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A Commitment to Quality Through Value-based Care: David Ott, MD

By Edward Araujo, Managing Editor, Arizona Physician

Photography by Ben Scolaro,

From Print Issue - Fall 2021
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David Ott, MD, is a passionate and well-respected Orthopedic Surgeon who is proud to provide the highest quality of orthopedic care to the Arizona community. To Dr. Ott, it begins with his patients and the trust they bestow on him from the initial visit, to follow up appointments, and surgery.   Patients leave, knowing Dr. Ott is fully invested in their overall health and confident that Dr. Ott’s operating skills will improve their mobility.


“It’s extremely humbling when you realize a one-hour operation can give people back their existence!” 


Treating or Fixing

Treating patients or fixing patients. That is a dilemma many physicians face early in their careers. The answer does not always come easy. For Dr. Ott, it happened during medical school at UCLA, where he originally wanted to be an internist. Yet, he found that he was good at the procedural aspects of medicine. His internal medicine rotation left an impression that “we treated a lot of people, but we weren’t fixing patients,” he says.


At UCLA, Dr. Ott enjoyed having access to surgical tools. Often, patients left better than when they first came to see him, and some were completely back to normal function. That sense of fulfillment has driven his career for the last 35 years. 


“In orthopedics, I’m honored by the fact that we get to actually eliminate people’s problems,” says Dr. Ott in his office at OrthoArizona, a growing practice he co-founded.


Dr. Ott has focused his practice on joint replacement, especially hip and knee replacements. He states, “The Lancet described the hip replacement as the operation of the century and that was before we had some of the technology we have now, which has made it even better.”


“When someone comes in miserable, and their quality of life is markedly impaired, they just cannot do what they want to do, whether its playing with their grandkids, walking up and down stairs, going to the grocery store, going for a hike. Then we give that back to them, it’s really wonderful” says Dr. Ott.

Clinical and Administrative Work

A day in the life of an orthopedic surgeon and administrative executive like Dr. Ott, may not be typical. Clinically, Dr. Ott will typically see around four to six new patients and around fifteen follow up patients by midday. He sometimes has three operations each afternoon. His day would not run well without the assistance of his physician assistant, Christopher Rubio, who has been with him for 11 years, and a talented team of nurses and certified nursing assistants.


Dr. Ott is a co-founder and Senior Vice President of Operations at OrthoArizona. He remains focused on improving the patient experience and, as he calls it, “doing things the right way.” From the creation of an outpatient surgery center to collaborating with Dignity Health to build Oasis Hospital which has some of the highest HCAHPS in Arizona, Dr. Ott’s imprint on excellence, hard work, and better patient care stands out.


Value-Based Care

According to Dr. Ott, the concept of value-based care was promulgated because physicians were paid for treating sick, injured, and worn-out people, but not for preventing people from getting sick or reducing injuries.


Uwe Reinhardt, Ph.D., one of the foremost health care economists who wrote about value-based care, stated it was a utopian view. That view emphasized physicians guiding patients properly, helping to reduce the burden of disease and disability.


“The global perspective is extraordinarily difficult to implement, because when you get down to it, physicians are individual providers one-on-one with patients in an exam room,” Dr. Ott states. He believes value-based care will not work for individual physicians as it only works when you have a group of physicians working together.


Value-Based Care in Orthopedics

From 2013 to 2018, the Center for Medicare & Medicaid Services (CMS) held the Bundled Payments for Care Improvement (BPCI) elective initiative. It was compromised of four broadly defined models of care, which linked payments for the multiple services beneficiaries received during an episode of care. The original program allowed participating providers to choose from 30, 60, or 90-day reimbursement bundles.


BPCI would not reimburse physicians for complications after a total knee replacement, for example. The paradigm had shifted from fee for service and would make physicians or practices responsible for the entire ninety-day episode of care to be paid through a target price negotiated with CMS. Other costs like anesthesia, post-surgery care, skilled nursing, acute rehabilitation, home health, or readmissions, even if it is a readmission unrelated to the orthopedic surgery, would all be deducted from the negotiated rate. Yet, if the total costs for an episode of care came under the target price, then the physician or practice would keep the difference.


Value-Based Care at OrthoArizona

Dr. Ott played a pivotal role in OrthoArizona’s decision to join the BPCI program. At the time OrthoArizona, was doing around 1,800 knee and hip replacements per year. They decided to plunge into value-based care, knowing they could minimize risk by having 68 physicians on staff. Per Dr. Ott, “As an individual provider, taking on patient complications or any post -surgery risks, makes this reimbursement plan unfeasible.” OrthoArizona and CMS negotiated a target price based on historical costs.


Administering the shift to value-based care, Dr. Ott, and the team at OrthoArizona found ways to reduce costs. Referring patients outside of the group was not necessary for patient outcomes and only increased costs. Pre-BPCI, OrthoArizona was using home health care around 60 – 80% of the time, skilled nursing facilities and acute rehab centers about 30-40% of the time. Once OrthoArizona had shifted to the BPCI program, the costs of sending patients to those type of facilities decreased to between 5 and 10%.


Cost reductions and patient quality are connected. Dr. Ott and the OrthoArizona team analyze data to better identify patients who are at risk for bad outcomes from surgical procedures. Among the 800 employees at OrthoArizona are a program director, nurse case managers, and navigators who ensure patients receive resources they need before and after surgery. Fewer complications lead to more profit under the negotiated rates.


OrthoArizona also implemented internal key performance indicators (KPIs) that would hold all physicians accountable. KPIs such as home health care usage, skilled nursing usage, readmission rate, average readmission cost, target price, total episode of cost, etc., now factor into which surgeons they retain or external partners they use for care.


Does Value-Based Care have a Future?

Dr. Ott says, “Value-based care done properly incentivizes and rewards quality. Yet, there is still a volume component that needs to be tied to it. It also has an accountability and warranting of work that doesn’t exist in traditional fee for service.”

The danger of a reward versus penalty-based reimbursement system is it can push physicians to focus on attaining the rewards but not learning from each care episode to do better. Another danger is that both CMS and commercial insurance groups will focus more on cost instead of outcomes or the patient experience. The continued lowering of target pricing can also have a negative effect on providers, making them less willing to participate. Providers can begin to lower their quality of care.


Final Thoughts

OrthoArizona has been practicing a form of value-based care before the recent iteration from CMS. For over 20 years, OrthoArizona has worked to offer competitive rates, provide internal accountability, and improve quality of care for better patient outcomes. They set a high standard that all physicians agree to pursue. “The organization is constantly measuring and evaluating their quality of services because that’s the future of healthcare,” says Dr. Ott.


David Ott, MD, has been an advocate for outcomes-based reimbursement since he started practicing medicine. Quality is a staple of the orthopedic surgeries he provides. He is proud of the shift he and his colleagues have made to align their approach with value-based care and looks forward to finding other ways to get patients back to their daily activities.

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