t’s clear that fee-for-service health care isn't working — so what alternative payment model does? In the July-August issue of Harvard Business Review, Michael Porter and Bob Kaplan argue that bundled payments are the future of “How to Pay for Health Care.” But what does that actually mean for frontline individuals and teams? Accelerate’s Mari Ransco sat down with Ryan VanderWerff, one of the first in our health system to participate in this alternative payment model, to learn firsthand what it actually means to bundle care.

Section #1: Start with "Why"—Vision for Change

[Mari Ransco, Question 1]: To start, can you share how you got into your line of work?

[Ryan:] I wanted to go to med school. I was interested in the sciences but that kind of learning was difficult for me. I always seemed to be behind my peers. And then I tried to get a job at a hospital, Shriners Hospital. And actually it’s interesting — they turned me down. I applied like three times. And I said "Okay, fine, I’ll just work for free." So I volunteered for Shriners.

[Mari asks:] What job did you apply for?

[Ryan:] I applied to work as a HUC (Health Unit Coordinator) on the nursing unit. I just didn’t have any experience. I’m sure there were other candidates who had more experience that they hired. So I worked as a volunteer at the front desk, and then someone left and they offered me the job. I stocked supplies in the OR and the clinic, and then I finally ended up getting a job on the inpatient unit as a HUC. From there, I moved around; I worked in the operating room, doing whatever they needed me to do. Then, later, I got a job working for the Chief of Staff on Special Projects, which led to management. So I was at Shriners for ten years; half was in management and half was doing all kinds of other things.

At Shriners in 2008, when we had the big recession, their $12 million endowment fund was cut in half. Up until that point, they didn’t charge a dime for that service for anybody who walked in those doors—well, for kids, that is. They needed to build a revenue model in order to survive. So we built a revenue system from the ground up and that got me interested in administration. Here we are.

[Mari, Q2]: Thinking about health care in general and personally, how do you want patients to describe the care they receive?

[Ryan:] So, just a personal anecdote. My mother was an orthopedic patient. She was in a car accident when I was in elementary school. Her leg went through the windshield and the car rolled. The windshield cut everything down to the bone and she lost her anterior tendons so she could no longer lift her foot up. They thought they would have to amputate her leg, but they didn’t, so that was a good thing. She’s a very active woman—she was in Sports Illustrated for her softball career and an avid skier, so this was all really hard for her. As she went through the health care system to get that "drop foot" corrected, she had all sorts of problems where the care was disjointed. After seven or eight surgeries, she got a couple of bone infections and almost died.

"I want patients to not have to be an expert in the system."

So, that’s what fuels my personal fire, I guess. I want patients to not have to be an expert in the system. I want them to be able to come in and not have to know somebody to help them figure things out. They ought to be able to come and have the staff take care of everything. We should be able to walk them through it effortlessly, get them what they need, and get them out the door.

[Mari:] I think that often we have these experiences that demonstrate what care should not feel like.

[Ryan:] Yeah, that’s something that’s always in the back of my mind. She almost lost her life because of it, and it was really just due to some minor miscommunications. Here in the Orthopaedic Center, we’re trying to move to a more cohesive unit. And this bundled payment exercise was a great eye opener for that.

How To Bundle Care—What That (Really) Means

[Mari, Q3]: Can you tell us about the alternative payment model—the bundled payment initiative your team participated in?

[Ryan:] The bundled payment model University of Utah Health voluntarily participated in was called Bundled Payment Care Initiative, Model 2 (BPCI-2). Last year, CMS shifted it from voluntary to mandatory participation and expanded the initiative, which is now called Comprehensive Care for Joint Replacement (CJR). The expansion includes hip and knee replacements, as well as many major joint replacements below the lower limb, so it actually includes our total ankles, hip fractures and so on.

[Mari, Q4]: What felt different about the bundle?

[Ryan:] I think I can speak for the team when I say that the level at which the physicians and staff care didn’t change through all this. We all cared the same amount before and after. Our physicians work day and night—and they stress. They are hard on themselves and hard on the staff to make sure the patients get the surgery done right, recover, and have a great outcome.

"The bundled payment requires you to look at the entire spectrum of care—not just what happens within your own walls."

The level of dedication to that ideal did not change through the process. What did change was when we started to look at the cost data. The bundled payment requires you to look at the entire spectrum of care—not just what happens within your own walls. So we had to look at the entire spectrum, and ironically, our greatest opportunity for not only cost savings but getting our outcomes and quality at a higher level was the activities that took place outside of our walls.

[Mari, Q5]: When looking at the spectrum of care, in terms of processes, what was new to the providers that wasn’t on their radar before?

[Ryan:] One example of that was when we started to look at the post-operative/post-acute care period and we saw how much it cost to send a patient to a skilled nursing facility (SNF, pronounced “sniff”). Before that, we were definitely aware that there were some SNFs that were not good and some that were, and they were already working on that. We had a preference list and we were guiding patients to those facilities. But ultimately, the law mandates—and we supported—that it’s their [the patient’s] choice to go wherever they want. What surprised us was when we saw how much those cost. And then when we mapped the cost of those post-acute care facilities to the outcomes, it opened our eyes. A lot of money was being spent that really wasn’t yielding any greater value.

[Mari, Q6]: How did your definition of quality change?

[Ryan:] It’s hard because—well, they have the Medicare quality ratings—defining quality in health care is tough. Defining quality for a SNF is equally tough. We based our judgement on their infection rates, their readmission rates, and their overall outcome—functional outcomes. It was clear when we looked at the data that a lot of patients who received home health, that went right home, had better outcomes. Now, the data is weighted, because usually sicker patients go to a SNF than go home, so there is that bias there. But still, when you tease it out, patients were having better outcomes going home for less money. It wasn’t just us that saw this. All of our colleagues across the country were seeing this. Everyone was talking about it.

“The system before was, 'hey, call us if you have a problem.' The system after is, “'we’re going to know if you have a problem before you even call us.'”

So we used that data to change the way we deliver care. When we send a patient home, they have to have a plan. We have to have every “i" dotted and every “t” crossed to make sure that they’re being taken care of every step of the way. We needed to implement a new system that would watch over them—a system that would give us daily feedback about how they’re doing so that we can stay ahead of the curve. I think the easiest way to put this is, the system before was, “Hey, call us if you have a problem.” The system after is, “We’re going to know if you have a problem before you even call us.”

[Mari, Q7]: One of the bundle payment goals is “better integrated multidisciplinary care for patients.”

[Ryan:] This is pretty ironic, but even some groups within our own department were new to us. It’s important to identify that we had three phases to this. About three years ago [2013], we did the VDO (Value Driven Outcomes) care pathway, where we streamlined, cut out variation, and became more Lean with our processes within our own walls. That was a nice predecessor to this. We probably couldn’t have done the BPCI without that. Then, the BPCI with step two was, okay, now we’ve got to streamline things that are going on outside of our walls.

Within both of those processes, we worked with new groups. In the first process, we wondered why length of stay was so erratic? As we looked at the data, we discovered that there was actually a scheduling issue with PT (physical therapy)—they go home at 3:30 PM or aren’t available on Friday afternoons—so we worked with PT’s Chris Noren to make an easy fix. It also enhanced our relationship with the Thrombosis Service, so we became more efficient. In the BPCI-2, we really had to start working closely with case management. We always kind of worked with Case Management, but now it was on a much deeper level. We worked with Anne Michelle to get someone in our clinic that’s planning everything before they hit the nursing floor, versus before, where they’d get the plan in place while on the nursing floor. Granted, the plans might change a bit, but we had the family and everyone on the same page, knowing exactly what’s going to happen to that patient after they leave—long before they’re admitted. We had to work more closely with SNFs and home health agencies. Eventually, we’d like them to have a financial stake in this game.

[Mari, Q8]: Can you give me an example of what the care felt like before the change?

[Ryan:] Sure. Our residents take call on the weekends and after hours, and what we discovered was that patients would call them and have a concern, and then the residents, who aren’t necessarily experts within the joint service, would not feel comfortable answering questions or making commitments over the phone. So they would want the patients to come in and be assessed. That was driving up costs. As a great example, when my wife had her knee replaced, I came home one day and my mother-in-law was concerned because her incision was really hot. I called the resident on call—I know him, he’s a great guy—and he said, “I think it’s fine, but bring her in—it’s always better to be safe than sorry.” I totally respect that, but what we found was that we have joint experts that can answer those questions over the phone and be confident in the kind of recommendations they’re giving. We decided to invest in putting our PA-Cs and fellows on call so there was someone available 24/7 to talk to these patients. It reduced our ED rates. I think we invested $26,0000 thousand in the call pool and we’ve yielded somewhere around $70,000 thousand in savings through avoidance of ED visits.

[Mari, Q9]: What impact do you think that has for patients?

[Ryan:] Oh my gosh, the patients love it! Because they're talking to a member of our team. They may not know them; it may be a member they haven’t met in person. But they know it’s a person that’s part of the joint team. It’s not someone who’s disjointed from the team—no pun intended. That’s the feedback we’ve received from patients. Actually, there are a lot of comments through our care navigation system and through Press Ganey—just anecdotes that we get that they like the improvement. They like being able to get a hold of someone.

[Mari, Q10]: How did your team come together around what the outcomes would be?

[Ryan:] When it came to the bundled payment effort, because we had already been prepped and we had already been conditioned from the VDO exercise, it was pretty organic. To compare, we’re [currently] trying to do the same thing on another orthopaedic service, even though there’s not another bundled payment at stake. And it’s been really hard, partly because joint is a very specific area of orthopaedics and this other service has a lot more areas of variation. But really, because the joint team went through this exercise of VDO—plotting out how we measure outcomes, getting a report every month, reacting to it, and adhering to it—it was a nice organic shift in the BPCI. Monitoring quality is tough, but we do the classic measures: readmission rate and ED rates, in addition to other things like early mobility and joint surgery. [Patients] need to get up and start moving. You want to put weight on it and it’s a little counterintuitive and we’re trying to measure that on the inpatient unit to make sure they’re getting up and moving around.

[Mari, Q11]: How did the physicians respond?

[Ryan:] It takes a lot of deliberation, certainly. I have to give a lot of credit to Dr. Pelt, Dr. Peters, and Dr. Gililland, because they’ve been willing to come together as a group and agree on a care pathway. There is always going to be variation based on the needs of the patient, but by and large they’ve agreed on a general care pathway. And that demanded huge leadership from Dr. Peters and Dr. Pelt. Dr. Gililland came in once we’d gone through the VDO exercise, but once we got into the bundled payment initiative, he was just as supportive. It took the physician leadership—I have to credit them for making that change. They had to agree to it. They had to come in and acknowledge that we’re going to define “the best way”—it may not be my way, but I’m going to compromise. When I say compromise, I’m not speaking in terms of quality, rather in terms of preferences. But the physicians did it.

[Mari, Q12]: What advice would you give other administrators?

[Ryan:] That’s tough. Be patient and leverage the data. You have to speak to the data. You have to understand it. It’s really frustrating to the physicians if the administrative leaders don’t fully understand it. It’s okay to make mistakes, but you’ve got to become an expert in how that data’s formulated, what triggers that data to change. What are the inputs? What are the outputs? If you can be an expert in those areas, it helps the physicians understand the measurements. It helps them to understand what changes to make.

[Mari, Q13]: What data was the most important for you to be an expert in?

[Ryan:] As you get into bundled payments, you’re going to start looking atnot only VDO data but also payer data, which is different. Payer data is what insurance companies are spending on these procedures. You have to be able to map that. Luckily, there’s a lot of resources available from Value Engineering and Decision Support. These guys are geniuses. When you work with the Steve Johnsons of the world, they can point you in the right direction. But you have to learn. When I see a readmission rate spike, how can I go in and find out what happened? You don’t have to be the one that knows—you just have to find the right person. We have some PA-C experts that are really, really good. I can go to them and say, “Help me think through this.” You have to be able to speak to it. You have to help the physicians be able to understand. And they’re going to get frustrated. My personal approach to that, whether it’s this or Press Ganey, is to say, “Listen, I know this is tough, but I’m just here to help you. I hate that you’re frustrated. I’m sorry you’re frustrated. But I’m just here to help you work through it.” You have to be their support. Other people are pushing them, like their Chairs and Chiefs. Administrators should support them—be a part of their team.

[Mari, Q14]: What advice would you give to physicians about what it’s like to enter into a different costing method?

[Ryan:] Physicians and clinicians, even my joint nurses, are huge patient advocates. They are so worried that we’re going to comprise something. I would say that it’s not going to be perfect. It just isn’t. At least initially. You can refine everything. Jill Erickson, one of our senior joint PA-Cs, still to this day, is constantly refining it. So I would just say that it doesn’t have to be perfect when you jump in. I know that sounds cavalier. It’s hard. You think to yourself, “We’re at huge financial risk. We could lose hundreds of thousands of dollars.” But once you have a base built, once you’ve done as much as you can to build a platform, you just continue to refine. When we started we were so nervous. In fact, we were so nervous we pushed back the start date to the bundled payment because we thought we’re just not ready. And then finally our chairman said,“Ready or not, we’re starting.” You learn as you go. It’s very hard to learn until you actually start doing it. We’ve learned more after we started then when we were preparing for it.

Section 3: Voice of the Patient—Spoiler Alert: You Will Not Be Successful Without It

[Mari, Q15]: Can you speak to the role of the patient in all of this?

[Ryan:] We had a project administrator who was solely focused on what patients thought. She played such a crucial role in this. We didn’t intentionally create that role; she was driven by it. Any time we would make decisions or asses something, I always gave the operational perspective while the doctors would give the clinical. But we had that one person who always pointed back to the patient. Her name is Dory Trimble. Dory went into the clinic and interviewed hundreds of patients, telling them what we’re trying to do and getting their direct feedback. We had so much feedback from patients. In our VDO exercise, we didn’t do that, but in the BPCI-2 we did, and it had a lot of influence on the direction we went. That is so important. I would say that you can’t do it without patient input.

In order to get ready for BPCI, we had to provide some educational platform on what the patient was going to go through when getting a knee or hip replacement. We were very proud of ourselves that we developed this “Joint Camp.” Patients would come to the UOC (University Orthopaedic Center) and we’d have people teach them everything they need with their caregiver/caretaker. We thought we were pretty cool for doing that. We thought we were ahead of the game. And what Dory discovered was that it wasn’t as effective as we thought it was. Patients need more media to learn from than just coming to a joint camp. What she found was that patients are so nervous because they’re about to have surgery in a week that they were too distracted to take much away from it. The caregivers would write notes, but it wasn’t very comprehensive. From that, we produced videos available online. We produced a robust educational packet that’s really nice. Then we gave them a copy of the videos on a thumb drive so that they could go back at any time and look at them. That’s just one example.

[Mari, Q16]: You had a lot of resources and support (VDO, Value Engineering) throughout this process. What advice would you give to someone without that—someone starting from scratch?

[Ryan:] You have to be able to map your process. If you’re going to do a care pathway, you have to map out every step from the time the patient makes initial contact—the call center or the referral. Then you have to figure out how to measure those processes. If you’re here, you can to go Value Engineering for help. What information can you pull from Epic (electronic medical record) and the Data Warehouse to measure each one of those processes? How do you know when you’re successful in each one of those steps? Then you need a dashboard or some way to visualize how your system is working. Once you get into the bundle, once you start mapping financial stakes, it starts to shift to how you measure performance within each one of those steps. But you have to be able to visualize it—otherwise you’re just throwing a dart with a blindfold and hoping it sticks.

[Mari, Q17:] It would be really easy when starting the bundle process to try and make patients “do what you want them to,” or follow whatever process works best for the team. Can you speak to the importance of the voice of the customer—the patient—in the reality of that?

[Ryan:] At the beginning, when we started to understand and learn about the risks involved in bundling—about what would be at stake financially—our initial reaction was to try and control the process. We decided that we were going to develop a care pathway that patients should strictly follow. We weren’t alone in this thinking; we had colleagues in other orthopedic departments nationally that had done that. One in particular had their patients sign a contract that stipulated, “We’re going to do steps A through Z, and you must agree to follow this, and we are only going to engage in a surgical relationship with you if you agree to these terms.”

[Mari:] "That sounds awful!"

[Ryan:] I know, I know! These guys had been doing it for a long time and they were doing it really well, so we just thought, “Yeah, we can’t be risky, we’ve got to do this.” Immediately, our nurses told us we had lost our minds. Dory, our project administrator, who had really been advocating for the patients, questioned that as well. We got distracted by the risks we were going to have to assume.

[Mari, Q18]: So what are the right incentives for patients to get them to follow “your” care pathway?

[Ryan:] Patients need an incentive to adhere to our protocols and be compliant with what we need them to do. It always came back to the educational piece. Dory, Jill, Heather, and Carey all had that at the forefront of their minds. They reminded us that we need to teach them. We have to help them understand why it’s important, what the goal is, and why we need them to do certain things. We found that, with skilled nursing facilities (SNF) especially, convincing people that they didn’t need that specialized care—that they could just go home—was stressful. For them, the idea of going to a SNF is kind of a relief—a nice security blanket. Someone else will take care of my husband while he’s getting his hip replaced, and I’ll come visit. For us, that created a lot of anxiety. How do we convince those people to go home? It required us to invest in a tremendous education effort. We had to communicate how important it is to keep them out of hospitals and skilled nursing facilities because of the risk of infection—we don’t want you to get sick. We had to heavily invest in teaching these patients.

[Mari, Q19]: You mentioned that you didn’t utilize the patient voice in the VDO initiative earlier. Why is that?

[Ryan:] VDO, at the time, was really focused on our internal processes. These were all focused on processes that the patient didn’t have much decision making in. For example, whether or not we staff a physical therapist from 8:00 - 9:00 or 8:00 - 3:00. From a patient standpoint, they think, “Well, PT’s gone home, I’ll just get it tomorrow.” They don’t know to ask for that change because they don’t know how it works. Whereas in BPCI, in the next stage, we were starting to form a system that impacted decisions patients could typically make on their own. Suddenly, we had to influence how they made those decisions. That was new and kind of scary. We didn’t want to lose them to TOSH, or we didn’t want to make them feel like we weren’t letting them participate in their care. Again, the nurses were very sensitive to this. They were really helpful in making sure we took the right approach.

[Mari, Q20]: Through this process of bundling, patients were brought into a new relationship with you. Were there any particular people on the team that were really great advocates for you in communicating with patients?

[Ryan:] Our frontline staff. Our nurses, medical assistants, and case managers—those that do this day-in and day-out. It was a very classic administration and physicians coming in and telling them, “Now this is what we’re going to do.” And they stepped right up to say, “No, you have it all wrong.” Again, I have to credit our great relationship—we have such a good relationship—with our frontline staff. Our nurses know they can speak their minds. That’s what I value about our culture here. They can even speak their minds to the physicians. The medical assistants and nurses have no problems telling us where the flaws are in our thinking and our approach.

Section 4: Invest in Your Team: Listening and Storytelling

[Mari, Q21]: What do you think was the most important question that you asked frontline staff?

[Ryan:] Well, when we would present these ideas, we didn’t even get a chance to ask questions. Their hands were immediately up. They would tell us, “You think you know how it happens, but it doesn’t happen like this—it happens like that.” As we started to look at the data, they also shed a lot of light on that. But as far as important questions, as we developed this system, they were right there with us on the frontlines as we developed this. We didn’t ever build a system first and then ask—they were part of the build throughout the entire process. Not in every single meeting, but operational decisions were not made without them.

They would come to my office with a lot of questions. There was a lot of one-on-one coaching, because they didn’t understand the big picture. Nor should they—they’re on the frontlines. Helping them understand the big picture required a lot of heart-to-hearts. Helping them understand that we’re not trying to cut corners. If we cut corners and the patient winds up getting readmitted because we were trying to be cheap on something, we’re shooting ourselves in the foot. The frontline staff are going to have a hard time understanding the big picture. At least ours did. And it requires a lot of investment in one-on-one chats and teaching them. They don’t understand the operational jargon. Finding ways to tell stories about how this is supposed to play out—there’s a big investment from administration with the frontline staff that needs to happen.

[Mari, Q22]: How much time do you think you spent in these discussions?

[Ryan:] Oh my gosh, we’d spend hours. Two-hour conversations. For me, I hate the meetings where you don’t do anything. But you have to invest in the discussions. In the context. Here’s the big picture. You can explain it using these keywords: we’re trying to create alignment, we’re trying to be more efficient, we’re trying to scale and create value. A lot of that stuff requires a lot of repetition and explanation. We want to send patients home, yes—to save money, we can’t deny that. But there’s also an outcome feature to that.

Sometimes we just had to ask them to have faith in us and try a change—just for a little bit. We’re going to watch our outcomes and if they're not good, we’re not going to keep doing the same thing. So there was a brief period where they just had to trust us. As we started to look at the outcomes data in terms of readmissions and ED visits—and as we watched those numbers drop—then they bought into it.

It’s worth investing in those conversations because they’ve got to be on board. And I will say, I didn’t mention this, but having everybody on the same page is crucial. People in the clinic, people over on the OTSS (Orthopaedic Trauma and Specialty Services Unit), people in case management, we’ve all got to be saying the same thing. Otherwise it drives patients crazy. In order to get them to do that, they have to buy into it.

[Mari, Q23]: Thinking of post-acute care, how did it feel to have to be responsible for something that you’re not in charge of?

[Ryan:] It totally changed our approach. You nailed it perfectly. The old approach was, “Call us if there’s a problem.” Once we discharge you, it’s up to you to let us know when there’s an issue. And then we had to totally make a shift to where we have to be in contact with them frequently to see how they're doing. We had to develop a big piece of infrastructure—building a system whereby we reach out to the patient to say, “Hey, how are you doing?” In order to be efficient with our resources, we used some risk models and risk assessment. So, for instance, we would say for this patient, we’ll reach out to them three or four times in the first week postop. Then we’ll taper it down to once a week, then maybe once every other week. But we’re calling them to say, “How are you doing?” And we’re documenting it in a discrete way, so that we can pull the data back, again so that we can visualize our operation to run reports to see how our patients are doing overall. That was a kind of shift in thinking. Originally we asked, “Well, how are we going to do this?” But there are ways to do it. It’s a telephone. I’m sure technology will help us in the future. Currently, Dory’s working on a project whereby there will be automated text messages that go out and patients can respond to those messages so we can see how they’re doing. Again, it’s shifting that way of thinking to, “Yep, we’re going to keep in contact with them until we know they’re in the clear.” So that’s what we do. Most of our joint patients get phone calls 24-48 hours after discharge and then 72-96 hours after discharge—then another call the following week. The idea is that if we call them and get information that’s alarming, we can say, “Hey, come into the clinic and we’ll see you” so they’re not showing up in the ED with concerns.

[Mari, Q24]: Do you think they feel that this moves us toward a more perfect delivery of health care?

"This whole exercise was totally exhausting—not just the work but the mental and social work with the patients."

[Ryan:] Yes, I’d say they do. I think they do. It would be interesting to have you ask them directly. But I think if you talk to our joint team, this whole exercise was totally exhausting—not just the work but the mental and social work with the patients. Someone who came in for their left knee last year and now comes in this year for their right and it’s different? Coping with change isn't easy. And the new processes have to work. We had to now start training our joint staff to make all these phone calls, which is just more work. But what does it for them—and it’s really cool actually—is when we share the outcomes data with them and get comments from patients saying things like, “This is the most amazing system…” And we do get comments like that all the time. But you don’t get that until you’ve implemented the system. From administration, it takes a lot of cheerleading and coaching to say, “I know this sucks, I know this is tough, but we’re going to make it.” Again, it kind of goes back to that investment. I’ve had staff come into my office and say, “Ryan, I don’t understand this.” Or “Ryan, I’m exhausted.” You have to invest the time in reenergizing them and reaffirming that we’re on the right track. We’re doing this for the right reasons.

[Mari, Q25]: As I’ve listened to you, I think all of this is with the right intention. But it doesn’t always feel like that to the people delivering care.

[Ryan:] Some of them can make it feel like we’re just trying to save money or cut corners. What was really hard to teach was alignment. At the end of the day, staff would feel like we’re doing this for the money, but then they’d see the results. Is money really forcing all this? Stories, too. Share stories and anecdotes for those that are having a hard time. Talk to them. Help them understand. This is a huge change in what we traditionally do.

[Mari, Q26]: How do you keep people engaged in this really hard work?

[Ryan:] The value equation is a great way to keep it in perspective, because it’s not just the money. It’s not just the dollars and savings. It’s related to the patient experience and the outcome. Those go hand in hand. Even though the financial alignment is a big piece of bundled care, it means nothing unless you have increased patient satisfaction or a better outcome. And that’s exactly what we got. We yielded tremendous cost savings along with better outcomes. Our readmission rates dropped. And once the staff saw that, everyone was totally on board. It’s not even a question.