The Price of Surgery – Beyond the Hard Costs: A Case for Neuroscience and Bundled Payments
By Scott Leggett
There is a cost to healthcare that is often overlooked. This cost does not appear directly on medical charts or profit and loss statements or in budgets, but it is a real cost nonetheless. And it is a cost that plays out in the patient’s health and well-being as well as their financial well-being.
Moreover, it is a price primarily borne by patients, though it may be a surprise that surgeons may incur unexpected related costs — more on that in a moment.
We call this cost “healthcare financial anxiety” (HFA), the symptoms of which are mental and physical stress related to the impact on one’s life by an unplanned medical procedure. Simply put, patients are anxious about the financial implications if they suddenly face an unexpected medical procedure, serious injury, or long-term disability.
Stories appearing in mainstream media about $650,000 in medical bills that are arbitrarily not covered by insurance add to this anxiety. It is a real, everyday consideration for patients.
What might have been referred to as pseudoscience a few decades ago now finds strong support in the relationship between neuroscience and the immune system. Indeed, there is a field of medicine devoted to the subject, psychoneuroimmunology (PNI).
PNI has been identified as a significant field for the future of medical research, the treatment of diseases, and our attitude toward handling stress. It studies the vast array of relationships between the human mind, body, and physical and mental well-being beyond anxiety over the ever-present looming risk of unexpected healthcare costs.
That impact is often overlooked or minimized when patients interact with the periphery of the healthcare system, such as dealing with the healthcare bureaucracy, insurance companies, scheduling, and preoperative assessments.
What Are the Costs?
Assessing the financial cost of anxiety over the uncertainty of healthcare costs is difficult. However, costs for anxiety and related mental health issues in general are on the rise among one population that is relatively easy to measure: employees covered by employer-sponsored health plans. This population represents about half of the insured in the U.S., with employers spending more than $1.2 trillion annually to provide insurance coverage to those they employ. According to a 2018 story published by CNBC, “Anxiety is expensive for U.S. employers.”
Quoting data from Aetna Behavioral Health, CNBC enumerates the rising costs of mental health for employers, noting that “annual costs are increasing twice as fast as all other medical expenses in recent years.” Further, according to data compiled by the consulting firm Wills Towers Watson, “People struggling with a wide range of mental health issues submit two to four times as many medical claims.” These increased costs are reflected in real dollars. People suffering from anxiety and depression “submit an average of $14,967 per year in claims, compared with $5,929 a year for the total population.”
In the big picture, employer mental and behavioral health expenses have increased in recent years, more than 10% annually against a 5% increase for other healthcare costs, according to Aetna Behavioral Health.
The costs are real. Some of these costs can be put to HFA.
Concern for Surgeons
For surgeons, there are several implications. First, patients are experiencing more anxiety than ever before; the uncertainty of overpaying for medical procedures adds to underlying tension. Second, the science of psychoneuroimmunology tells us that there is a real relationship between mental and physical well-being. Third, there is a potential cost for physicians in all of this as a patient’s mental health and welfare have implications for surgical outcomes.
There is much to consider here, most of which are outside the purview of this article. What can be implemented are strategies to assist patients in better managing the contingencies of medical procedures.
On the medical side, surgeons have successful, well-established processes and procedures for preparing patients for surgery. On the financial side, not so much.
True, financial considerations are not the first concern of surgeons. However, there is a well-established strategy for managing costs and removing the economic uncertainty of medical procedures. That strategy? Bundled payments for healthcare procedures.
For the patient, there is one price, one payment, and no surprises. Very often the total cost of bundled services is far lower than a list of similar services offered unbundled. Bundling eliminates the unknowns and attendant anxieties. There are no surprise medical bills with bundled healthcare services. The patient knows in advance the cost of the services and the exact amount of whatever out-of-pocket expenses they will incur. As such, the patient goes into surgery without the apprehension of healthcare financial anxiety.
Scott Leggett is co-principal, Global 1. With more than two decades working in orthopedics, Leggett’s experience includes founding a network of independent, physician-owned outpatient surgery centers. In addition, he served as the president and board member of the California Ambulatory Surgery Association (CASA). Find Scott on LinkedIn.
Global 1 | Since 2009, Global 1 provides predetermined, single-payment pricing for an episode of care at its network of more than 135 outpatient surgery centers. The program is designed to provide alignment with the facility, surgeon, and anesthesiologist which leads to a high-quality outcome in a lower-cost setting. Today, more than 800 physicians use Global 1 bundled payments for 70+ surgical procedures including orthopedics, spine, general surgery, women’s health, and ear/nose/throat.