Expanded health insurance coverage under the 2010 Patient Protection and Affordable Care Act , more robust economic growth, and an aging population (the “Silver Tsunami”) are expected to result in a continued greater demand for health care goods and services in the USA. Thus by 2023, a projected 19.3 % of the USA gross domestic product will be spent on health care [19]. Furthermore, surgical care currently accounts for an estimated 52 % of hospital admission expenses in the USA [20]. Fragmentation and inefficiency in surgical care delivery, defensive medicine, discordant incentives between stakeholders who deliver versus those who pay for this care, and a lack of emphasis on value are contributing to excessive surgical harm and expenditures [21, 22].

Leading health economist, Michael Porter, has asked the fundamental question, “What is value in health care?”—defined it as the ratio of health outcomes achieved per dollar spent [23, 24]. However, Porter observed that value in health care remains largely unmeasured and misunderstood, partly because its “stakeholders have myriad, often conflicting goals, including access to services, profitability, high quality, cost containment, safety, convenience, patient-centeredness, and satisfaction” [23]. Therefore, despite the current contentious health care environment, all stakeholders must embrace a value-based framework, given its unifying primary goal of improving outcomes while doing so as efficiently as possible [25].

Like the Patient-Centered Medical Home [26], upon which it was patterned [2], the Perioperative Surgical Home essentially seeks “to improve value for patients, where value is [specifically] defined as patient outcomes achieved relative to the amount of money spent” [27]. This basic quotient translates into a health care value equation (Fig. 46.2) that is applicable to the Perioperative Surgical Home, whose numerator includes perioperative quality, safety, and satisfaction and whose denominator is the total costs of perioperative care [13].

Rather than continuing to reward the volume regardless of quality of care delivered, the goal of the Department of Health and Human Services is to increase the proportion of Medicare value-based purchasing from 30 % by the end of 2016 and to 50 % by the end 2018 [28, 29]. The Health Care Transformation Task Force , a new coalition of the country’s largest health care systems and commercial insurers, is similarly committed to transitioning the way providers and hospitals are paid from the traditional volume-based, fee-for-service contracts to one predominately linked to the patient centered value of care. This task force is committed to shifting 75 % of non-governmental health care payments to value-based arrangements by 2020 [30].

There are a number of drivers of health care value, which collectively represent a “burning platform” that will necessitate a fundamental change—a “New Frontier”—in perioperative care delivery and payment models in the USA, all being closely watched by many health care systems internationally (Fig. 46.3) [13]. Likely the most pressing of these drivers of perioperative health care value is the Bundled Payment Initiative for Care Improvement (BPCI) [13]. The BPCI has been introduced by the Centers for Medicare and Medicaid Services (CMS) to break existing health care system silos down and to improve patient care through innovated payment models that promote coordination of care and quality through a more patient-centered approach [31, 32]. Under the initiative, organizations enter into payment arrangements that include financial and performance accountability for episodes of care.

In Model 4 (final phase of its BPCI), “CMS makes a single, prospectively determined bundled payment to the hospital that encompasses all services furnished by the hospital, physicians, and other practitioners during the episode of care, which lasts the entire inpatient stay. Physicians and other practitioners submit “no-pay” claims to Medicare and are paid by the hospital out of the bundled payment” [32, 33]. On April 1st, 2016 CMS started the Comprehensive Care for Joint Replacement (CJR) model, which will hold hospitals accountable for the quality of care they deliver to Medicare fee-for-service beneficiaries for hip and knee replacements. Through this payment model, hospitals in 67 geographic areas will receive additional payments if quality and spending performance are strong or, if not, potentially have to repay Medicare for a portion of the spending for care surrounding a lower extremity joint replacement procedure.

The Perioperative Surgical Home care model can respond successfully to such bundled payments where historically, hospitals, surgeons and other physicians, and post-acute care providers have been paid separately for services occurring during and after hospital admissions.

Quality in health care describes the extent to which health services provided to individual patients and patient populations improve desired health outcomes and are consistent with the current body of knowledge [34]. In 2001, the Institute of Medicine (IOM) defined quality health care as “safe, effective, patient-centered, timely, efficient and equitable” [35]. The Agency for Healthcare Research and Quality (AHRQ) defined quality simply “as doing the right thing for the right patient, at the right time, in the right way to achieve the best possible results” [36]. While significant strides in quality have been made in the last century, “doing the right thing” is no longer expected to just improve traditional metrics, such as mortality, but to also improve patient-centered metrics such as health-related quality of life and patient-reported outcomes. These new challenges of the modern era necessitate more resourceful approaches for continued improvement in health care. As a more comprehensive yet integrated, value-based, and patient-centered model, the Perioperative Surgical Home is anticipated to provide a modern framework to achieve these goals.

Many of the continued challenges in achieving high quality care arise from the underuse, misuse, and overuse of health services, including surgery [37, 38]. Variations in these practice patterns can lead to undesired measures of quality , including increased mortality, morbidities, lengths-of-stay, readmissions, and cost [39, 40]. Modern efforts in quality improvement (QI) focus on minimizing variations in care by using best-available evidence to standardize care pathways for patients. Successful results from standardizations of care have been repeatedly demonstrated in disciplines ranging from cancer care [41] and geriatrics [42] to obstetrics [43] and outpatient ambulatory medicine [44]. Surgical patients are particularly amenable to QI efforts as these patients require complex care in a surgical microsystem defined by multiple providers in varying environments, and attendant quality metrics are readily measurable [45]. A deliberate method in standardizing the continuum of care for the surgical population and reliably measuring its outcomes has the potential to achieve significant, far-reaching gains in quality of care and health outcomes [46].

The Perioperative Surgical Home aims to improve quality by standardizing patient care in every phase of the perioperative continuum. While the Perioperative Surgical Home is a relatively new concept and direct practical examples are limited, evidence from the Patient-Centered Medical Home [47] and Enhanced Recovery After Surgery (ERAS) pathways [48, 49] demonstrate that standardization of care can positively impact quality with significant reductions in length-of-stay, readmissions, morbidities, and cost. Standardization studies have also demonstrated significant gains in less-traditional, but equally if not more important, quality metrics including short-term quality-of-life [50], reduced patient readmission [51] and other health-related quality measures [52]. These studies suggest that high-quality care in the modern era is best achieved not by the lone practitioner at a single patient encounter but by a cross-disciplinary, collaborative, and consistent delivery of care by all stakeholders across the entire patient experience [53].

The development and implementation of the Perioperative Surgical Home is gaining momentum, and studies of individual elements of the Perioperative Surgical Home show promising results in supporting their effectiveness in improving many measures of quality [54]. The organization of these elements under one comprehensive system produces a powerful construct that may gain more in quality than any one component by itself. Recently, the Perioperative Surgical Home has been successfully implemented in the Veteran Health Administration (VHA) with positive, collaborative effects on health care delivery at a single institution [55]. These results parallel the well-recognized effects of the Patient-Centered Medical Home on quality improvement in both patient and provider-centered measures of quality [47].

While the definitions and measures of quality will undoubtedly continue to grow, the Perioperative Surgical Home appears well-positioned to facilitate patient engagement through preoperative risk optimization of chronic diseases management, patient education and post-acute care coordination—all anticipated to improve outcomes and overall quality of care.

Importantly, this engagement provides a unique and meaningful opportunity for stakeholders to address other top priority issues in health care such as health-related disparities and patient safety. Disparities, as an example, are caused by a confluence of patient, provider, and systemic factors [56] and the ability to detect, understand and reduce health-related disparities requires a comprehensive approach. Factors such as poor health literacy and inconsistent patient–provider communication [57] contribute to disparities and could be better targeted with more patient-centered, standardized delivery of care as championed by the Perioperative Surgical Home. While future studies will begin validating its positive effects on traditional quality metrics, the Perioperative Surgical Home is positioned to make its most groundbreaking impact on adjoining, quality-associated frontiers such as health-related disparities and patient–provider communication.

Patient safety is the foundation upon which quality care is based [35], and both concepts are inextricably linked when building a trustworthy health care delivery system. While the definition of patient safety is constantly evolving, the World Health Organization (WHO) defines patient safety as the “prevention of errors and adverse effects to patients associated with health care” [58]. The Institute of Medicine (IOM) considers patient safety “indistinguishable from the delivery of quality health care” [59]. Effecting changes in quality therefore has repercussions on patient safety. The Perioperative Surgical Home aims to provide not only the highest quality of care but also the greatest level of patient safety by comprehensively standardizing perioperative processes based on the best clinical care and safety practices.

Improving patient safety is an international priority. The landmark 1999 IOM report “To Err is Human” estimated that as many as 98,000 people die every year from preventable medical errors that occur in hospitals [60]. These examples include wrong-site surgeries, hospital-acquired infections, and adverse drug events [61]. The 1999 IOM report sparked a remarkable series of events, including Senate bill 580 (Healthcare Research and Quality Act of 1999) that renamed the Agency for Health Care Policy and Research to the Agency for Healthcare Research and Quality (AHRQ). In 2004, the Institute for Healthcare Improvement (IHI) implemented the “100,000 Lives Campaign” with the goal of saving 100,000 lives by challenging hospitals to improve health care quality and patient safety through six goals: develop rapid response teams, provide evidence-based care for acute myocardial infarctions, prevent adverse drug events, administer appropriate perioperative antibiotics, and use central line and ventilator bundles [62]. While this campaign succeeded in catalyzing institutions to focus on patient safety, significant variations in institutional effort and heterogeneous results suggested that there was a need for more comprehensive, reproducible, and effective safety strategies that targeted how best to implement these solutions while addressing the barriers to uptake and behavior change.

The complex nature of modern health care invites errors to occur, and efforts to mitigate these risks require innovative approaches. The 2007 Joint Commission’s Annual Report on Quality and Safety identified significant determinants of errors and reported that inadequate communication was the most common root cause of sentinel events from 1995 to 2005 [63]. Additional causes of medical errors included inadequacies in patient assessments, organizational culture, care planning, continuum of care, and training. Few would refute that better communication and coordination of care can improve patient safety and resultant health outcomes. While the direct effects of the Perioperative Surgical Home on patient safety have yet to be fully validated or realized, studies have consistently demonstrated that standardization of care, from patient hand-offs [64] and pre-operative surgical checklists [65] to insulin regimens [66, 67], leads to higher levels of patient safety [68]. Models like ERAS and the Patient-Centered Medical Home have also suggested that the delivery of consistent care and communication across the entire care continuum improves both safety and quality [47–49]. Reducing variability in health care structures and processes, which is a principle goal of the Perioperative Surgical Home, may therefore provide the greatest gain in patient safety and related quality.

As the discipline of safety science continues to evolve, our ability to identify, understand and reduce harm necessitates innovative strategies [69]. The Perioperative Surgical Home provides the platform to engage and target key determinants of patient safety at all points of care from the preoperative assessment to the postoperative debriefing and hospital stay. The Perioperative Surgical Home is furthermore aligned with the central tenet of patient safety which posits that systemic change is far more productive in reducing medical harm than targeting individuals. Exacting these changes in the perioperative continuum alters habits and expectations for all stakeholders, from patients to providers, and allows the Perioperative Surgical Home to change not only our perspective towards safety but also the culture in providing the safest and reliable care for all surgical patients.

Patient satisfaction has garnered greater attention as a metric of health care provider performance and an important dimension of value-based health care . While defined in a number of ways, patient satisfaction is now publicly reported to help patients choose more discernibly among available providers [13, 70].

There are numerous demonstrated benefits to keeping patients satisfied [71]. Satisfied patients are more likely to adhere to prescribed treatment plans, to maintain an ongoing relationship with a health care provider, and to realize subsequent benefits related to health care outcomes [72]. Providers’ interests are also well served by satisfied patients, as they may realize increased patient volume, an enhanced community reputation, reduced malpractice claims, more satisfied staff, decreased staff turnover, and improved efficiency [72].

Patient satisfaction is widely recognized to be multidimensional and highly personalized, but at its core is based upon delivering patient-centered care [73]. Research shows that how patients perceive their health care experience reflects socio-demographic characteristics, such as education level, age, race/ethnicity, income, and health status [74]. Studies have observed that patients with younger age, better health, higher income, and greater education tend to be less satisfied as compared to the older patients and those who are sicker or have a lower socioeconomic status [75–77]. However, it is no longer enough for patients to be merely satisfied with their health care [78]. Patients’ expectations and perceptions of their experience may vary widely, but ultimately, they seek health care that is patient-centered and yields the outcomes that they value and thus expect most [79].

Although patient-centered care and patient satisfaction have been the central focus, there has been inadequate attention paid to surgeon and other providers satisfaction [80]. It is well known that surgical services (the operating rooms) drive hospital financial performance. The contribution margins per hour of OR time, although rather variable, can reach up to $2500.00 [81, 82]. Due to this significant financial impact, effective and efficient operating room utilization is paramount not only to surgeons but to all stakeholders.

The Perioperative Surgical Home supports multispecialty teams that design and implement patient-centered, data-driven, surgical service-specific workflow processes, starting from when the decision for surgery is made. These processes include comprehensive preoperative patient preparation, intraoperative management, and postoperative care. Surgical service-specific teams develop standardized care and workflow plans to address (a) all components of the preoperative assessment and optimization; (b) all intraoperative elements of the “day of surgery” patient encounter and experience; and (c) all postoperative care, starting with minimizing postoperative nausea and vomiting and pain in post-anesthesia care unit (PACU) and ending with long-term plans for rehabilitation. Standardized care plans are based on evidence-based-medicine, but take into consideration institutional and surgical procedure, and local surgical team-specific variations.

The Perioperative Surgical Home seeks to improve patient satisfaction, by promoting shared decision-making , earlier and greater engagement in patient education and preoperative optimization, standardized and thus likely better pain and postoperative nausea/vomiting management, shortened stay in hospital and ultimately, improved outcomes and experience with the total care episode [83]. From the surgeon’s prospective, the Perioperative Surgical Home seeks to improve satisfaction by creating more efficient operating room scheduling and patient throughput. The sustained success of these operational changes must be based upon data (e.g., key performance indicators) and preferably confirmed using “Six Sigma” or “Lean” methodologies . Appropriate patient preoperative optimization decreases delays and cancellations on the day of surgery, assuring that surgeons are able to use their operating room (OR) block time with maximum efficiency. Finally, patients satisfied with their care are less likely to initiate malpractice claims and are the best advocates to endorse their physicians [54].

The health care value equation for the Perioperative Surgical Home cannot be defined without including the costs associated with the optimal care in the equation. The Healthcare Cost and Utilization Project estimates that about 15 million hospital stays each year involve an operating room (OR) procedure and these hospital stays are 2.5 times more expensive than admissions without an OR procedure [84]. The OR is a significant cost center and revenue generator for the hospital. The majority of costs associated with surgery are incurred on the day of surgery. The economic definition of cost is the value of opportunity forgone as a result of engaging resources in an activity. From the health care providers’ prospective, there are four basic reasons to measure costs: (a) to make economic decisions for resource allocation; (b) as justification for reimbursement; (c) to encourage or discourage use of services; and, (d) for income and asset measurement for external parties [85]. However, the reality in health care is that measurement of these economic variables has been extraordinarily challenging and controversial. Lead health economists have observed, “an almost complete lack of understanding of how much it costs to deliver patient care” [86].

From payers’ perspective, the “unit” of cost is the price paid for each unit of service multiplied by the frequency of services. The mix of services, and the variation in price per unit paid to different providers, makes it difficult to assemble the reasonable cost of providing care for an individual plan member for a specific procedure. All above makes it difficult for consumers, employers, and health plans to understand and agree on the total price paid for an episode of care and to transparently compare that price paid from one provider to another [87].

Deming wrote that you can only improve a process that you measure [88]. Information enables decision-making and, ultimately, empowers change. However, with the paradigm shifting from “fee for service” (FFS) and “Diagnoses-Related Group” (DRG) to the “accountable care organization” (ACO) model, hospital systems are faced inevitably with major adjustments to their payment system.

Hospital cost accounting software systems integration with multiple hospital information systems has enabled a bottom-up cost method otherwise known as Activity-Based Cost Accounting [85]. This method aims to establish the actual of specific resources consumed to provide each service and is presently used to price surgical services by measuring expense at the patient care level and working upward. Activity Based Costing (ABC) method maps all surgical procedure related activities, calculates the cost associated with each activity and the unit cost for each procedure. Although this approach appears to be the most accurate, it is still complex and requires tremendous resources for implementation. As cost basis is the integral component of any accountable care organization, hospital administrators are recognizing the importance of correct and timely cost accounting practices as a prerequisite to the institution financial success [89].