Physician group practices in bundled payment models associated with surgical cost savings
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Results showed physician group practices that participate in a bundled payment model have associated cost savings for surgical but not medical episodes, while participating hospitals have savings for both surgical and medical episodes.
Joshua M. Liao, MD, MSc, and colleagues performed a cohort study of 1,288,781 Medicare beneficiaries who received care for any of the 10 highest-volume episodes (five medical and five surgical) included in the Bundled Payments for Care Improvement (BPCI) initiative at a physician group practice (PGP) or hospital from Jan. 1, 2020, to May 31, 2022.
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Researchers analyzed 696,710 patients who received care through 379 hospitals that participated in the BPCI initiative and 1,441 non-BPCI hospitals. They also analyzed data for 592,071 patients who received care from 6,405 physicians from PGPs that participated in the BPCI initiative and 24,758 physicians from non-BPCI PGPs. Outcome measures included 90-day total episode spending, readmissions and mortality, according to the study.
For PGPs, participation in the BPCI initiative was associated with a $1,368 reduction in episode spending for surgical care; however, researchers deemed the $101 reduction in episode spending for medical care was not significant. For hospitals, participation in the BPCI initiative was associated with a $1,010 reduction in episode spending for surgical care and a $763 reduction in episode spending for medical care.
“The findings of this cohort study suggest that policy makers should consider the comparative performance of participant type when designing and evaluating future bundled payment models,” the researchers wrote in the study.
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This important research highlights the importance of a highly engaged physician in determining the success of any value-based care initiative. In this work, we saw that (almost universally) surgical care outcomes improved (as seen in lower readmission rates and 90-day mortality), and costs were also markedly improved —reflecting the degree to which improved care coordination can impact patients through both sides of the value equation.
However, it is important to note that the greatest changes occurred in the patient population under the care of the BPCI-enrolled PGPs — in other words, the patients for which physicians had meaningful financial “skin in the game” to help optimize care pathways. When physicians and hospitals were incentivized together to find ways to improve care, the greatest gains were shared by all parties: the patients, the health care teams and the payers.
Unfortunately, these bundled payment initiatives, like BPCI, have been largely relegated to the history books in favor of programs with less opportunity for the physician leaders of the care team, such as Comprehensive Care for Joint Replacement model and BPCI-Advanced. Many participants who had the option have left both of those programs due to lack of meaningful financial opportunity. Future value-based programs will need to better incentivize all the parties in the health care system to continue to reap impressive gains, as seen in this study.
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