Improving Musculoskeletal Costs of Care Using a Virtual Integrated Practice Unit: A Claims-Based Analysis

Document Type

Article

Publication Date

7-1-2026

Publication Title

NEJM Catal Innov Care Deliv

Keywords

Humans, Musculoskeletal Diseases, Michigan, United States, Insurance Claim Review, Female, Male, Health Care Costs, COVID-19, Delivery of Health Care, Integrated, Aged, Value-Based Health Care, Physical Therapy Modalities

Abstract

Musculoskeletal (MSK) conditions are among the leading drivers of health care spending for risk-bearing organizations, including health insurance plans and self-funded employers. Costs are often amplified in Medicare Advantage populations owing to the high prevalence of MSK conditions and overutilization of expensive health care services. At Health Alliance Plan, a Michigan-based regional health insurance plan and subsidiary of Henry Ford Health, MSK costs increased following the coronavirus 2019 pandemic despite already being a top cost-of-care driver. This case study describes the implementation of a virtual integrated practice unit (V-IPU) designed to reduce potentially avoidable MSK services utilization while improving member engagement and health outcomes. Outcomes were assessed using medical claims and patient-reported outcome measures (PROMs), with claims analysis performed by a third-party actuary firm. The program started in September 2024, and members were enrolled on a rolling basis after that. Claims were evaluated over a 12-month pre-post time frame: the 6 months prior to V-IPU enrollment compared with the 6 months after enrollment. For control cohorts (those undergoing traditional MSK clinical care or physical therapy care), the claims analysis consisted of the 6 months prior to clinical evaluation and the 6 subsequent months. Among members who enrolled in the V-IPU, baseline MSK condition-related spending decreased from US$347.12 per member per month (PMPM) to US$149.40 PMPM. In contrast, cost-matched control members receiving traditional MSK clinical care experienced higher spending following index evaluation (from US$346.96 to US$995.30 PMPM), and members evaluated for physical therapy showed a larger increase (from US$347.04 to US$1458.97 PMPM). Annualized gross and net cost savings attributed to the V-IPU were US$10,152.69 and US$8652.69, respectively, per member compared with traditional clinical care; and, when compared with physical therapy, the gross and net savings with V-IPU were US$15,715.74 and US$14,215.74, respectively. From a clinical perspective, the V-IPU cohort demonstrated meaningful improvements in PROMs for physical, mental, and pain health, along with an average program satisfaction rating of 9.2 (range 1-10); such PROMs and patient satisfaction data were not collected for the traditional care cohorts. These findings suggest that a multidisciplinary physician-led V-IPU model may reduce MSK condition-related expenditures while improving PROMs, offering a clinically oriented alternative to administrative cost-containment strategies.

Medical Subject Headings

Humans; Musculoskeletal Diseases; Michigan; United States; Insurance Claim Review; Female; Male; Health Care Costs; COVID-19; Delivery of Health Care, Integrated; Aged; Value-Based Health Care; Physical Therapy Modalities

PubMed ID

42418626

Volume

7

Issue

7

First Page

250448

Last Page

250448

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