Patient-reported Outcomes

Value-based Purchasing for

Osteoarthritis and Total Knee
Arthroplasty: What Role for
Patient-reported Outcomes?

Abstract
Catherine MacLean, MD, PhD Prompted by the aims to improve the patient experience of care (including quality and
satisfaction), improve the health of populations, and reduce the per capita cost of
health care, the US healthcare system is embarking upon a new era in care delivery
that seeks to optimize healthcare value. Value, the consideration of quality relative to
Downloaded from https://journals.lww.com/jaaos by BhDMf5ePHKav1zEoum1tQfN4a+kJLhEZgbsIHo4XMi0hCywCX1AWnYQp/IlQrHD3Gamkn0m7hy6RQdEwn41RO+bmxdcZEjIhP+pWdHXXIw4= on 06/02/2018

cost, can be increased by improving quality, reducing cost, or doing both. Given that
patient-reported outcomes related to pain, function, and quality of life underlay both the
reason patients seek care for and the benchmarks by which treatment success is
measured for osteoarthritis, measures of these patient-reported outcomes figure
prominently in understanding the quality and hence value. Directed attention to patient-
reported outcomes has the potential to drive quality and efficiency improvements, but
only if the quality measures that are developed from them are clinically important,
scientifically acceptable, usable, and feasible.

the health care we purchase to treat OA. What

From the Hospital for Special Surgery,
New York, New York.
Dr. MacLean or an immediate family
member serves as board member,
owner, officer, or committee member
of the American College of
Physicians.
J Am Acad Orthop Surg 2017;25
(suppl 1):S55-S59
DOI: 10.5435/JAAOS-D-16-00638
Copyright 2016 by the American
Academy of Orthopaedic Surgeons.
Background
Osteoarthritis (OA) is a common and costly
disease affecting 27 million adults in the
United States.1 In 2013, OA accounted for
$73 billion, or 2.5% of US healthcare
spending.2,3 Total knee arthroplasty (TKA),
which is performed predominantly to treat
OA, accounted for $28.5 billion, or 1.1% of
all healthcare spending and (along with total
hip arthroplasty) was the single largest
expenditure for the Centers for Medicare and
Medicaid Services (CMS).4 As a result of an
increasingly large cohort of increasingly
overweight/obese senior citizens, utilization
of TKA is expected to grow over the next 15
years,5 with Medicare facing estimated costs
of $50 billion.6
Viewed within the context of the US health-
care system, which is generally recognized as
spending more money than other developed
nations,7 treatment for OA generally, and
TKA specifically, is a bright target for cost-
reduction initiatives. Given the many docu-
mented opportunities to reduce healthcare
costs in the United States generally, opportu-
nities certainly exist to reduce the cost of care
delivered for OA by working to eliminate
unsafe, unnecessary, and duplicative care.
The narrative surrounding cost reduction for
OA, however, is incomplete without consider-
ation of the impact on health that is achieved by
improvements are achieved for the $73 billion
spent to treat OA and for the $28.5 billion spent
on TKA? Did patients achieve reductions in pain
and improvements in function? If so, how much?
Were the improvements achieved big enough to
justify the money spent to achieve them?
Prompted by the following aims to improve
the patient experience of care (including qual-
ity and satisfaction), improve the health of
populations, and reduce the per capita cost of
health care,8 the US healthcare system is em-
barking upon a new era in care delivery that
seeks to optimize healthcare value. “Value,”
which is the consideration of quality relative
to cost, can be increased by improving quality,
reducing cost, or doing both. For OA, patient-
reported outcomes, especially of pain and
function, figure prominently in understanding
the quality and hence value.
Healthcare Quality Defined
Healthcare quality has been defined by the
Institute of Medicine as “the degree to which
health services for individuals and populations
increase the likelihood of desired health
outcomes and are consistent with current
professional knowledge.”9 Donabedian10
describes quality of care as the application of
medical science and technology in such a way
as to maximize health benefits without

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Copyright ª the American Academy of Orthopaedic Surgeons. Unauthorized reproduction of this article is prohibited.
Value-based Purchasing for Osteoarthritis and Total Knee Arthroplasty
increasing health risks.10 It is important to
note that in both definitions, quality is defined
not by absolute health outcomes or changes in
health outcomes, but rather in terms of the
probability of achieving maximal health ben-
efit as a result of the medical care provided.
The quality of health care can be assessed by
measuring the structures, processes, and out-
comes of health care. Structure refers to the
tools, resources, organization, and financing
used in the provision of health care. Structural
measures assess whether infrastructure ele-
ments are in place that are likely to increase or
decrease the probability of good health out-
comes. Structures relevant to OA include
qualified staffing to manage OA, hospital
programs to track and report surgical compli-
cations, and participation in quality-
improvement activities such as registries.
Quality structures related to patient-reported
outcome measures (PROMs) might include
having the infrastructure to collect PROMs or
participation in a registry or another quality
activity into which PROMs are reported and
feedback on performance is provided.
Process of care describes what healthcare
providers do for patients and includes taking a
health history, prescribing medications, and
performing tests or procedures. Care processes
relevant to OA include treating pain and
functional limitations with appropriate thera-
pies, including TKA, and the use of therapies to
prevent complications, such as prophylaxis to
prevent venous thromboembolism. Quality
processes related to PROMs include collection
of data on pain, functional status, and/or
quality of life using validated tools.
Health outcomes include both health status
and discrete events such as recovery from an
illness, death, and complications of medical
care. Patient-reported outcomes are health
outcomes that patients can feel for themselves
and are best reported by the patient because (1)
only the patients know whether they experi-
ence it, or (2) only the individual patients can
provide details about the level of difficulty that
they experience or assign context/importance
to the activity. Outcomes relevant to OA
include patient-reported pain and functional
status and complications of care, such as gas-
trointestinal bleeding, infections, and venous
thromboembolic events.
As discussed elsewhere in this issue,11 a
number of validated instruments are available
to assess patient-reported outcomes for OA,
generally, and for knee OA, specifically. The
two main constructs assessed by these
instruments are pain and functional status.
Several instruments also assess the ability to
work and quality of life, both of which can be
impacted by pain and functional status, and
by the health effects (positive and negative) of
therapies for OA.
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Copyright ª the American Academy of Orthopaedic Surgeons. Unauthorized reproduction of this article is prohibited.
Measuring Healthcare Quality
We measure quality to drive improvements in
health. Measurement and reporting of quality
drives population’s health improvement in the
following two ways: it identifies for providers’
areas of deficiency or “care gaps” that can be
addressed to produce better health outcomes, and
it identifies for patients and other purchasers of
health care the quality of different providers, al-
lowing them to choose ones who have the highest
likelihood of maximizing their personal health
outcomes or the health outcomes of populations.
Quality measures quantify quality concepts.
They do this by precisely defining the following:
the structure, process, or outcome of interest; the
population to which they are relevant; and the
specific clinical circumstances in which they
matter. Quality measures facilitate quantitative
measurement of quality within a defined pop-
ulation and allow for comparison over time and
across measured units. For example, does qual-
ity differ across geographies, insurance compa-
nies, or healthcare providers?
Characteristics of Good
Quality Measures
The National Quality Forum standards for mea-
sure endorsement12 lay out at a high level the
characteristics of good healthcare quality mea-
sures (Table 1). These standards require mea-
sures to be important, scientifically acceptable,
usable, and feasible. As a foundation, good
measures should address something important to
health that can be meaningfully impacted by
health care. The primary health effects of OA
that matter to patients are pain, functional lim-
itation, and impacts on quality of life, each of
which can be meaningfully impacted by health
care. Hence, measures of these outcomes or of
structures and processes that lead to these out-
comes would be meaningful.
Good measures must also be scientifically
acceptable such that they produce valid and reli-
able results. Valid measures actually measure what
they are intended to measure. Reliable measures
will produce the same result with repeated mea-
surement. The validity and reliability of numerous
PROMs for OA have been demonstrated.13–18
Scientific acceptability also requires appropri-
ate risk adjustment. Measures for which perfor-
mance would vary based on factors other than the
health care delivered need to be risk-adjusted to
understand the magnitude of quality and/or to
compare it across measured populations that
might be differentially affected by those factors.
Given the known impacts of baseline functional
status, contralateral joint disease, psychosocial,
and socioeconomic status19–22 on patient-
reported outcomes of pain and physical func-
Journal of the American Academy of Orthopaedic Surgeons
tion in OA, use of any such PROMs to assess
quality would require risk adjustment.
Usability refers to whether the results of a
measure can be used by healthcare providers,
patients, or purchasers to impact the quality of
care delivered to populations or individuals.
Good measures should be actionable by
healthcare providers to improve the care they
deliver, to patients to inform therapeutic choices
including provider, and to purchasers to drive
quality for their beneficiary population through
quality-based incentives and network design.
Feasibility refers to the practicality of mea-
surement. Currently in the United States, most
quality measures being used by health plans and
accreditation and other quality-reporting organi-
zations are based on administrative data because
these data are readily available and far less costly
to obtain than measures based on clinical data
that require medical record abstraction or mea-
sures based on data from patient’s self-reporting.
Quality measures based on patient-reported
outcomes have been largely regarded as not
feasible because they are not routinely collected
in clinical practice, and the infrastructure to
collect PROM data for quality measurement
largely does not currently exist. Increasing rec-
ognition of the importance of PROMs in
understanding health outcomes and quality,
especially for musculoskeletal disease, has led to
the development of quality measures based on
PROMs.
Characteristics of Good
Quality Measurement
To promote health improvement and value, we
not only need good quality measures but also to
make sure those measures are used well. Specifi-
cally, the scoring of quality measures needs to
reflect meaningful clinical standards, report sta-
tistically valid estimates, and be transparent in the
methods used to calculate reported point esti-
mates and thresholds. Clinical standards should
inform determination of the level of performance
that represents good quality or a meaningful care
gap. However, this is not the way quality is scored
for many programs. Rather, quality is often
defined based on performance relative to the
population mean, regardless of whether it is a
clinically rational quality threshold.
Given that the only reason TKA is performed is
to improve either pain or function, PROMs that
measure these are logical candidates for quality
assessment. However, to use such measures to
drive quality and value, the translation of the
results into meaningful levels of quality perfor-
mance must be determined. Is there a certain
absolute threshold or a change score for pain and
function that should be achieved to define a
high-quality result? Meaningful scores will no
doubt require risk adjustment. In addition, given
 Catherine MacLean, MD, PhD

Table 1
Characteristics of Good Quality Measures
Applications/Considerations for Patient-Reported
Outcome Measures (PROMs) for Knee
Domains Characteristics Osteoarthritis (OA)

Importance Measure addresses clinically important health issue.
Health care can have a meaningful impact
on the health issue.
The measure is focused on an important
health outcome or the clinical care that
leads to that health outcome.
Scientifically Measure is valid—measures what is
acceptability intended to measure.
Measure is reliable—produces the same
result when remeasured.
Measure is risk-adjusted, if appropriate.
Usability Measure is understandable to stakeholders
interested in healthcare quality.
Measure is actionable to drive quality improvement
by one or more stakeholders.
Pain, functional status, and quality of life are important
health issues for patients with OA.
Health care for OA is centered around improving these
outcomes.
Meaningful quality thresholds have not been established
for PROMs for OA.
Numerous PROMs for OA have demonstrated reliability
and validity.
Few PROMs have been used as measures of quality and
require validation in that context.
PROMs for OA are influenced by numerous factors and
require risk adjustment to be used as quality measures;
little work has been done in this area.
Different stakeholders require different reporting of
performance on quality measures for actionability.
Useful provider reports will include detailed information
on population characteristics (eg, age, risk strata, and
services utilized), and drill-downs to the patient level.
Useful patient/consumer reports will be specific enough
to individual patients (eg, performance stratified by the
age of the patient) to guide choice of procedure and
choice of provider (hospital and surgeon).
Useful payer reports will differentiate high- versus low-
quality providers to inform quality-based incentives and
determine of which providers will be included in networks.

OA = osteoarthritis, PROMs = patient-reported outcome measures

Table 2
Patient-reported Outcome Measures for Total Knee Arthroplasty Eligible for Voluntary Reporting in the Centers for Medicare and
Medicaid Services Comprehensive Care for Joint Replacement Modela
Type of PROM Eligible Tools Required Collection Period

Generic PROM instrument for TKA VR-12 or PROMIS-global 90–0 d before and 270–365 d after TKA
procedures procedure
Knee-specific PROM instrument for TKA KOOS Jr. Only, or KOOS Stiffness Subscale 90–0 d before and 270–365 d after TKA
procedures and KOOS Pain Subscale and KOOS procedure

a
KOOS = Knee Injury and Osteoarthritis Outcome Score, PROM = Patient-reported Outcome Measure, PROMIS = Patient-reported Outcomes Measurement Information
System; TKA = total knee arthroplasty; VR-12 = Veterans RAND 12-Item Health Survey

the range of clinical scenarios and patient goals
that drive decisions to perform TKA, it is unlikely
that percentiles of change scores or simple
observed expected ratios will identify high versus
low quality.
Current Uses of
Patient-Reported Outcome
Measures to Assess Quality
for Total Knee Arthroplasty
Probably, the most robust effort to use PROMs
to assess the quality surrounding TKA is the
Patient-Reported Outcome Measures Initiative of
England’s National Health Service (NHS), which
reports, collects, and publicly reports hospital-
level risk-adjusted Oxford Knee Scores (OKSs).23
In this program, preoperative, postoperative, and
change scores are reported relative to the
national average. A similar program recently
launched by MN Community Measurement
likewise publicly reports hospital-level OKSs for
patients who have undergone TKA as an
observed rate relative to an expected rate that is
adjusted for presurgical score and the type of
health insurance.24 MN Community Measure-
ment also deploys a process measure to assess the
proportion of patients who had an OKS collected
both preoperatively and postoperatively; the
statewide average is 24%. Similarly, the appli-
cation for the Blue Distinction Centers for Knee
and Hip Replacement and the Spine Surgery
Program requests information on the percentage
of patients with knee or hip replacement who
have undergone both preoperative and post-
operative functional assessment at least 6 months
after surgery but does not report it publicly.25
Working in conjunction with a multi-
stakeholder group, CMS has defined a specific set
of PROMs for collection as part of their com-
prehensive care for joint replacement (CJR)

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Value-based Purchasing for Osteoarthritis and Total Knee Arthroplasty
Figure 1
Model for value-creation opportunities for different levels of care aggregation. AEs =
adverse events, DRG = diagnostic-related group, ER = emergency room, OR = operating
room, pmpm = per member per month, THA = total hip arthroplasty, TKA = total knee
arthroplasty.
model (Table 2).26 Reporting of these PROMs
to CMS is voluntary, although hospitals that
report earn points for their overall quality
scorecard. Hence, these PROMs are being
used as process measures, that is, the hos-
pital passes the measure if it completes pre-
and postsurgical PROMs for a specified
number or proportion of patients who
undergo total joint replacement.
Use of Patient-Reported
Outcome Measures in Value-
Based Purchasing
Broadly speaking, “value-based purchasing”
(VBP) refers to any health payment system that
purchases based on value or seeks to use pay-
ment mechanisms to drive high-value care.
Opportunities to purchase or create value exist
across the spectrum of care aggregation from
the individual unit to the procedure, the epi-
sode, and the population. Opportunities exist
to create value at each of these levels with
greater opportunity as the aggregation
increases (Figure 1). The specific opportunity
differs at each level, but at every level, the
opportunity entails either improving quality or
reducing cost, or both; the bigger the unit of
aggregation, the greater the opportunity to
create value. The value efforts across these
levels of aggregation should roll up to create the
best outcomes available at the lowest cost.
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Copyright ª the American Academy of Orthopaedic Surgeons. Unauthorized reproduction of this article is prohibited.
the 90 days after the procedure. If the actual epi-
sode cost comes in below the set target price, the
hospital can keep the difference within specified
rules if it meets the program quality standards.26
Hospitals that report specified preoperative and
postoperative PROMs to CMS can earn two
points on the program scorecard. For hospitals
near a threshold, those points could boost the
hospital to the next quality tier. Depending on
which threshold is crossed and the year of the
program, the hospital could become eligible for a
reconciliation or quality incentive payment, or
see a 0.5% to 1.0% reduction in the effective
discount for reconciliation payment or
repayment amount. It is anticipated that CMS
will eventually publicly report facility-level
performance on PROMs. The manner in
which these will be reported, used to define
quality, and/or incorporated into quality-
based payments remains unknown.
Future of Patient-Reported
Outcome Measures in Value-
Based Purchasing
Realization of the full potential of PROMs as
tools to create value in the United States will
require the following: implementation of infra-
Because the primary treatment objectives for
structure to routinely collect and report them,
OA are improvement of pain, functional status,
analytics to develop appropriate risk adjustment,
and quality of life, PROMs have an important
thoughtful consideration to develop clinically
role in determining whether the care delivered
meaningful quality thresholds, and financial
creates the health we seek to create and direct care
incentives that promote quality improvement
processes to achieve those goals. In a value-driven
within individual hospitals and collaboration
marketplace, PROMs can serve as benchmarks
across hospitals.
against which reimbursements can be determined
and providers of specific procedures such as TKA
can be selected by patients or payers. Perhaps,
more importantly, they can be used as guideposts References
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