Analysis: Musculoskeletal issues are a pain in employers’ . . . wallets

• Recent survey findings show 44% percent of employers ranked musculoskeletal issues as the top condition impacting their costs while 85% ranked it among the top three conditions.
• The focus on musculoskeletal issues creates opportunities for health systems that can manage the total cost of care for orthopedic conditions.
• It’s not hard to imagine more employers will explore center of excellence relationships for conditions like spinal fusion and joint replacement surgeries given the successes of pioneering employers such as Wal-Mart.

This year’s National Business Group on Health (NBGH) survey finds:

• 44% percent of employers ranked musculoskeletal issues as the top condition impacting their costs
• 85% ranked it among the top three conditions

It’s not surprising then that many believe that virtual care management for the condition has the greatest potential for growth.

The survey also finds that 23% will offer musculoskeletal management virtual services next year, another 38% are considering it by 2022.

Rich Daly, HFMA senior editor, is also reporting that large employers continue to expand several types of programs that could mitigate costs. Among employers surveyed, planned 2020 offers of such assistance programs include:

78% to offer medical decision support or second opinion services versus 71% in 2019

73% to offer employee-advocacy tools versus 65% in 2019

60% to offer concierge services for navigating the health system versus 39% in 2019.

Takeaway

The focus on musculoskeletal issues creates opportunities for health systems that can manage the total cost of care for orthopedic conditions. It’s not hard to imagine more employers will explore COE relationships for conditions like spinal fusion and joint replacement surgeries given the successes of Wal-Mart and other pioneering employers in this area. For example, a joint replacement episode at a Wal-Mart Centers of Excellence (COE) costs an average of 18% less than a non-COE provider.

Which organizations stand to grow market share, and which may lose it

So, for hospitals, health systems and orthopedics groups whose risk-adjusted rates of surgery per 1,000 are lower than the national average and have a successful track record of managing Medicare episodes, this may create an opportunity to capture share in a growing market.

Moving forward, it will also be important to ensure that the procedure is performed in the most appropriate setting (inpatient versus outpatient) based on the patient’s clinical condition. Given that many of these folks are working, it’s likely they’ll be healthy enough for the outpatient setting.  

However, for those hospitals and orthopedics groups that can’t manage the total cost of care or have high-risk adjusted utilization rates, employer interest in providing virtual care management for musculoskeletal issues coupled with increased employee access to second opinion and navigation services poses risks to existing volumes.

Wal-Mart’s COE outcomes for patients

Again, Wal-Mart’s experience with COE providers is instructive. More than half of COE patients referred to a Wal-Mart COE for spinal surgery avoided it either as a result of misdiagnosis or the patient choosing a more conservative care plan after discussion their options and prognosis with a COE physician. The rate for joint replacements was 20%. And that’s what the second-opinion service is looking to replicate.

One can imagine that the concierge service will help patients navigate both the delivery system and their benefit designs. And as a result, I also expect a shift in utilization to lower-cost sites of service.