Co-Management Arrangements in Orthopedic Surgery
A co-management arrangement (CMA) is a contractual relationship between physicians and a hospital that results in a shared-responsibility management structure for a specific service line. In orthopedic surgery, CMAs are becoming increasingly popular as stakeholders in the health care market seek increased value (ie, higher-quality care at lower costs). A CMA can significantly improve the efficiency and the outcomes of a musculoskeletal service line if it adheres to the basic principles of a focus on the patient, evidence-based decision-making, physician leadership, appropriate physician compensation, transparency, reasonable and modifiable goals, and accountability. While the specifics of each CMA will vary, all CMAs have common operational elements that include the arrangement’s legal structure, legal compliance, leadership and reporting structure, facilities management, personnel management, clinical data management, financial data management, and quality and effectiveness reporting.
In the post–Affordable Care Act landscape of American health care, an explosion of alternative payment methods and other creative initiatives has occurred as patients, providers, and payers all seek higher-quality care at lower costs.1 These factors impact every level of the health care system, from large academic medical institutions in major cities to small single hospitals in rural community settings.2 Co-management arrangements are among the many innovative organizational structures that have arisen with the goals of efficiency and quality. For many reasons, a co-management arrangement has specific applicability and appeal in orthopedic surgery, and the popularity of this form of physician–hospital alignment is growing.3
Definition
In health care, and particularly even within orthopedic surgery, the term co-management can have multiple definitions. It can refer to shared responsibility for patient care across service lines—such as the “co-management” by both hospitalists and orthopedic surgeons of elderly patients with multiple chronic medical comorbidities as well as an acute hip fracture or a total knee replacement.4-7 In academic settings, it may refer to the delegation of duties from attending professors to residents in co-managing patients.
In the realm of health care business and finance, however, the term co-management arrangement (CMA) refers to the shared responsibility for a hospital service line by the hospital administration and the physicians involved in that service line. While the basic concept is not necessarily a new one, it is growing in popularity and expanding in scope, creative application, and effectiveness within the current post-reform environment.8 This model of clinical and financial integration has been implemented in multiple different medical subspecialties, from cardiology and oncology to gastroenterology and vision care.9,10 As applied to orthopedic surgery, CMAs create a situation in which orthopedic surgeons participate intimately in the management of the entire musculoskeletal service line, including inpatient and outpatient services. Orthopedics was identified as 1 of the top 3 specialties for clinical CMAs (after cardiology and imaging) in a recent survey of more than 258 hospital executives.11 Because orthopedic surgery represents an extremely profitable service line for most hospitals, it becomes an ideal target for optimization under a CMA because even relatively small percentage increases in efficiency or profitability can pay relatively large dividends for the hospital.12
Under a CMA, the physicians are compensated for their time and efforts, and they provide services across clinical and nonclinical areas. Because orthopedic surgeons are most familiar with the details of their specialty and the unique needs of their patients, they are the best suited to make decisions, both clinical and nonclinical, that impact the provision of that care. The details of individual CMAs will vary based on specific situational factors, but the common goal of improved patient care and greater economic efficiency drive the underlying theme of shared responsibility and physician–hospital alignment.13
A CMA is different from some other recent innovative forms of organizational or financial structure. A CMA is not the same as direct employment14,15 or “pay-for-performance,”16 because both of these methods of physician–hospital alignment lack the incentivized structure of a CMA. While a CMA is similar to a “gainsharing” arrangement because both hospitals and physicians benefit, it has a very different legal structure.17 A CMA also resembles a joint venture, but it differs in its goal of a focus on management roles.18 Bundled-pricing arrangements tend to focus on the end-price of an “episode of care” rather than the system that provides it.19 While CMAs may be more involved than many other forms of organizational structure, a CMA does not have the level of complexity and interaction required for a formal accountable care organization (ACO).20
Principles of Co-Management Arrangements
Because countless variances exist across the country within local and regional orthopedic markets, no single prescription for success exists to guide co-management arrangements for every potential situation.21,22 Several basic principles, however, should characterize any attempted CMA. Without a foundation in these principles, the CMA may risk suboptimal performance or overt failure.
Focus on the Patient
The most basic shared concern of the 2 parties of a CMA (surgeons and hospitals) is the patient. While each side may have different strengths and varying methods of reaching clinical and financial goals, they should be able to agree on the fundamental idea of patient-centered care. Indeed, the patient experience has become a popular buzzword in many areas of medicine,23 and it particularly applies as a foundational principle of CMAs. A focus on the patient does not directly guarantee success, because there are numerous other details and features of a productive CMA. Failure to focus on the patient, however, will lead to problems.
