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How Musculoskeletal Claims Are Impacting Employer Health Costs

The hidden effect beats out cancer and heart disease.

Cyndie Ewert could hardly believe it. Musculoskeletal claims at Vistra Energy—once a top line item among the healthcare procedures it subsidized for its 4,500 employees—had plummeted by 33 percent in just one year, an amount equal to $663,000. The company needed to pare down how much it was spending, and Ewert, the vice president of HR operations, incentivized employees suffering from back pain and similar conditions to visit a chain of providers that didn’t so much as own a scalpel. Surgeries tumbled. Plus, the employees were returning to work quicker and often without having to recover from an invasive procedure. All it cost them was $25; the company covered the rest.

Vistra Energy (at the time, in 2013, it was Energy Future Holdings; it got the new name after emerging from bankruptcy) turned to a San Antonio-based provider of physical rehabilitation called Airrosti. It offers a treatment method that was developed in-house; all of its caregivers spend six weeks at headquarters learning it before fanning out across the state. It is designed to vanquish clinical variability on how musculoskeletal conditions are treated. The gist: Providers spend a whole hour with the patient. They assess the ailment through a series of detailed questions. They then engage in what’s known as manual therapy, using their hands to eliminate restrictions within the muscle, connective tissue, and joint ligament tendons, helping to strengthen and repair the damaged areas causing the pain. Using data, Airrosti CEO Sean Tipton says they’ve proven that most patients will be better in no more than three visits, so long as they continue the out-of-office rehab exercises. And if they aren’t, it’s time to consult a specialist who may need a blade. That’s not to say the therapy is particularly pleasant. But the company says it’s proven to be effective. Here’s how Chris Cato, the VP for clinical development, describes it: “The sooner you can put a patient into functional stress, the faster and safer they’re going to recover.”

Ewert realized that the care strategy each ailing employee received was predicated upon which door they walked into. Orthopedic surgeons often believe they can fix the problem on an operating room table. Physical therapists believe they can fix it with their hands. There’s nothing inherently wrong with their approaches, but both carry significant costs. Surgeries require imaging and an operation and recovery time and often pharmaceuticals. Physical therapy usually involves imaging and trips to numerous specialists. Compass Professional Health Services, which performed the initial audit to identify potential savings, surprised Ewert when it found that the company, like most, was spending more on musculoskeletal conditions than any other, surpassing even cancer and heart disease.

“A lot of these were hip and knee replacements,” Ewert says. “Of course, there’s a lot of variability about where you have it done, but was that the first place you should go? Is surgery the right answer? Where you start in the episode of care affects your outcome.”

Orthopedic surgery is big money for providers. According to Irving physician recruitment firm Merritt Hawkins, a single orthopedic surgeon generates for his or her hospital $2.75 million a year, more than any other specialty. All the while, the effectiveness of surgery to fix back pain has been questioned by major medical journals. The Annals of Internal Medicine last year found that physical therapy is often as or more effective than surgery for treating lumbar spinal stenosis. In 2009, the Journal of the American Academy of Orthopedic Surgeons recommended physical therapy as the first course of treatment for patients with lumbar degenerative disc disease. Den Bishop, the president of Dallas consulting firm Holmes Murphy, says musculoskeletal conditions infect nearly every segment of a company’s healthcare expenditures. The expenses sail into worker’s compensation, into emergency room utilization, into pharmaceuticals, into imaging, into surgeries.

“It’s not until [employers start] to take all of those pieces of the puzzle and put them together that they realize how expensive this expense is,” Bishop says. “We’ve got a major issue with pain.”

U.S. healthcare costs are still increasing faster than inflation. Companies have shifted more of the cost of care onto employees through high deductibles and health savings accounts. According to the Kaiser Family Foundation, the average deductible has sailed from $303 in 2006 to $1,077 today. As many experts have observed, companies simply cannot keep pushing costs onto its employees. The strategy to lower costs is now found within the medicine itself—what is wasteful, what is necessary, and how do you ensure that your employees are receiving the right treatment in the right setting?

“We’ve got to get the condition process mapped out,” says David Toomey, a healthcare consultant (and ex-Compass analyst) who advises the Dallas-Fort Worth Business Group on Health. “We need to make sure we involve all the different stakeholders in this discussion.”

These stakeholders are hospitals, insurance companies, physicians, and employers. And Toomey wants them in one room, all ironing out the topic. The DFW Business Group on Health counts more than 75 of the region’s large employers among its members (American Airlines, BNSF Railways, 7-Eleven, and so on) and, alongside Toomey, has organized an initiative to establish best practices for treating musculoskeletal conditions that cut down on unnecessary imaging and procedures. The insurance plans help identify the region’s high-volume providers. Once they can prove they’re adhering to a standardized plan of care, employers would incentivize their employees to visit those providers. Providers who refuse wouldn’t get the patients. Marianne Fazen, the business group’s president, says the providers have all been eager to participate. But they were not eager to discuss the initiative with D CEO at the time this article went to press—it’s too soon in its development.

“If the patient is inconvenienced for six months and could’ve taken three… then why are we doing this?”

Marianne Fazen, The DFW Business Group on Health

The push itself is modeled of off work done in 2007 in Seattle. There, Virginia Mason Medical Center paired with Aetna Inc. and employers like Starbucks and Costco to drill down their healthcare costs after the employers began balking at sending their employees to the hospital. The prices were too high. The decision prompted Virginia Mason to cut down on pricy, unnecessary MRIs and other tests by defining best practices and actually following them. The Wall Street Journal dedicated a long feature to the initiative, finding that the hospital’s approach to back pain treatment before the initiative cost about double what the new approach does. Virginia Mason dropped the per-patient physical therapy cost from about $2,100 to $900. According to the article, the process streamlined how quickly a patient met with a doctor. Those with complicated back pain were placed in physical therapy, bypassing three steps that the physicians previously followed—no meeting with a specialist, no mandatory diagnostic test, no follow-up with doctors, all of which typically occurred before a patient was referred to physical therapy. They will likely need to learn from the conclusion of that project. Hospitals are tricky beasts. Virginia Mason noticed that this new method had torpedoed their spine clinic’s profits. Staffers left, frustrated at the decrease in operations. The hospital argued that the new method was unsustainable. Aetna had to boost the reimbursement rates for physical therapy.

And so nimble providers like Airrosti may have a less complicated route to savings. Dr. Daryl Laney, CEO of Neuromuscular Corporate Solutions, actually sets up shop in empty offices at its employer partners. It’s a smaller operation than Airrosti. Currently it works with Sabre and Atmos, traveling to 19 locations in five different states a couple times a week. Since 2011, NCS has treated nearly 10,000 injuries over 32,000 sessions. Laney says he has a 90 percent success rate in fewer than four visits. He focuses on noninvasive rehabilitation by repairing damaged soft tissue and learning the root cause of the injury, which informs his onsite treatment plan. That’s the sort of uniformity that employers are pushing toward. They want to know the value of the care that their employees are receiving.

“Let’s do what’s best for the patient, let’s put the patient first,” says Fazen of the DFWBGH. “If the patient is inconvenienced for six months and it could’ve taken three months or even a month to have it resolved through lesser intervention, then why are we doing this to the employee?” 

Matt Goodman is senior editor of D CEO and editor of D Healthcare Daily.

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