What’s Missing from Value-Based Specialty Contracting? Behold the Integrated Practice Unit (IPU)

Takeaway: What you can do next

• Traditional health care systems and providers will not implement IPUs under current financial incentive
• Value-based organizations - such as payors, employers, and risk-bearing provider organizations – must look to non-traditional solutions for implementing IPUs into practice
• Digital health solutions are key partnership agents in implementing IPUs due to their ability to scale in a convenient, affordable, and accessible fashion

Background

In health care, the focus on value-based care has grown steadily over the last decade, particularly in specialties such as orthopaedics which continue to fuel a substantial proportion of escalating health care spending without a commensurate improvement in outcomes at the population level. Traditional healthcare delivery systems often fragment care across multiple providers and locations, which can lead to overutilization of low value interventions, inefficiencies, suboptimal health outcomes, and poor patient and clinician experiences. An Integrated Practice Unit (IPU) offers a solution by organizing care around the patient’s medical condition to improve value i.e., optimal health outcomes benefiting patients relative to every dollar spent. In this article, we explore what IPUs are, how they are developed, what they look like in musculoskeletal care, and the outcomes they generate. We will also address how payment systems can be aligned with IPU structures to sustain high-value care.

What is an Integrated Practice Unit (IPU)?

An IPU is a multidisciplinary team that collaborates to provide comprehensive care for patients with specific conditions or health needs. This model emphasizes value-based care by integrating services across the entire care pathway—from diagnosis to treatment, rehabilitation, and follow-up. IPUs focus on outcomes that matter to patients and ensure care including a comprehensive range of services are centered around the patient and their preferences, values, and needs, and delivered efficiently, in a highly coordinated and cohesive way, without unnecessary delays.

At its core, the IPU model is designed to improve both outcomes and patient satisfaction while reducing costs. Key characteristics include:

• Multidisciplinary care teams composed of physicians, physical therapists, nurses, and other relevant providers.
• Shared goals and accountability across the team for outcomes and costs.
• Patient-centered care pathways that streamline care and reduce fragmentation.
• Continuous measurement of outcomes and costs for all services provided.

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The IPU approach fosters teamwork by aligning incentives, encouraging coordination, and focusing on both clinical outcomes and patient-reported outcomes.

How Do We Develop IPUs?

Developing IPUs requires a thoughtful, stepwise approach to ensure successful integration and operational alignment. Here are the critical steps:

1. Identify a Patient Population or Condition:
   Start by selecting a condition or a group of related conditions where care coordination could improve value, such as lower extremity joint pain.
2. Create a Multidisciplinary Care Team:
   Assemble a team of relevant healthcare professionals—including orthopaedic surgeons, primary care physicians, physical therapists, and behavioral therapists —based on the needs of the target patient population.
3. Standardize Care Pathways:
   Develop evidence-based clinical pathways that guide diagnosis, treatment, and rehabilitation. This ensures that patients receive consistent and high-quality care.
4. Implement Data Infrastructure for Continuous Measurement:
   Track both clinical outcomes (e.g., functional improvement, complication rates) and patient-reported outcomes (e.g., pain relief, quality of life). Cost tracking is also essential.
5. Align Incentives Across the Care Team:
   Incentivize team members to work towards shared goals by implementing performance-based rewards tied to patient outcomes and value.
6. Provide Integrated Support Services:
   Include administrative support, care coordinators, and other essential non-clinical staff to reduce burdens on the clinical team and ensure smooth care delivery.

What Does an IPU for Musculoskeletal Care Look Like?

In musculoskeletal care, an IPU brings together all relevant services, from pre-operative assessments to rehabilitation, under one umbrella. A well-structured IPU for musculoskeletal conditions such as joint pain or spine care would have the following components:

1. Patient Engagement and Shared Decision Making:
   •  Patient education and shared decision-making consultations.
   •  Risk stratification and care planning evaluations for comorbid conditions.
2. Surgical and Medical Care Teams:
   Orthopaedic surgeons collaborate closely with physical therapists, social workers, nutritionists, behavioral therapists, alongside anesthesiologists, operating room staff, and other specialists to optimize both non-surgical and surgical outcomes respectively.
3. Whole Person Care Delivery:
   A comprehensive range of evidence-based non-operative and operative treatments are offered with whole person care strategies developed and delivered early on. For instance, behavioral health informed physical therapy for pain related psychological distress, nutritionist support for weight loss, and a social worker for tackling unmet social needs.
4. Patient Monitoring and Outcomes Tracking:
   Patients are monitored using both objective clinical evaluations (simple imaging, clinical assessment for potential complications) combined with measurement of patient reported outcome measurements –subjective measures of health status from the patient’s perspective.  
5. Administrative and Care Coordination Services:
   A care coordinator helps patients navigate their journey from diagnosis to follow-up care, ensuring timely access to necessary services and avoiding unnecessary steps.

What are the Outcomes of IPUs?

Evidence suggests that IPUs improve clinical outcomes, enhance patient satisfaction, and reduce costs. Studies indicate that IPUs can reduce overall costs by up to 25% for certain conditions by eliminating redundancies and streamlining care pathways. For example, a Harvard Business School report highlighted that IPUs improved recovery times and lowered readmission rates by 15-20%, while also boosting patient satisfaction scores by 20-30% in specialized care areas like orthopedics and cardiovascular health.

“IPUs organize care teams around patient needs rather than individual services, which improves outcomes and decreases costs by as much as 25%.”
Source: Harvard Business Review, “The Strategy That Will Fix Health Care”

Some of the documented benefits include:

• Improved functional outcomes: Patients report better pain relief and faster recovery in musculoskeletal IPUs for both non-operative and operative management.
• Higher patient satisfaction: Patients benefit from clearer communication, smoother care pathways, and fewer delays.
• Lower total costs of care: Integrated services and optimized care pathways eliminate redundant processes, reducing costs associated with unnecessary testing or delayed rehabilitation.

How Can We Design Payment Models Around IPUs?

To fully realize the potential of IPUs, payment models must align with the value they deliver. Traditional fee-for-service payments incentivize volume over value, which contradicts the philosophy of IPUs. Below are some strategies for designing payment systems that support IPUs:

1. Value-based network-contracting:
   Health plans (and, by extension, other risk-bearing organizations and employers) partner with specialty provider groups to facilitate delivery of the IPU services through traditional claims-based reimbursements.  Such an arrangement would allow for multidisciplinary case rates and elimination of patient/member cost-sharing responsibilities, resulting in maximal adoption.  
2. Shared Savings Programs:
   IPUs that reduce the total cost of care while meeting predefined quality benchmarks can share in the savings. This model incentivizes efficiency without compromising care quality.
3. Outcome-based Incentives:
   Payers can offer additional bonuses or penalties based on clinical outcomes and patient-reported results. This ensures providers remain accountable for both short- and long-term outcomes.
4. Capitated Payments for Population Health Management:
   In cases where an IPU manages a large patient population (e.g., all musculoskeletal care in a health system), capitated payments can encourage population-level improvements in health outcomes and preventive care.

A condition-based bundled approach to care delivery via an IPU has demonstrated improvements in costs alongside improvements in health related outcomes and care quality.

Conclusion

Integrated Practice Units represent a promising model for delivering high-value orthopaedic and musculoskeletal care. By aligning care delivery with patient needs, fostering multidisciplinary collaboration, and focusing on outcomes that matter to patients, IPUs can transform the healthcare landscape. However, their success requires thoughtful planning, robust data tracking, and supportive payment models. As healthcare continues to shift towards value-based care, IPUs offer a pathway to better outcomes, greater patient satisfaction, and more sustainable healthcare delivery.

Protera’s Points

You may be asking yourself – ok, IPU’s are great, but how do I get started?  The best way is to convince your partner orthopedic groups to create these programs so that patients (or members) can get enrolled.  Such a strategy is prudent only if the risk-bearing organization is a multispecialty provider group, able to coordinate these services across different business and clinical units.

For most, this is not a feasible option.  The quickest and easiest way to implement IPU care is through partnership, either with an existing in-person IPU (i.e., Dell Medical School, Reliant Medical Group, or other centers of excellence) or with a digital health clinic.  

Key advantages of partnering with value-based digital health clinics include scalability and accessibility.  Patients and members must be able to access an IPU to benefit from the services; thus, digital health affords the opportunity to reach a population regardless of where they live or when they work.  

Because of the complexities of chronic back and joint pain, including the contribution of pain coping, mental health, and social support to symptom severity, the IPU must be able to deliver high-quality clinical care.  Regardless of in-person or digital, care must be delivered according to the main tenets of IPUs; namely, multidisciplinary, team-based care.  The more clinical integration, the better.

About Protera Health

Musculoskeletal (MSK) conditions are significant cost drivers for health plans and value-based organizations.  Protera Health solves this problem through a multidisciplinary virtual clinic, which results in better outcomes and lower costs of care.

Book a demo today to find out if our approach, especially the ability to deliver in-network care through claims and medical expenses, is right for your organization.  For more information, be sure to visit our website and our library of clinical experience.

References

1. Porter, M. E., & Lee, T. H. (2013). The strategy that will fix health care. Harvard Business Review, 91(10), 50-70.
2. Kaplan, R. S., & Porter, M. E. (2011). How to solve the cost crisis in health care. Harvard Business Review, 89(9), 46-64.
3. Koeck, C. M., & Fischer, M. A. (2019). Implementing the Integrated Practice Unit concept in musculoskeletal care: A systematic review. Journal of Health Organization and Management, 33(7/8), 941-955.
4. Chandra, A., & Skinner, J. (2012). Technology growth and expenditure growth in health care. Journal of Economic Literature, 50(3), 645-680.
5. Porter, M. E. (2010). What is value in health care? New England Journal of Medicine, 363(26), 2477-2481.