Medicare bundled payment model reduced joint replacement costs without change in quality of care

According to researched published online in JAMA Internal Medicine, bundled payment models can decrease Medicare and health system costs for joint replacement without decreasing quality of care.

The study evaluated costs and quality of care for hip and knee replacements performed between 2008 and 2015 at the five-hospital Baptist Health System network in San Antonio. According to a press release, the study combined hospital costs and Medicare claims data to determine factors leading to joint replacement cost savings.

“This study outlines how one bundling participant achieved hospital and post-hospital discharge savings while reducing Medicare payments — all without compromising quality,” lead author Amol S. Navathe, MD, PhD, an assistant professor in the Department of Medical Ethics and Health Policy at the Perelman School of Medicine at the University of Pennsylvania, and a member of Penn’s Center for Health Incentives and Behavioral Economics, said in the release. “The results offer guidance for both providers and a new administration considering decisions that will impact the health of patients and communities nationwide. Policymakers should take note of the fact the results suggest hospitals may directly benefit in bundled payment models.”

Results demonstrated a 20.8% decrease per patient in the average cost of joint replacement plus 30-day post-acute care from $26,785 in 2008 to $21,208 in 2015, according to the release.

The decrease in the costs were reportedly due to a 29% decrease in the average per case cost for an artificial joint and a 27% decrease in the average per case spending for post-acute care, after post-acute care was added to the bundles. The Baptist Health System also reportedly saw a 67% decline in extended hospital stays. However, the severity of patient conditions did not change.

“On the whole, the health system’s rapid achievement of savings through changes in a few key areas suggests that hospitals in the long run will be able to reduce costs in many areas, not only internally but through greater care coordination with external facilities,” Navathe said, in the release. “There are still more savings on the table.”

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