When administrator Dr. Geoffrey Cole found out last year that his hospital would be participating in Medicare’s mandatory bundled-payment program for total hip and knee replacement procedures, he started meeting with orthopedic surgeons. Cole initially was skeptical about the Comprehensive Care for Joint Replacement, or CJR, program the CMS Innovation Center launched in April 2016. “We would not have chosen to be in this program unless it was mandated, but we accepted it and dealt with it,” said Cole, executive director of operations at Piedmont Athens (Ga.) Regional Medical Center. But he quickly engaged physicians in the process of redesigning and improving the patient-care process—exactly what experts say is key to the success of bundling and other value-based payment initiatives. Close ties between payment and clinical care are making it critical for physicians to be centrally involved in these efforts. “One of the nice things about bundled payment is it can provide a direct financial reward for physicians to work hard on aspects of care that can be difficult and require coordination with the hospital,” said Dr. Amol Navathe, an assistant professor of health policy and medicine at the University of Pennsylvania. “It’s important that physicians be engaged and bought in.”
In a study published in February in JAMA Internal Medicine, Navathe and his co-authors found that voluntary Medicare bundled-payment programs for joint replacements at Baptist Health System in San Antonio resulted in a 21% drop in average Medicare episode spending between 2008 and 2015. Readmissions, emergency department visits, and cases with prolonged lengths of stay all declined significantly. Particularly notable was that costs for joint implant devices fell 29% as a result of surgeons collaborating with the hospital to negotiate lower prices. In addition, costs for post-surgical stays in rehabilitation facilities and skilled-nursing facilities dropped by 49% and 33%, respectively. That was another result of physicians focusing on fine-tuning the entire episode of care. While many hospitals and physician groups are working on improving care outside the CMS’ bundled-payment programs, the financial incentive of meeting a fixed cost target for an entire episode of care has spurred a stronger collaboration between these often-competing players. That’s true even for hospitals and medical groups that have not established financial arrangements in which doctors get bonuses for meeting cost targets, known as gain-sharing.
Read more at Modern Healthcare.