Orthopedic care is among the most prevalent, most expensive, and fastest-growing categories in US healthcare. More than one-third of Americans received orthopedic care in 2021, making it the largest expenditure category for beneficiaries of employer-based insurance and the second-largest for Medicare. We estimate that the annual direct cost of healthcare for orthopedic conditions totals $350 billion to $400 billion, or roughly 10 percent of total US healthcare spending. And it is on track to grow rapidly in the coming years as the US population ages.
Despite how prevalent orthopedic care is, treatment patterns vary substantially and do not always align with known best practices. For example, prior McKinsey research found that roughly half of patients receiving surgery for lower-back pain did so within three months of diagnosis, while evidence-based guidelines recommend surgery within this time frame only in emergency circumstances. This variability can have a meaningful effect on patients because care that deviates from evidence-based clinical guidelines can expose patients to the risk of medical complications and increased out-of-pocket costs.
The challenge of providing high-quality and consistent care is not unique to orthopedic care. In recent years, patient-centric pathways, often called “care pathways,” have gained momentum as an approach for promoting patient access to high-quality, evidence-based medicine. But challenges to implementing this approach still exist.
In this article, we analyze orthopedic patient-centric pathways and consider moves that could increase cooperation among payers and care teams to promote evidence-based care and therefore improve outcomes and affordability for patients.
What are orthopedic patient-centric pathways?
We define patient-centric pathways as care journeys that take patient experience into account—such as offering patients the opportunity to receive postacute rehabilitative care at home instead of in a nursing facility, when clinically appropriate—and prevent avoidable, adverse health outcomes, such as hospital readmissions (see sidebar, “The rise of patient-centric pathways”). These pathways also align with relevant clinical literature. For example, evidence-based medical guidelines for orthopedic conditions often recommend deploying conservative first-line treatments (such as physical therapy) before more invasive interventions (such as back surgery or hip replacement).
The following is a potential patient-centric pathway for someone with nontraumatic knee pain due to osteoarthritis (OA):
Initial presentation. A patient with knee pain could seek initial care from a range of sources, including a primary-care physician (PCP), an orthopedic specialist, or an emergency room or urgent-care setting. In many cases, clinical organizations often suggest that patients seek initial consultation from a PCP or a nonsurgical orthopedic specialist, with the goal of treating symptoms via nonsurgical interventions—such as lifestyle changes and physical therapy—when appropriate.
Diagnosis. Except in certain scenarios (for example, when there’s evidence of active inflammation), OA can typically be diagnosed through a physical examination and X-rays. In most cases, clinical guidelines do not recommend use of additional imaging, such as computerized tomography or magnetic resonance imaging, for initial diagnosis.
Initial treatment. In most cases, guidelines suggest conservative first-line treatment, such as physical therapy and the use of nonsteroidal anti-inflammatory drugs (NSAIDs) such as aspirin and ibuprofen.
Surgical referral. If first-line treatment fails to effectively control symptoms, clinical guidelines support using additional interventions (such as intra-articular glucocorticoid injections) to manage short-term pain. At this point in the care pathway, guidelines also support referral to an orthopedic surgeon for consideration of surgical intervention.
Surgery. If the above steps are not effective at controlling symptoms, guidelines support more invasive interventions, such as knee replacement surgery. When scheduling surgery, it’s important for payers and care delivery organizations to consider site of care, such as whether a procedure should be performed in a hospital-based or ambulatory setting. Research indicates that, when clinically appropriate, surgeries performed in alternative settings (such as outpatient settings) are associated with a range of patient benefits, including fewer clinical complications.
Rehabilitation. In many cases, patients can receive physical therapy in their homes or in a physical therapist’s office instead of having to stay in a facility long term. Doing so can support convenience as well as patient experience and affordability.
In this context, by analyzing longitudinal patient journeys via claims, it is possible to identify care interactions that may not have followed ideal, patient-centric pathways, such as when a patient received surgery before more conservative treatment options.
What we discovered about orthopedic patient-centric pathways
We used 2019–21 claims data to measure orthopedic care journeys that stretch across calendar years. For example, a patient may have been diagnosed with knee pain in year one, tried physical therapy in year two, and ultimately scheduled surgery in year three.
Substantially more healthcare organizations have been adhering to patient-centric pathways in recent years. But opportunities for improvement remain.
Our research indicates that substantially more healthcare organizations have been adhering to patient-centric pathways in recent years. However, opportunities for improvement remain. Consider a few important junctures along the orthopedic patient journey that can affect outcomes:
Initial consultation. In 2021, roughly 85 percent of patients sought initial consultation for osteoarthritis from an orthopedic specialist, with about 15 percent seeking initial consultation with a PCP. There appears to be a correlation between this initial consultation and subsequent rates of surgical interventions: 5 percent of patients seeking initial consultation from their PCP went on to receive surgery, compared with 10 percent of patients who initially saw an orthopedic specialist. Rates of PCP consultation declined slightly from 2019 to 2021, perhaps because of deferred or interrupted care related to the COVID-19 pandemic.
Access to conservative treatment options. Access to conservative treatment options increased steadily from 2019 to 2021; for example, the proportion of patients who received physical therapy in the six months before surgery rose from 51 percent in 2019 to 61 percent in 2021. But this means that as many as four in ten patients who underwent surgery did not receive first-line physical therapy.
Surgery location. We have seen a substantial shift in the site of care for procedures such as hip and knee replacement. For example, as recently as 2018, 75 percent of knee replacement surgeries and 83 percent of hip replacement surgeries took place in hospital inpatient settings. By 2021, this had dropped to roughly 10 percent, with about 70 percent of both procedures occurring instead in hospital outpatient settings (Exhibits 1 and 2). Removal of these procedures (in 2018 and 2019, respectively) from the Centers for Medicare & Medicaid Services Inpatient Only (CMS IP Only) list prompted a steady transition to alternate sites of care, which accelerated rapidly during the pandemic.
Discharge planning. Last, we find continued growth in access to home-based post-acute care (PAC). For example, the rate of home-based PAC for Medicare patients recovering from hip or knee replacements increased from about 73 percent in 2019 to about 80 percent in 2021, perhaps due in part to considerations related to COVID-19. However, meaningful variation exists in discharge pathways by acute-care facility (Exhibit 3), indicating the potential to continue to increase access to home-based rehabilitative care in the future.
Considerations for improving orthopedic care
In many ways, these findings suggest the US healthcare system has made substantial progress in improving orthopedic patient-centric pathways. In recent years, patients’ access to lower-acuity surgical settings has increased dramatically, and
at-home rehabilitation has become a viable alternative to facility-based care for more patients than ever. In pursuing these shifts, payers, care delivery organizations, and government agencies (such as CMS) have contributed to improved affordability, care quality, and patient experience.
At the same time, substantial opportunity for improvement remains. Our analysis suggests that a substantial portion of Americans continue to undergo surgery without first trying conservative treatment options, such as physical therapy. For patients with nontraumatic joint pain, increasing access to conservative, first-line treatment options that could prevent or delay the need for surgery likely represents the next opportunity for continued improvement in orthopedic care in the United States. In addition, many patients seek initial consultation from orthopedic specialists, and a correlation appears to exist between this initial specialist consultation and a higher rate of surgical intervention. Increasing coordination between specialists and PCPs may therefore help educate patients and increase access to first-line treatment options, when appropriate.
As healthcare organizations continue to work to improve orthopedic care, they could consider viewing the entire patient journey, as opposed to individual touchpoints, and how payers and care teams could better collaborate across this journey. The following are a few examples:
Population health and patient engagement. Care delivery organizations and payers have an opportunity to collaborate to increase patient access to conservative, first-line treatment such as physical therapy. For example, consider a patient with OA who has not visited a PCP or accessed physical therapy in the past six to 12 months. The patient’s health plan could reach out to the patient to help schedule a PCP or physical-therapy appointment. It could also alert the patient’s PCP office, which could contact the patient as well. Similarly, payers that offer members access to noninvasive digital health solutions could coordinate with PCPs and orthopedic specialists to promote awareness and adoption of these services. The goal in these cases would be to ensure that every patient has the option of accessing a variety of conservative, first-line treatments when appropriate.
Specialty value-based-care models. Value-based-care (VBC) models can help align the incentives of payers and care delivery organizations for certain patient-centric pathways and can help promote evidence-based care as a result. Many orthopedic VBC models today focus on surgical episodes of care, such as hip or knee replacement. Over the past five years, surgical episodes were mainly designed to align incentives of payers and care delivery organizations to promote patient access to alternative, lower-acuity sites of care for surgery and postsurgical rehabilitation. Going forward, orthopedic VBC models could also promote access to conservative treatment options. Orthopedic VBC bundle design based on diagnosis (such as osteoarthritis) instead of procedure (such as hip or knee replacement surgery) may therefore have the greatest opportunity to drive continued impact going forward. For the same reason, some risk-bearing care delivery organizations view population-level, capitated payments as the ideal orthopedic VBC model because this approach creates incentives to influence lifestyle factors even before patients receive a formal diagnosis, preventing or delaying the emergence of orthopedic pain.
Benefit design. Payers may wish to review benefit design to ensure that out-of-pocket expenses, including co-pays and deductibles, do not create unintended barriers between patients and first-line treatment options. For example, payers could waive out-of-pocket costs for first-line physical-therapy visits for members diagnosed with OA.
While payers and care delivery organizations are committed to improving care outcomes, they often think in terms of surgical episodes when it comes to orthopedic care. As we’ve shown, they could likely add value for all involved by looking further upstream and considering the whole patient journey.
And this doesn’t apply only to orthopedic care; similar patient-centric pathway analysis would likely generate actionable insights across a range of other care categories, from oncology and cardiology to maternity care and nephrology. Through this framework, healthcare organizations have an opportunity to develop an understanding of current performance and identify opportunities to continue to improve access to high-quality, evidence-based care for all patients.