Welcome to the first episode of The Value Shift, a podcast by Protera Health exploring the future of value-based specialty care. In this inaugural conversation, Dr. Eric Makhni and Dr. Melvin Makhni sit down with Dr. Kevin Bozic, Chair of Surgery and Perioperative Care at Dell Medical School, to discuss the evolution of value-based care in orthopedics. From integrated practice units to condition-based payment models, Dr. Bozic shares actionable insights drawn from decades of leadership and innovation. Read the full transcript below or watch the full episode on YouTube.
[00:00:06] Dr. Eric Makhni: If you ask any value-basedcare leader in the field of musculoskeletal medicine or orthopedic surgery, whogot them inspired to go into value-based care? They're gonna say one name andthat is Dr. Kevin Bozic. We are so excited to kick off our Value Shift podcastwith him as our first guest, um, and Fittingly.
[00:00:23] So he's the one whoinspired me back in 2007. To get into value-based care. So, without furtherado, we're gonna get started with the episode. I'm gonna flash on the screensome of his many accolades, um, including being the, uh, former president ofthe American Academy of Orthopedic Surgeons. And, uh, without further ado,let's start learning from his insights about the past, present, and future oforthopedic value-based care.
[00:00:44] So really excited tohave Dr. Kevin Bozic joining us today. Kevin has been my mentor since 2007 andtaught me all my foundations and pretty much everything I know aboutvalue-based care in orthopedics and beyond.
[00:00:56] And so we're reallyexcited to have you, Kevin, and thank you for taking the time to meet with [00:01:00] us and, and share your wisdom and, andexpertise with us as well. So really appreciate you joining us today.
[00:01:06] Dr. Kevin Bozic: I appreciate the opportunity.I'm very proud of all that you've accomplished in your career, Eric, and you'vebeen certainly one of the leaders and strongest voices in this area.
[00:01:15] Dr. Eric Makhni: Very nice for you to say. youknow, and the goal today is we're gonna just talk about some of the topicsabout value-based care, especially as it relates to, you know, what specialistsand orthopedic surgeons can do to advance the topic. And so I'll kick it offwith the first question.
[00:01:31] what is your currentrole and title and your kind of your day-to-day job as it is today?
[00:01:36] Dr. Kevin Bozic: Yeah, so my I have a numberof roles, but my primary professional role is as professor and chair. Surgeryand perioperative care at the Dell Medical School at UT Austin. And and then Ihave roles within our National professional society and other things. But whereI spend my day-to-day time is first of all, and foremost, the thing I enjoy themost is taking care of patients.
[00:01:59] And [00:02:00] I do that. Several days a week. And then Iknow, I am a hundred million dollar a year organization that employs 57physicians and about 200 staff and spans 13 different disciplines, clinicaldisciplines, and 32 distinct clinical programs. Three residency programs, fourdifferent research units. And I would say the part of my job that I spend, thatI the most time on is mentorship and developing leaders. And you know, the,what I just described, 'cause I came here, I was employee number one. There wasnobody else here to get from there to where we are today. I, there's no way Icould do that myself, obviously. Finding, recruiting, retaining, as I mentionedearlier, that I'm proud of. And then mentoring and developing those leaders likeKarl Koenig and others is what I spend the bulk of my time on and helping thembe more effective [00:03:00] leaders. And andthat's what I, that's the part of the job I enjoy the most.
[00:03:04] Dr. Eric Makhni: You know, as you'veprogressed through your career, you've obviously helped shape value-based carein the musculoskeletal space for.
[00:03:11] For a for a lot withbig impact across different initiatives, and, you know, in your opinion, whatreally does orthopedic value-based care entail as it is today? And, and whatdoes that mean to you?
[00:03:23] Dr. Kevin Bozic: So, yeah, it's a goodquestion. I think in order to answer that question, you have to start withdefining the term, and I think the term has been used. In a lot of differentways by a lot of different people. I'm, I'm sort of a purist and I go back to theorigins of the term value-based healthcare, and it came from Porter andElizabeth Teis Bird's Book Redefining Healthcare in 2006, where they laid out aframework for competition based on value delivered to patients where value isdefined as health outcomes achieved per dollar spent to achieve those outcomes.
[00:03:57] As that relates to [00:04:00] musculoskeletal care, it means a focus onthe health outcomes that matter to patients. In our case, pain, functionalstatus, quality of life and what it takes us in terms of resources, peoplecare, delivery, organization to achieve those outcomes. So in order to do that,you have to be able to define. If those outcomes and measure them. If you can'tmeasure the, your improvements in health, you can't measure or improve value.And you have to understand what it what it costs you in terms of resources,people delivery organization to achieve those outcomes.
[00:04:40] Dr. Melvin Makhni: So what role do you thinkorthopedic surgeons play in promoting and advancing value-based care?
[00:04:46] Dr. Kevin Bozic: Yeah, I get asked that a lot.I would say first and foremost, and a realization and an emphasis on what thepurpose of the work that we do is and what are the outcomes that matter. So wespend a lot of time measuring [00:05:00]adverse events and bad things that happen to people. Utilization of imaging,procedures and other things.
[00:05:07] And we lose sight ofthe fact that the reason our industry exists is to improve quality of life andfunction and reduce pain. So probably the first and foremost thing orthopedicsurgeons can do is advocate for measuring the things that matter most. To patientsand whether that mean within their organization, within their payer contractswithin their partnerships, really having a laser focus on understanding,measuring and improving the outcomes that matter to patients.
[00:05:40] I.
[00:05:41] Dr. Eric Makhni: And you know, I've visitedyou all. Recently Recently and saw the clinic that you have at Dell Med. Couldyou give kind of a brief overview of the, i, you know, the integrated practiceunit that you've set up at Dell and how you work with the risk bearingorganization on how you put that all together?
[00:05:57] 'cause I'm sure alot of people may know about it, but, but may not know [00:06:00]some of the overview and details about it.
[00:06:02] Dr. Kevin Bozic: Yeah, so the if, if you lookat sort of the core principles laid out by Porter and Teisberg in their work,one of the things that they talked about in order to create value is we have toorganize care around conditions. Rather than physician specialty. So patientspresent with conditions, in our case, musculoskeletal conditions, and in orderto treat those conditions, it requires a team of people with different skillsets.
[00:06:28] So if we only havea. Orthopedic surgeons or physiatrists or physical therapists focusing in asilo on treating the musculoskeletal health. We're gonna miss out on thatopportunity to compliment each other's skills. And so what we did is we startedby looking at what are the most common disciplines involved in the treatment ofmusculoskeletal care. It was really primary care. Or some version of primarycare, which doesn't even need to be a physician. [00:07:00]Musculoskeletal health experts, in our case, we use physician assistants, nursepractitioners, chiropractors, and physical therapists. They're the front lineof the care. And then we have to have people that understand the behavioralhealth and mental health aspects of musculoskeletal illness and disease andrecovery. And so we have mental health professionals, in our case, we use.Behavioral health trained social workers, but there are other people that areequally skilled in in treating the, and understanding the mental health aspectsof musculoskeletal disease and recovery. Then we have people that are expertsin lifestyle modification, things like weight loss, activity.
[00:07:41] Um, and then we havepeople that do interventions, so whether it be chiropractors, physiatristsrheumatologists or orthopedic surgeons. And all of those people are involved inthe care of musculoskeletal disease. So when you organize care in that way. Notonly do you have a [00:08:00] available at yourfingertips, all the skill sets that you need to optimally manage the condition.It also facilitates better learning because you can, as you, instead of doingthose things in silos, you can actually see a cause and effect by whatintervention that the team provides on the outcome. And it also leads togreater provider and clinician satisfaction because you're focusing on thethings that you're uniquely good at and enjoy.
[00:08:26] And trained to doand not the things that come along with managing musculoskeletal disease thatyou might not be as skilled at.
[00:08:33] Dr. Eric Makhni: If you want to learn moreabout the Dell Medical School's value-based healthcare immersion program thatDr. Boza leads, there's a link to that program below, so I encourage you tocheck it out. Also, if you wanna stay posted with, uh, Protera value-BasedSpecialty Care News podcast and events, please uh, subscribe to our newsletterbelow as well.
[00:08:52] Awesome. And youknow, I'm sure you get this question a lot, but like the genesis of thatclinic, required a lot of participation and coordination with the [00:09:00] risk-bearing entity to the extent that youcan, you know, disclose or share, how did that all kind of come about and cometo fruition and, and what, what is the, like, the patient experience of likegoing through it compared to a typical fee for service when they're pingponging around everywhere.
[00:09:13] Dr. Kevin Bozic: Yeah, it's a great question.We realized early on that if we wanted to organize care around conditions, weneeded to be, we need to have a financial incentive that aligned with that.Otherwise, we would be, I. We would be being paid for things that don't alignwith the way that we're providing care and by and providing care that doesn'talign with the way we're being paid.
[00:09:31] So we establishedwhat we call a condition-based longitudinal payment model with our local countyhealth district, which was our initial, and still one of our largest customers.So these are the most vulnerable patients that have the most complex medicaland social needs. And we decided that rather than. In the fee for service worldwhere we have to go for prior authorization on every individual service that weprovide, whether it be cognitive behavioral [00:10:00]therapy, whether it be physical therapy, whether it be lifestyle modification,orthopedic surgery, injections, imaging that we would bundle all those togetherand actuarily determine what percentage of patients with a musculoskeletaldiagnosis.
[00:10:15] Require thoseservices and then aggregate those in a way that we could be paid for theepisode of care which is managing that condition longitudinally, and thenobviate the need for any type of prior authorization. And then similarly befocused on. Being held accountable for the outcome that matters to patients.
[00:10:34] So it was tied topatient reported outcome measurement. And that, again, has allowed us to befinancially viable and it's also allowed us to focus on what matters to ourpatients and not what matters to health plans.
[00:10:48] Dr. Melvin Makhni: So, these episode basedbundles, these integrated practice units, they all seem so thoughtful and soforward thinking. Why are they not more widespread today? What do you think thebiggest challenge is?
[00:10:58] Dr. Kevin Bozic: Yeah, great question. I thinkin part it's it's a just, we know what we know, so it's a lack of awareness andexperience. You know, that most of us, that. Trained in a musculoskeletalspecialty, whether it be physiatry, rheumatology, physical therapy,chiropractic, podiatry, orthopedic surgery. We were, it's baked into ourtraining that we're trained to practice by by specialty.
[00:11:22] So that's a big partof it is just our, historically, the way care has been designed and the waythat. Clinicians, whether you be physicians or not are trained and raised.Another is the incentives. So again, as I mentioned, if you're, if you areproviding care in a coordinated way to optimize outcomes, I. That I impliesthat you'll actually be doing things that aren't even paid for in a, or coveredin a fee for service world, for instance. Providing cognitive pa behavioraltherapy for someone with chronic knee arthritis is not a covered benefit. Andyou have to be, you have to have a payment model that aligns with thoseincentives and then that just requires a certain amount of inertia to overcomethe existing way that care is delivered and paid for.
[00:12:07] So it, I. And Iwould say, if you were to ask me what's the biggest impediment, it's a lack ofleadership, lack of clinician leadership, lack of health plan, leadership andlack of stakeholder leadership in general. And and really willingness toembrace change.
[00:12:23] Dr. Eric Makhni: And so, you know, you talkabout how we're trained and Mount I as you are, we're all orthopedic surgeons.We're trained to deliver care and and siloed right in our practices. You haveeducated many I. Countless people on value-based care, but did you, how did youkind of even learn about these concepts as you went through?
[00:12:42] Could you walk usthrough, and I'm actually kind of curious about this, like your careerprogression. I know some of the first studies I read about from you that, thatI read were about cost effectiveness research, and obviously that's the tip ofthe spear, but how, how did you even get, you know, learning yourself o on, onthese topics and, and how have you progressed and, and who have you turned to,to kind of, or has it been mostly experience in trial and error?
[00:13:03] Dr. Kevin Bozic: Yeah, no, it's an importantpoint. I was very fortunate in, it was somewhat fortuitous that in my firstyear of of, in my MBA at Harvard Business School, which both of you have donemy required curriculum, I. Professor in the first year for competition andstrategy was Michael Porter.
[00:13:20] So that's where Ifirst started learning the concepts of competition and strategy. And strategybeing defined as the decisions that you make to differentiate yourself. Fromcompetition by increasing value to the customer. And at this point, this was2000. And Michael Porter had not yet gotten interested in healthcare and hadnot yet written his book redefining Healthcare.
[00:13:45] So initially in mycareer, I started thinking about some of the things that I learned in businessschool, which for me was transformative. And I'm sure it was for both of you aswell, but it changed my entire outlook and how I think about. The world, how Ithink about healthcare and how I think about my own career.
[00:14:02] And I startedapplying some of the things that I learned, in that in the, that context. Andit started with yes, looking at things like efficiency, utilization, costeffectiveness. But then when Porter's book came out, I said, wow. This isactually much broader than looking at cost of healthcare.
[00:14:23] And it actuallycompletely flipped my mentality from focusing on the cost of healthcare tofocusing on the outcomes that matter to patients. And so at that point, Istarted, I. Really trying to do my best to promote the use of patient reportedoutcome measures in routine clinical practice. And that was 2007.
[00:14:45] Took us more than adecade to get that. Actually, Eric, you helped us participate in this when wedeveloped an a US work group to to develop a task force to help clinicians.Implement measurement of patient reported outcomes in routine clinicalpractice. And then from there, I ultimately founded the A OS Healthcare SystemsCommittee because I realized there was a lack of, there was a lot of interest,but a lack of expertise in coordination and organization around our effortswithin the musculoskeletal world to create competition based on value so thatcommittee really. That was something I proposed to the a OS Board of Directorsand got funded and then that really became the launching pad to my career andleadership within the a OS. And then in 2014, I stumbled across an opportunityhere in Austin, Texas to join a new medical school that was focused onrevolutionizing the way people get and stay healthy. And that really, gave methe platform to come here and redesign the education system the targets of ourresearch, and most importantly the way we design, deliver, and measure theimpact of of clinical [00:16:00] care. Andthat's led to all of the opportunities I've had since then was based, werebased on coming here to Austin. In the meantime, I did have a lot of.Opportunities and still do to work with large health plans. The Center forMedicare and Medicaid Innovation. Large employer coalitions like the PurchaserBusiness Group on Health, the National Business Group on Health. Other stakeholdersthat are interested in transforming the way we deliver and pay for healthcare.
[00:16:28] And last questionkind of on that teaching front, which is obviously, you know, your expertiseis, is probably second to none in this. And if you, if you wouldn't mind if youcould share a little bit about the immersion program that you have right now atmed school, which I, I. Participated in, but it was during Covid time, so itwas virtual and I did it, but I, I'm sure a lot of people would love to hearabout how they could learn about what you guys are doing at Dell Med and bringthat bo back to their own home institutions.
[00:16:53] Thanks for the plug.We started in 2016 when the Center for Medicare and Medicaid Innovation waslooking at various examples of innovative. Payment and delivery models. Theyheard about our condition-based longitudinal payment plan. And so they sent agroup from Washington from Baltimore and Washington which at the time they didn'thave a travel ban like they do now.
[00:17:17] Dr. Kevin Bozic: And they sent a whole team ofpeople to Austin to investigate what we were doing. And so we spent. Severalmonths organizing all of the different facets from our payment model to ourdelivery model, to our predictive analytics to our, how we assess the impact.And that took months to develop. And then we put on basically a. 24 hourprogram starting at noon on a Thursday till noon on a Friday. And when we gotdone with that we thought, wow, we have so many people that come to us and say,Hey, I wanna learn more about what you're doing in Austin. Can I come visityou? And we'd say, no, that's not a really good way to understand what we'redoing in Austin.
[00:17:57] 'cause it'sincredibly resource intensive on our part. And you're not gonna gain much. Fromwalking around in clinic with me for a day. So we said, what if we on aquarterly or biannual basis, pulled that same team together and brought peoplehere and immersed them in a team and a philosophy that delivers a. That, thatdelivers care based on value delivered to patients. And that led to the title,which is called the Musculoskeletal Healthcare Value-Based the MusculoskeletalInstitute, Value-Based Healthcare Immersion Program, where you immerse yourselfin our team and embed yourself on our team and learn from each member of ourteam, including the clinicians, the contracting people, every and the peoplebehind the scenes in the predictive analytic world our data infrastructure andreally try to do it in an efficient way so that you can spend 24 hours herewith us and learn as much as possible. And it's been incredibly rewarding forus, and we've been doing that for, I think, nine years now. And we've been ableto find like-minded people [00:19:00] all overthe country and in some cases all over the world. We've had people from Europe,from Asia that have come to share ideas. And it's also multidisciplinary innature in that we have health plans that come. We have device andpharmaceutical companies that come because they all bring a unique perspectiveto how we optimize value for patients.
[00:19:20] Dr. Eric Makhni: Awesome.
[00:19:21] Dr. Melvin Makhni: You've led such a kind ofstoried career in orthopedics, you know, and orthopedics and policy andleadership and technical training and everything, and. Now you and Eric haveliterally written the book on, on value-based care and taught myself and mostof the country what we know about orthopedic value-based care. What motivatesyou to keep innovating and leading in this space?
[00:19:41] Dr. Kevin Bozic: Good question. I would sayjust like all of us who are clinicians, it's the impact on our patients and theability to produce results and improve people's quality of life. So I realizedI. Early on, I think Eric asked in one of his first questions and I didn'tanswer, what's the impact on patients, the type of experience that our patientshave and the way that they communicate to us about their experience in being apart of a multidisciplinary team.
[00:20:09] I. That's focused onthe outcomes that matter to them is transformative for our patients. I havepatients that I previously saw in a more traditional environment and I've nowseen in this environment and they share the experience that it's night and dayfor them to the point where many times they're in tears over how different itis and how impactful it is. And at the same time. The part that came to melater in my career was the impact it's had on my team and the retention rateand turnover. So I was recently doing some on data and feedback for my. Annualperformance review with my boss, and I found out that since I've been here inAustin, I've recruited 57 full-time faculty in 10 years, since 2015, and all [00:21:00] 57 faculty are still here.
[00:21:01] Not a single personhas left in 10 years, and that's not because. I'd like to think I'm a greatleader, but it's not because I'm a great leader. It's because they get to wakeup every day and do what they enjoy doing, and they know that ultimately they aredoing what they were trained to do and love doing, which is helping peopleimprove the quality of their life.
[00:21:22] Dr. Melvin Makhni: That's, pretty impressive.57. Outta 57 is no small feat.
[00:21:27] Dr. Kevin Bozic: I almost lost one about twoweeks ago, and I had to counter an offer they had from a competitiveinstitution. And just to be transparent, I ended up offering them less money ina more expensive city. I. And they stayed and I asked them why and they saidthe culture, and that was the reason they stayed.
[00:21:44] So they could haveleft for more money and a lower cost of living at a big well-known institution.But they decided to stay because of the culture.
[00:21:55] Dr. Eric Makhni: We had one kind of finalquestion
[00:21:57] you is, as you, you [00:22:00] know, reflect on your career and whatyou've accomplished what, what would you say you're most proud of and what getsyou excited about the road ahead?
[00:22:10] Dr. Kevin Bozic: I would say I'm most proud ofthe generation of leaders, which includes. Both of you that have come alongbehind me, that have carried the torch, that have taught me things and haveinspired me to continue this work. I think if I had started this work and itwas a dead end and nobody really got behind it, I probably would've pivoted bynow.
[00:22:35] But it's inspiringfor me to wake up. I. Interestingly, every Monday and Wednesday morning at 7:00AM Pacific, I do a mentorship call with someone somewhere around the country.And I have, my assistant knows that I have those slots available. And this morningI spoke to a woman who immigrated here from Africa and is now a medicalstudent. At Northwestern and [00:23:00]interested in a career in orthopedic surgery and was fascinated by the workthat we do and wanted to understand and learn more about value-basedhealthcare. And if I think of, I've been doing those calls every Monday andWednesday. Since probably 2006 or oh seven, probably the first time you and Imet Eric was on one of those calls, I suspect. And if you multiply that by, 45weeks, a year times two, and 20 years, that's a lot of people. And then there'sa lot of other people that you have trained and. PJ has trained and Carl havetrained, and the whole legacy of the a s Healthcare Systems Committee, all ofthese other people that have taken it to a new level, that's probably whatinspires me the most.
[00:23:44] And if I would saywhat I would I. Want as a legacy and what I would like to accomplish withwhatever time is remaining in my career it's really to tackle theimplementation side. We've done so much work on the policy side and we've had,we have [00:24:00] research and we have, lotsof people nod their hey head and say, that's a great idea.
[00:24:03] Like Mel saidearlier, why isn't everybody doing this? There are really, tangible. Challengesand obstacles that have to be overcome to implement. And so I would focus the,the balance of my career on the implementation science side. And that's wherewe need a, an army and a generation of leaders like both of you to help withthat work.
[00:24:22] I.
[00:24:23] Dr. Eric Makhni: Awesome. Well thank you somuch for taking the time and sharing your expertise. Super excited that youguys will join us and we look forward to keep learning from you. Well, that,that wraps it up. I appreciate this.
[00:24:35] Dr. Kevin Bozic: Yeah. Thanks again forincluding me and I really just impressed with the work that you guys are doingand all of your efforts to promote these concepts and principles. So appreciateit. Look forward to seeing you guys soon.
