
their board and all that, sothey really don't get up and
spin it and cranking forprobably another eight to 10
(08:25):
years and then they're going todo another, at least another 10
years of that.
What do I tell them?
This is what pair models looklike that.
Speaker 3 (08:33):
Yeah, that's great.
I love that.
I love that framing.
You know, I think the best wayto start to answer is to take a
moment to better define or atleast renew the definition of
value-based care.
I get that question a lot.
We're at this point now wherepeople are saying what is this?
(08:55):
And I get that question a lot,and so I've thought a lot about
it and the way I like to defineit and I would especially for
young people is that it's valuebased care is financial
innovation.
It's using financial innovationto solve important health care
problems.
You know, the first problemthat we envisioned solving was,
as I mentioned earlier,affordability.
I got really more passionateabout this when I realized it
(09:18):
could solve clinician burnout.
No question that it can andshould solve our prior
authorization and UM burden thatwe face.
It can solve the gaps in carethat we have.
That's where we used it tobuild a whole person
musculoskeletal care model.
It can solve decliningphysician profitability, and
Dominic mentioned why that'simportant.
(09:39):
And then what I think I'vediscovered most recently it can
solve and I'm passionate aboutis health equity.
So, especially for young people, I would suggest they look at
it from that lens.
What problems can we solve byinnovating in the way that we
pay for care and in 10 years.
I think some of it depends onhow well we do with that.
(10:00):
I mean, are we just shiftingthe margins around, creating
just different winners andlosers, or are we truly solving
those problems?
A great example that's verytangible is exactly that
Prioroth, um space.
If taking more meaningfulamounts of musculoskeletal risk
(10:20):
and managing that can alleviatethat burden, then value-based
care has a future.
That's 10 years.
Those are the types of thingsthat we try to focus on is
tangible improvements in thepatient experience, patient
outcomes and our own experiencethat value-based care can solve.
That's going to define thefuture.
Speaker 2 (10:42):
Where do you think let's just go to bundles then?
Speaker 3 (10:44):
Yeah.
Speaker 2 (10:45):
And I know they're coming out.
So BBCI and CJR are nearlydefunct.
Now the federal government'scome out with TEAM transforming,
whatever the rest of that is.
I'm not council chair anymore.
What do you think about bundles?
Are these the rest of that is?
I'm not council chair anymore.
What do you think about bundlesin the?
Are these the wave of thefuture or are these just a flash
in the pan?
Speaker 3 (11:04):
I think bundles are a building block.
Well, the mistake we we, asorthopedic surgeons should not
make is to see those as thestopping point, but they were.
They were a beautiful constructfor us to learn.
What things we did learn is ifyou put risk in a section of the
delivery model, then you canget results.
You know, bundles brought riskto the post-acute phase of care,
(11:27):
and we see improvements in bothoutcomes as well as
affordability in that arm.
The problem with bundles, though, is and this is why I challenge
a lot of surgeons to thinkabout they're built for the
clinician, that's how you wantto manage care, that's how you
want to manage financial risk isin a cell that you can control
(11:48):
the bundle, the episode.
The problem, though and it's ona classic insurance, if you're
taking a risk on something toosmall, it's very volatile, and
so it's thus the benchmarkpricing problem that has
befallen bundles and, I think,will continue to.
Just based on the structure,you know, you have one reference
group that you might price that, that bundle, at, and then
(12:10):
there's a different group thatyou actually take care of, and
that crushes the whole model.
All the all your good work, youwork based on the volatility of
that benchmark price.
So if bundles do have asignificant future on a large
scale, we've got to solve forthat.
The only way I know to do thatis to expand the scope of the
risk that you're taking and sothat you absorb effective
(12:31):
volatility in that way.
So the other problem and thisis so important, doug is that
bundles have made value-basedcare appear to be a joints and
spine initiative.
Right, right, right, and thatis a problem for the practices,
for our practices more than any,because it splits them apart.
(12:53):
And now you've got, okay, we'regenerating money here, we're
maybe distributing it, andthere's tension around that
versus things that everybody canbe involved in.
So that's my other problem withbundles is they're too narrow
to involve everybody.
Speaker 2 (13:06):
Yeah, wow, you almost stepped into narrow networks on
that one.
So you're talking reallyspecifically about
procedural-based bundles bundlesaround total knee arthroplasty,
total hip arthroplasty, spineor proximal femur fractures.
If you want to get into CJR andwell, not CJR, ppci what about
the stuff that Kevin Bozick'sbeen talking about, carl
(13:28):
Koenig's been talking about interms of condition-based bundles
, more or less, and you can eventake that off into decapitated
care if you want.
Speaker 3 (13:35):
Sure, well, that's where I started.
That was my first jump offpoint was condition-based
bundles and I thought that thatwas the solution.
But when we would, we'd makeprogress and I could hear the
you know the sausage being made,if you will, and it was almost
like I could sit.
I could feel the housecollapsing under the weight of
the details.
And it's even even harder todefine things like attribution.
(13:58):
So another when I talk aboutpayment models and I'm really
focused on education, I'll gothrough the list of terms.
You know that it's important tounderstand, to really engage in
this.
Attribution is one of thebiggest and hardest ones.
Attribution means you'reresponsible for this and then we
, you know, pay you as suchProcedural bundles.
The attribution is so easy.
Right, you did a procedure.
(14:20):
I mean you did it.
It's pretty obvious you did it.
Attribution is super easy.
In condition-based bundles theattribution is a lot harder and
that's challenging there.
So you search who's responsiblefor what and when, and then
that affects the course ofpricing and so on.
So the details are challenging.
The other problem withcondition-based models they
don't solve necessarily for theproblem I mentioned about it
(14:42):
being a joints and spineinitiative versus an everybody
initiative, and I think, thecomplexity of condition-based
bundles.
In my career we may only getthrough joints and spine and yet
you know, that's only twothirds really of the opportunity
that is out there.
So those are.
Those are some of the reasonsthat we've kind of decided to
(15:02):
move away from or at least Ithink we should move away
eventually from condition-basedbundles.
That said way the way thatwe're paid and the way we manage
care are not necessarily thesame.
They have to support each other.
But you can.
You can have a payment modelthat is not a bundle and you can
manage care as a bundle withinthat because it's easier.
So the incentives and thethings that we want to do within
(15:25):
condition-based bundles, thefocus on shared decision-making,
patient-reported outcomes, thewhole person care we need to do
that and support that with theright financing model.
I just don't know that thecondition-based bundle is the
one.
Support that with the rightfinancing model.
Speaker 2 (15:38):
I just don't know that the condition-based bundle
is the one.
Yeah, but under theprocedural-based bundle I'm paid
to do surgery.
So if somebody comes in and notthat anybody would do this but
I'm incentivized to do totalknee arthroplasty on somebody
with degenerative knee pain,Whereas if I'm under a capitated
condition-based bundle, if I'mon a capitated condition-based
bundle, I should really onlyoperate the people that, because
(16:05):
we know that not everybody whogets a total knee gets better.
So I should really target thistotal knee arthroplasty for the
people who are specificallygoing to get better and offer
less expensive care to thepeople where that's not going to
help them.
So what, you don't think thatcondition-based bundles help in
that regard?
Speaker 3 (16:18):
I think they're a step in the right direction,
they're another building block,but I don't think they can solve
for everything and I do worrythat the complexity of them is.
I have a framework.
I think about impact versuscomplexity, impact versus
complexity and, you know, Ithink I worry that
condition-based bundles, whilethey should do exactly what you
(16:45):
mentioned, the complexity ofadministering them will prevent
them from growing to the levelthat they should.
And rather, we may look atother, like you say, capitated
models, capitation, broader riskmodels that would create the
same incentives without thecomplexities of definition,
administration, attribution andso on.
Speaker 2 (17:05):
Okay.
I can see that, so that's good,I like that.
So at Optum there.
So you guys, how many lives arey'all covering?
Speaker 3 (17:17):
So you guys, how many lives are you all covering,
gosh?
I mean in total, it's.
You know I don't even know theexact number, it's, you know
hundreds of thousands, millionsof lives.
You know mostly MedicareAdvantage.
Speaker 2 (17:28):
Yeah, sure.
Speaker 3 (17:29):
Then we manage commercial as well, and so on.
Speaker 2 (17:32):
Yeah, and to your earlier point.
I mean the bundles are, if thebundles are anything at all, the
PPCI, cjr, or you can even putthat into MACRA with the APMs
and MIPS.
If you want to talk aboutcomplexity, they have achieved
that, wouldn't you agree?
I mean anything the federalgovernment comes out with.
I mean you just hope your headdoesn't explode as you're trying
(17:52):
to read it.
I don't know how anybody'ssupposed to get that done.
Speaker 3 (17:56):
There's also a one size fits none problem there too
, right right Now.
That, yeah, that we have.
So I think you know models thatallow for more.
You know more flexibility.
More you know can be, I think,can work better.
Now I often say too that it'sjust the complexity sits
somewhere, you know, I mean, ina condition-based bundle there's
(18:22):
a lot of complexity on thepayer side because they've got
to administer all that.
If you know, say, now thealternative side is something
like you mentioned cavitation,where we're just paid a fee, we
still have to figure out on thepractice side how to distribute
that money in a way thatgenerates the incentives, right.
We have to figure out who doespractice side, how to distribute
that money in a way thatgenerates the incentives right.
We, we have to figure out whowho does what and when and how
in order.
(18:42):
And so I, I, you know, one ofthe things I I learned from a
lot of my people I work with iswe would talk about these, these
condition-based bonos, at ahigh level and then they'd look
at me and say, yeah, I get it,but how do I pay my people?
So, right, right, yeah, right.
So the complexity just getsshifted to us.
But I would say I'd rather, asclinician leaders, be managing
(19:05):
that complexity rather than haveit being managed for me.
Speaker 2 (19:08):
Yeah, you just went where I was trying to get to.
Whereas we assume the risk,then If we have in our group, in
our university setting, in ourhospital setting, we assume the
risk on the condition-basedmental health setting and yet
pay us the capitated fee, we'lltake care of the population and
then we'll figure out how to paypeople from that capitated
payment.
Speaker 3 (19:27):
That's right.
Speaker 2 (19:29):
Wow, Chad, we're in the deep end of the pool here.
Speaker 3 (19:33):
I hope we can get to that point, but what we think is
an in-between, that is, thatbalance of complexity and
opportunity is just short ofcavitation, which is still
global risk.
So it's just saying you'retaking a risk on the whole MSK
if you will, but it's stillretrospectively, it's not
prospective.
So the difference betweencavitation and global risk
(19:55):
models capitation is prospectiveand, as we know from
prospective bundles, it'spowerful but it is disruptive,
right, and it is hard to manage.
And I you know your questionabout 10 years.
I hope we can get to reallyeffective capitative models in
10 years.
We would be doing well if wedid that in 10 years.
Right, right, that's what we'dall like to get to, but it's
(20:17):
hard, it's hard to.
We're not used to that, as youknow that we're used to do it.
So you know RVU models and CPTcodes and I do this work and I
get, and I get paid right, likethe.
The fever service system is sotransparent, it's so predictable
because it's based on work andyou understand work, right, and
(20:39):
when you move away from that boyit is, it's dark, I mean it's
it's.
You know you're in a darkforest and trying to find your
way and we have to be honestabout how hard that's going to
be.
Speaker 2 (20:49):
You know um so I think that's the most eloquent
I've ever heard that said I'mnot kidding.
I mean I really, because I'vebeen thinking of this whole time
and yeah, all right, you justsaid it all.
I was talking aboutconsolidation.
So at Optum, y'all haveconsolidated a fair amount.
How does consolidation of thepayer market?
How is that going to impact usin the future?
(21:10):
What does that look like?
Speaker 3 (21:12):
Yeah, yeah, I mean I think you know, I don't know, I
don't, I don't spend a lot oftime on that side of the house.
Probably they would want me tocomment on a lot on it anyway.
I mean, from a from a, from ourside you know, the clinician
side, the, the, you know, thesurgeon leaders side, I I think
there is some benefit to someeconomies of scale.
(21:33):
I think when you can movethings state to state so you
have payers that cross thestates and you can say we did
this great thing in Pennsylvaniamodel worked great, let's take
it to North Carolina.
When you have a payer that cando that, a national payer that
can do that, can transport thosethings, that does allow this to
grow a lot faster At the sametime, this to grow a lot faster
(21:58):
at the same time.
You know, competition is greatand and competition drives
innovation and um, and I thinkyou, you, uh, you want to be in
a place where there are multiplepayers trying to solve the same
problem, because we stillhaven't solved for it all.
So there's some balance there,and so I guess if I was picking
the perfect type of environmentto drive payment innovation, I
would say it's, it's, you knowcompetition in the markets
(22:21):
themselves with nationalrelevance, you know.
So.
You know where there was wherethe same payer had a significant
you know market share in anumber of states, but maybe not
a you know, a dominant share inany one single state.
Speaker 2 (22:35):
Yeah, it's.
It's great hearing you say that, because when I was at
resurgence I knew that danmurray was doing some really
cool stuff in ortho carolinawith the blues and we're like
man, we want to move that downto georgia, down to atlanta, and
uh, no, go buddy, it didn't.
It didn't cross over statelines that's right, it's like
what do you mean?
Come on, dan, and dan was morethan happy to share what they
(22:55):
were doing in North Carolina,but the Blues wouldn't let us do
it.
Speaker 3 (22:59):
That's right, that's right.
Speaker 2 (23:01):
Another question I had for you is and you learned
this in business school, I amabsolutely certain is that if
you look, if you talk to thepundits, they say we pay way too
much for health care in the US,that that is more than twice as
expensive as other developednations in the world, without
any increased evidence ofquality.
So we're just super expensive,without any demonstration for
(23:23):
that increase in cost.
And you work with one.
I certainly don't want to putyou in a conflict, but you work
with one of the big payers.
Do you feel that stress thatpeople are?
Because whenever I talk to thefolks inside the Beltway in DC,
I feel that stress.
Do you feel that stress that,man, our health care costs way
(23:45):
too much.
We got to find ways to deliverthis less expensively.
Speaker 3 (23:50):
Definitely.
I mean definitely.
There's no question that whenthe risk is shifted to the
clinician and you know thataffordability pressure is real.
But I'm glad you asked thisquestion though, because this
came up with recently.
You know, one of my partners,one of our great clinical
partners, said you know, I don'tknow about value-based care.
Are we just shift, like I said,shifting the margins around,
(24:12):
and is a patient ever going tosee the benefit of this and so
on, shifting the margins aroundand is a patient ever going to
see the benefit of this and soon?
And I said you know we should.
We should, in our back of ourmind, question whether they even
want to spend less onhealthcare.
I know that might not be, youknow that might be controversial
, but but I think more what theywant is more for what they are
paying.
You know the society wants morefor what we're paying on
(24:35):
healthcare.
I think in this country we dovalue our health care a lot.
I think we value our access tohealth care a lot.
We value our health a lot, andI think we're just not getting
enough for what we're spending.
I might argue that that'sactually what value-based care
is supposed to drive.
That's why I like to introduceit as solving these problems.
Solving these problems.
One of them is the cost of care, but I think I listed five or
(24:57):
six right.
So I would challenge that, andI think thinking about it in
that way helps you understandwhat any stakeholder wants out
of this.
The other problem, though andone of my payer friends told me
this was great insight he said Iasked him is quality or cost
more important?
Because when you're selling,when a payer is selling a health
(25:20):
plan, they can buy it on anynumber of things, and people
want good health coverage, theywant good care, right?
He said that's not the problem.
The problem that you knowquality is important.
It's not that quality is notimportant.
Quality is harder to see.
The cost of care.
The premium amount is sotransparent, right.
(25:41):
You know what a few cents is.
You know exactly what it meansin your budget to pay this much
more money a month.
The employer knows exactly whatthat's going to do to their
budget.
When you show them what qualitycare is, don't know exactly
what that means, right.
And when you're trying tochoose between things,
everything from a qualitystandpoint probably looks
similar, but the cost it's veryclear to see the difference, so
(26:04):
it's not about I think it beingmore or less important quality
versus cost.
Speaker 2 (26:13):
I think it's about how easy it is to measure it and
see it.
All right, you brought it up.
So I had lunch the other daywith our vice chair of family
practice in our system, yeah,and he was telling me and my
diet partner that he, that hisdoctors, get bonused based of
the diastolic blood pressure andHBA1C that's measured over the
year on their captured patientsin Epic.
(26:34):
So how do you measure quality?
That's a great measure, it's anice, hard, objective number
right.
How do you measure quality inorthopedics, then?
Speaker 3 (26:45):
Yeah, great question, just off of pros or what.
Well, the first thing I wouldsay is that's the single most
important question and challengethat we have to advance
value-based care.
I realized that in this lastyear that value-based care lacks
a measurement system,especially in specialty care.
(27:06):
The primary care space has theSTARS system.
They have this robust way ofevaluating quality within their
risk-based model.
We have almost nothingevaluating quality within their
risk-based model.
We have almost nothing.
And yet in the fever serviceworld, we've got so many metrics
that tell you how you're doing.
And so I think the message I'vebeen sending more and more is
(27:26):
that we have to get to ameasurement system that we build
.
We want to be building this.
We don't want to have it builtfor us, which it is being built
for us.
We want to be building that,and we have to be serious about
getting you something feasible,not just something perfect, but
something feasible.
I think that's I guess that'smy main message is this
(27:48):
measurement system is imperative.
How we measure quality, thenyou know, I think with it varies
.
I think you've got to look atthe stakeholder, I think you
have to look at what's important, and there's measuring quality
and outcomes, and then there'sassessing performance within
that system.
Different things right.
One of my favorite books is DaveJessivar.
(28:08):
I love that I heard him sayrecently.
I really love this concept ofresulting he talks about.
Speaker 2 (28:15):
Yeah, CEO at OrthoVirginia.
Yeah, CEO at OrthoVirginia,yeah.
Speaker 3 (28:17):
CEO at OrthoVirginia about the result you get, the
outcome.
The hemoglobin A1C may or maynot be related to the decisions
you make.
You may make a bad decision.
They may have a good outcomeand vice versa.
Right?
So we have to balance theoutcome the prom with our
ability to manage it.
And that takes me to theimportance of experience.
(28:38):
Right, you know, I had anotherday at a personal experience
healthcare and had a lot ofthose lately with my family.
I am often so struck on howimportant a great experience is.
I mean, it's something that haseverything to you, right?
I mean it connects you to thesystem, that connects you to
your family.
It is, it is so criticallyimportant and I know we don't
(29:02):
it's not that we don't thinkit's important, but that's
something we can control Right?
I think a lot about when wemeasure performance and what's
important about, about focusinga lot on on on the experience to
healthcare.
Speaker 2 (29:16):
So the CG caps and H caps actually accurately reflect
that or no?
Speaker 3 (29:22):
I think.
I think, again, that's a stepin a direction.
I don't think they capture itcompletely.
I think the way they'remeasured is questionable too,
and the way that we use it as abenchmark, I think, is
questionable too.
I think, yeah, I mean, there'sa lot, a lot of different ways
of measuring.
I mean, another way to assessexperience can be the use of
things that we know drives goodexperience.
(29:43):
If you're using shareddecision-making tools, if you
are reviewing patients' problems, you're probably providing a
better experience, right, and sothat gets again into, you know,
the things I can control as adoctor that I want to be
measured on.
I want to be measured onwhether I look at their problems
and talk to them about it, nothow they interact with the
receptionist.
(30:04):
Now, that's important and I gotto quarterback that Right.
But that's the pushback you geton CG caps is.
You know they got in trafficthat day.
They're already upset, forgottheir coffee and I'm already
going to lose, or they're, orwhat.
I see a lot of this referred.
They refer to me.
They shouldn't see me at all.
(30:24):
I can't really help them.
They waited three weeks to seeme.
I'm I mean, I can't hard tosave this one right.
So, versus, have I used thetools at my disposal to create
the best experience possible?
Speaker 2 (30:34):
so what do I tell my pgi fives?
That are on their way out,getting ready to take their
fellowships, and they're askingme hey, man, so in terms of
looking for a good position, agood job, in terms of the future
, in payer model, what do I tellthem?
Speaker 3 (30:50):
Yeah, I love that, doug, because I think that
dovetails a lot into what welook for in our practice
partners.
So one of the main things thatI do at SCA Health is run a
value-based care partnershipmodel, and we primarily partner
with independent practices butalso health systems and so on.
(31:12):
And so we think about who's thebest fit for that and what's
going to dictate futureperformance and so on.
And so we think about who's thebest fit for that and what's
going to dictate futureperformance, and so on.
And my answer to a lot of thisis thinking about real
performance versus ability toperform.
And when I think about theability to perform in any set of
model, it comes down to theorganizational effectiveness and
(31:35):
culture.
So what I would tell your PGY-5is look for practices who have
solved some difficult problemsas an organization.
That might be the mostimportant thing.
Problems might be top of thatlist or the most visible, but
what has the practiceorganization solved together as
an organization and is thatproblem something that builds
(31:58):
for the future?
So one of my kind of four bigthings to watch for or to solve
for is how do we evolve the waywe deliver care to be at the
forefront of value-based care,to dictate what's going to be
done versus react to it.
And if we do it too far, we, weknow we we're going to, we're
going to bankrupt theirpractices.
We can't completely change thatpayment model, but if we don't
(32:20):
change it all, then we willconstantly be playing catch it.
We'll have no leadership inthat.
And so I think you know you,look at a practice who has, who
has built for the future,without having to be paid for
every piece of thing that theydo, has invested right, and
having to be paid for everypiece of thing that they do is
invested right.
And development of capabilitiesfor the practice.
That's probably number one.
(32:41):
I think that's number one.
I think the other things tolook for are, you know again,
great leaders, great culture.
I mean and that's part of that,of course, but I mean, when
you're in an environment that'sconstantly changing, having you
know your, your leaders are iscritically important.
(33:02):
And it's also amazes me I'msure you see this too how much
an organization reflects itsleaders.
I mean, isn't it incredible howquickly and broadly an
organization will reflect itsleaders, credible, how quickly
and broadly the organizationwill reflect its leaders.
So you know, if you have aleader that you in that practice
that's, that is infected andthey're not going anywhere.
(33:22):
That's how the practice'sculture is going to behave too,
and so I I would be wary of thatwhen you're finding a place.
Speaker 2 (33:29):
Yeah yeah, that's good.
Those are great nuggets.
All right.
Last question for you.
So you are now I am nowappointing you as the secretary
for health and human services.
The Senate has confirmed youand the deal with this is you're
actually stuck in this job forthe next 10 years and what you
do during this next 10 yearsaffects the healthcare of our
(33:51):
nation for the next 20 years.
What are you going to get donein the next 10 years, secretary
Mather?
Speaker 3 (33:58):
Wow, that would be an amazing opportunity.
Speaker 2 (34:04):
I'll sign up for that .
Speaker 3 (34:06):
But my employer wants what I might want.
It could be similar or maybe alittle bit different, but I
think how I would answer that isI would continue to to advance
the accountable care initiative.
I think the I think having therisk in the hands of the
clinicians is is the answer and,as as a you know, hhs and CMS
(34:31):
and so on, important to rememberthat our role is to facilitate
that right it is.
It is not to be in that game.
Role is to facilitate thatright.
It is not to be in that game,it's to facilitate it.
And I think there's more thatcan be done to share learnings,
to learn from what's happeningwhere and so on, and really
drive that, to listen toeverybody that's involved and
(34:52):
really share in a lot of thoselearnings.
But I think, from a specialtystandpoint, we have to figure
out how to really get tomeaningful risk.
The accountable care initiativecannot end with primary care.
It has to involve specialtycare and in that role that's
what I would focus on the next10 years is expanding
(35:16):
accountable care to meaningfullyengage and involve the
specialists.
Right now I think theaccountable care is transferring
it to the primary care providerand then facilitating the
interaction with specialists,but I'm talking about actually
meaningfully transferring thatrisk, making the specialists
(35:37):
accountable in those more typeof global risk models.
That's going to move careforward.
That's going to driveaffordability and really create
something that feels differentto our patients and, in this
case, constituents, if you will.
Speaker 2 (35:52):
Well, if I was elected president, you'd be.
You'd be my secretary of humanservices.
All right, this has beenabsolutely spectacular.
I really enjoyed talking withyou, chad.
So we have had Dr Chad Mather,who is the vice chair of
practice innovation at theDepartment of Orthopedic Surgery
at Duke University, where he'sa hip arthroscopist.
He's also a core faculty memberof the Duke Margolis Center for
(36:13):
Health Policy and the chiefmedical officer of Optimus
Specialty Care.
Chad, thank you so much forbeing on the podcast.
Speaker 3 (36:21):
Great Thanks, doug.
It was great being here, alwaysgreat to talk with you and see
you.
Speaker 2 (36:25):
Absolutely, friend, and y'all look forward to
futures in orthopedic surgery.
Podcast on this podcast channel.
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