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Believe me, filling in for the uncontested master of podcasts, Stacey Richter, is just a tad unnerving!

My name is Dr. Steve Schutzer. I\u2019m an orthopedic surgeon specializing in joint replacement surgery, and I think it\u2019s fair to say that I\u2019m more comfortable, in my own lane, doing complex surgery than doing this introduction to our encore podcast 294 entitled \u201cBuilding a Center of Excellence: A Playbook for Physician Entrepreneurs,\u201d which aired originally in October 2020.

But when Stacey graciously offered me the honor of doing so, I said to myself (sic: Steve, suck it up) what an opportunity to share with the devoted listeners of this show my humble perspectives on the prominent position COEs (also known as Centers of Excellence) are playing in this rapidly accelerating, evolving, and exciting healthcare landscape.

So, there\u2019s an ancient Chinese proverb that goes like this: \u201cWhen the wind of change blows, some build walls, and others build windmills\u201d\u2014or in this case, Centers of Excellence!

And the winds of change in healthcare are blowing, maybe even reaching gale force.

In the year since episode 294 aired, there\u2019s been unambiguous upsurge of activity, in part fueled by the pandemic, that has collectively and finally moved the healthcare value agenda across the chasm, over the inflection point\u2014and there\u2019s no turning back. Unaccountable fee for service as the predominant payment model for healthcare services is, well, shall we say, on its last legs\u2014being replaced by reimbursement models that are aligned with the clinical and financial outcome of the services actually delivered to our patients. For COEs, that\u2019s characteristically in the form of predictable bundled payments and fully warrantied episodes of care.

Question: Where do COEs fit in this new landscape?

Answer: COEs are the common pathway for all healthcare purchasers (whether they\u2019re self-funded employers, advanced primary care groups, Medicare Advantage\u2014all of them) to steer agnostically to high-quality specialists focused on a defined set of healthcare services and who are willing to assume total cost of care for their product.

And the favorable impact of COEs on the ROI for purchasers has now moved beyond the realm of theory to indisputable.

Take, for example, the recent report by the RAND Corporation published earlier this year in Health Affairs: A study of over 2300 patients who had either total joint, spine, or bariatric surgery done under the Carrum Health program at one of their COEs. Carrum Health is a value-based national COE platform that connects self-insured employers with top providers under standardized bundled payment arrangements. And now in full disclosure, I serve as medical advisor for the company; and our program, the Connecticut Joint Replacement Institute in Hartford, Connecticut, is actually a Carrum COE. But in this independent RAND analysis of two years of medical claims data, the savings per procedure when the surgery was done at a Carrum COE was over $16,000 per procedure. Readmission rates were reduced 80% on average. Out-of-pocket cost to the patient? Zero. And an astonishing 30% of patients who were in the queue awaiting surgery ultimately were treated nonoperatively!

Peter Hayes is president and CEO of the Healthcare Purchaser Alliance of Maine and a frequent guest on this podcast. His organization has been under contract with Carrum for approximately two years and recently reported an ROI of 58% and plan savings approaching $1 million.

And these data also closely reflect that reported in the Harvard Business Review two years ago by Ruth Coleman and colleagues from their experience with Walmart COEs.

Finally, you know, I heard Stacey say of COEs in one of her podcasts, \u201cThis is not something you can do on a Tuesday.\u201d Agree. Prescient advice. As you will hear once again in just a moment, this takes work. But physician leaders and entrepreneurs, take heed. Although you won\u2019t be able to stand this up on a Tuesday, there\u2019s no reason why you can\u2019t begin next Monday.

Steven F. Schutzer, MD, graduated with honors from Union College and the University of Virginia School of Medicine. Following a surgical internship at the University of Rochester, he served as lieutenant in the Medical Corps of the United States Navy. After his tour of duty, Dr. Schutzer did his general surgical training at the University of Rochester and then completed his orthopedic residency at the University of Connecticut. He was then a fellow in adult hip and reconstructive surgery at the Massachusetts General Hospital, after which he entered practice in Hartford, Connecticut.

Dr. Schutzer is a founding member and medical director of the Connecticut Joint Replacement Institute (CJRI), a Center of Excellence at Saint Francis Hospital in Hartford, where he served as medical director between 2007 and 2021. He is currently the physician executive for the orthopedic service line at Trinity Health of New England. He is on the staff of Saint Francis Hospital and a member of Advanced Orthopedics New England.

In 2014, Dr. Schutzer and two colleagues, Ms. Steph Kelly and Ms. Maureen Geary, launched a consulting company, Novel Healthcare Solutions, whose mission is to establish effective and trusting business relationships between physicians and hospital partners\u2014and then create orthopedic Centers of Excellence.

Dr. Schutzer is also vice president and co-founder of Upswing Health, a health technology start-up whose charge is to help 10 million lives alleviate suffering from musculoskeletal pain by the end of 2023.

04:52 Why would competitive physician groups gang together?
09:02 \u201cEven if you never \u2026 bundle, going through the implementation process \u2026 will yield incredible unrecognized value.\u201d
10:19 \u201cIt demands an end-to-end care redesign process.\u201d
11:40 \u201cThe value of a COE is really unquestionable.\u201d
11:48 \u201cFor every dollar saved [in a COE], two-thirds was in the quality side, and one-third was in the price point.\u201d
14:38 Slide deck discussing the definition of a COE and its seven building blocks.
15:06 \u201cI\u2019m talking about business relationships between the physicians \u2026 these are the most fundamental [relationships].\u201d
16:24 \u201cIt is all about trust.\u201d
16:49 What is the most central issue as to why a COE does well or fails?
17:26 \u201cIt\u2019s not just data. It has to be actionable data because physicians naturally don\u2019t trust data.\u201d
22:55 \u201cEmployers are definitely taking note to patient-reported outcomes.\u201d
23:38 What is the seventh element that is necessary for a COE, and what is fundamental to that element?
24:28 Where will fee-for-service doctors be in 2 to 3 years?
25:46 \u201cThe only way that we can accrue the value that we deserve is through these types of relationships.\u201d
26:12 \u201cThe supreme motivator is opportunity.\u201d
28:03 How do physicians and providers begin a transformation of the marketplace they\u2019re in?
28:38 \u201cWhat they need from us is product. They need products to disrupt the status quo.\u201d
31:27 \u201cThe problem is that there are vendors who are working at the margin.\u201d

@SSchutzer of @THOfNewEngland discusses #centersofexcellence on this week\u2019s #healthcarepodcast. #healthcare #podcast #digitalhealth #healthtech

Why would competitive physician groups gang together? @SSchutzer of @THOfNewEngland discusses #centersofexcellence on this week\u2019s #healthcarepodcast. #healthcare #podcast #digitalhealth #healthtech

\u201cIt demands an end-to-end care redesign process.\u201d @SSchutzer of @THOfNewEngland discusses #centersofexcellence on this week\u2019s #healthcarepodcast. #healthcare #podcast #digitalhealth #healthtech

\u201cThe value of a COE is really unquestionable.\u201d @SSchutzer of @THOfNewEngland discusses #centersofexcellence on this week\u2019s #healthcarepodcast. #healthcare #podcast #digitalhealth #healthtech

\u201cIt\u2019s not just data. It has to be actionable data because physicians naturally don\u2019t trust data.\u201d @SSchutzer of @THOfNewEngland discusses #centersofexcellence on this week\u2019s #healthcarepodcast. #healthcare #podcast #digitalhealth #healthtech

\u201cEmployers are definitely taking note to patient-reported outcomes.\u201d @SSchutzer of @THOfNewEngland discusses #centersofexcellence on this week\u2019s #healthcarepodcast. #healthcare #podcast #digitalhealth #healthtech

Where will fee-for-service doctors be in 2 to 3 years? @SSchutzer of @THOfNewEngland discusses #centersofexcellence on this week\u2019s #healthcarepodcast. #healthcare #podcast #digitalhealth #healthtech

How do physicians and providers begin a transformation of the marketplace they\u2019re in? @SSchutzer of @THOfNewEngland discusses #centersofexcellence on this week\u2019s #healthcarepodcast. #healthcare #podcast #digitalhealth #healthtech

Recent past interviews:

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Lisa Trumble, Jeb Dunkelberger, Dr Ian Tong, Mike Schneider, Peter Hayes, Paul Simms, Dr Steven Quimby, Dr David Carmouche (EP343), Christin Deacon, Gary Campbell, Kristin Begley, David Contorno (AEE17), David Contorno (EP339), Nikki King, Olivia Webb, Brandon Weber, Stacey Richter (INBW30), Brian Klepper (AEE16), Brian Klepper (EP335), Sunita Desai, Care Plans vs Real World (EP333), Dr Tony DiGioia, Al Lewis, John Marchica, Joe Connolly, Marshall Allen, Andrew Eye, Naomi Fried