Bundled payment reduces spending, maintains quality in lower extremity joint replacement
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Key takeaways:
- Bundled payment programs reduce spending in lower extremity joint replacement.
- It also maintains quality of care, decreases skilled nursing facility use and increases use of the outpatient surgical setting.
Bundled payment programs effectively reduced episode spending while maintaining quality of care in episodes of lower extremity joint replacement, according to results published in JAMA Health Forum.
“This study offers evidence that site neutral lower extremity joint replacement can be effectively incorporated into a bundled payment program design to bring about additional program savings without apparently affecting quality of care,” Amanda Sutherland, PhD, senior research scientist at Humana, and colleagues wrote.
In a retrospective cross-sectional cohort study of 23,034 episodes of lower extremity joint replacements (6,355 bundled payment episodes and 16,679 control episodes), Sutherland and colleagues evaluated the effect of voluntary bundled payment programs offered by Humana, a national Medicare Advantage insurer, on episode spending and quality of care in 109 different physician practices. The bundled payment program was rolled out from January 2012 to December 2019, emulating a staggered, stepped-wedge study design.
Sutherland and colleagues found a 2.7% decrease in mean spending per surgical episode with voluntary participation in bundled payment programs ($21,964 mean spending per episode in bundled payment program vs. $22,562 per episode in control episodes). Results also showed an association between participation in a bundled payment program with decreased use of skilled nursing facilities (21.3% in bundled payment episodes vs. 25% in control episodes), as well as increased use of the outpatient surgical setting (14.1% in bundled payment episodes vs. 8.4% in control episodes). In addition, researchers did not find any decrease in quality of care with participation in a bundled payment program.
“Furthermore, this analysis offers additional evidence on the experience of bundled payment programs for physician practices, which may differ from hospitals or post-acute care facilities owing to preexisting relationships with patients, as well as revenue associated with professional fees rather than facility fees,” the authors wrote in the study.
Perspective
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This is a typical result of using lower-cost bundled payment programs with high-quality surgeons. The biggest factor separating the successful from the unsuccessful bundled payment programs in an outpatient setting is patient optimization prior to surgery. Furthermore, the group offering the bundled payment needs to be “protected” for readmissions. In a large series (4,500) of patients undergoing outpatient total knee arthroplasty using a bundled payment program with private insurers during the course of 4 years, the most common complication was emergency room visits secondary to anxiety and depression. Infection rates were less than 0.1%.
Clearly, there is huge opportunity for orthopedic groups to perform outpatient TKAs and THAs if strict criteria are adhered to, and additional “stop loss” insurance, which can cost up to 6% of the bundled price, is utilized for readmission expense. Employers are desperate for innovative solutions to improve patient outcomes and reduce their employee health care expenditures, which can be as high as $19,000 per employee per year inclusive of the employee deductible. Orthopedic groups are positioned perfectly to offer appropriately priced bundles with low complication rates, and this trend will continue in the future.
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Sutherland A, et al. JAMA Health Forum. 2023;doi:10.1001/jamahealthforum.2023.1495.
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