In its new venture with ValueHealth, University Hospitals aims to offer bundled-payment models for certain procedures at a series of new ambulatory surgery centers in Northeast Ohio that the two are developing as part of UH's value-based strategy.
So far, the two have announced centers in Lorain County and Medina, with plans for more in the region. The outpatient facilities will offer total joint replacement care and may expand to include other complementary multi-specialty surgical care such as ENT and pain management. In collaboration with ValueHealth — a Leawood, Kan.-based healthcare services company that operates Ambulatory Centers of Excellence — UH is working to provide many such procedures in a bundled model, offering a predictable price for payers and employers.
"We know the cost of healthcare is continuing to go up and the challenges that come with reimbursement and hospital funding," said Dr. James Voos, chair of orthopedics for UH. "So our hospital leadership looked toward the future to see what's the best way to continue to provide that incredibly high quality of care that we're used to delivering in an academic healthcare system with the very high efficiency setting of ambulatory surgery centers."
Beyond the ongoing growth driven by potential promise of lower-cost care, the ambulatory surgery center model has also gained traction in the past year during the pandemic. The postponement of nonessential surgeries last year revealed some of the disadvantages to having care centralized in one facility, said Don Bisbee, ValueHealth CEO. Although the halt on nonessential procedures had a slew of reasons beyond shared physical spaces, it did raise questions of the benefits of smaller, separate facilities to cleanse and operate safely.
"Having these alternate sites of service that can be used to provide surgery and keep that part of the healthcare system moving I think was an eye opener for many," he said.
Bisbee believes COVID-19 ultimately may help accelerate the rise of ambulatory surgery centers.
In addition to being able to control the environment and patients who would be coming to a free-standing facility offering, for instance, orthopedic surgery, consumers may also be more comfortable with these smaller outpatient options, said Tom Campanella, healthcare executive in residence at Baldwin Wallace University. People were uncomfortable going into the hospital setting during the height of COVID-19, and many of those concerns may linger, he said, even though hospitals are safe.
UH and ValueHealth began exploring a partnership early last year and had initially planned to open centers one at a time.
"We had a little more conservative timeline, but then with COVID coming on board, we really amplified our timeline," Voos said. "Seeing this was a very valuable thing to add to our patients, we announced those multiple locations. And instead of doing one at a time, we've decided to essentially overlap where we're starting to layer in multiple of these locations all at once."
Though details and layout are still in progress, the Lorain County center is expected to be between 60,000 and 70,000 square feet. The Medina facility is expected to be about 20,000 to 25,000 square feet. Both are new builds, and future centers will be a mix of new construction and converting existing assets to this model, Voos said.
UH began implementing its value-based strategy more than six years ago with direct-to-employer contracts with national companies, such as Walmart and GE, which bring employees from across the country for care at UH through guaranteed bundled packages. The ValueHealth partnership is a chance to dive into that concept further, Voos said.
"ValueHealth has a track record working with major insurers and companies in providing bundled services, in particular bundled joint replacements," he said. "So the combination of ValueHealth's experience in the ambulatory surgery, orthopedic market and their track record working with employers on bundled insurance models made them a very natural partner for what we were looking for."
For its part, ValueHealth was looking for a partner in Ohio, where it felt there was an appetite for more value-based care, Bisbee said, adding that UH stood out among its options.
Value-based care "is something that I think is ingrained in that organization as a way to kind of take their differentiation and value proposition to the communities they serve to the next level," he said.
Oftentimes, hospitals and providers tend to look at the healthcare cost picture through their lens, without taking in the broader picture of considering the purchaser perspective, which hinders efforts to reach value, Campanella said.
He applauds UH's recognition both that value-based structures are the future "and also recognizing that you don't have to do everything on your own and sometimes collaborating with third parties that are really good at things makes a lot more sense." In particular, he said, ValueHealth has experience in bundled payments and value-based models.
UH has other ambulatory surgery centers, but those it has announced and plans in conjunction with ValueHealth are unique for a few reasons. These will be the first to offer joint replacement and the only UH will have developed in partnership with a third party. They'll also include post-surgery Stay Suites — essentially orthopedic hotel rooms not classified as inpatient hospital beds — where patients can stay overnight.
The venture also allows both UH employed physicians and other high-quality independent physicians in the community to use the facilities as long as they follow the same safety and quality protocols, Voos said.
"This is one of those opportunities to collaborate and partner with those independent physicians under one roof," he said, noting that UH offers the quality control and ValueHealth would help deliver the operations to make that all possible.
