Experience with designing and implementing a bundled payment program for total hip replacement

Winthrop F. Whitcomb*, Tara Lagu, Robert J. Krushell, Andrew P. Lehman, Jordan Greenbaum, Joan McGirr, Penelope S. Pekow, Stephanie Calcasola, Evan Benjamin, Janice Mayforth, Peter K. Lindenauer

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

31 Scopus citations

Abstract

Background: Bundled payments, also known as episode-based payments, are intended to contain health care costs and promote quality. In 2011 a bundled payment pilot program for total hip replacement was implemented by an integrated health care delivery system in conjunction with a commercial health plan subsidiary. In July 2015 the Centers for Medicare & Medicaid Services (CMS) proposed the Comprehensive Care for Joint Replacement Model to test bundled payment for hip and knee replacement. Methods: Stakeholders were identified and a structure for program development and implementation was created. An Oversight Committee provided governance over a Clinical Model Subgroup and a Financial Model Subgroup. Results: The pilot program included (1) a clinical model of care encompassing the period from the preoperative evaluation through the third postoperative visit, (2) a pricing model, (3) a program to share savings, and (4) a patient engagement and expectation strategy. Compared to 32 historical controls - patients treated before bundle implementation - 45 post-bundle-implementation patients with total hip replacement had a similar length of hospital stay (3.0 versus 3.4 days, p = .24), higher rates of discharge to home or home with services than to a rehabilitation facility (87% versus 63%), similar adjusted median total payments ($22,272 versus $22,567, p = .43), and lower median posthospital payments ($704 versus $1,121, p = .002), and were more likely to receive guideline-consistent care (99% versus 95%, p = .05). Discussion: The bundled payment pilot program was associated with similar total costs, decreased posthospital costs, fewer discharges to rehabilitation facilities, and improved quality. Successful implementation of the program hinged on buy-in from stakeholders and close collaboration between stakeholders and the clinical and financial teams.

Original languageEnglish (US)
Pages (from-to)406-413
Number of pages8
JournalJoint Commission Journal on Quality and Patient Safety
Volume41
Issue number9
DOIs
StatePublished - Sep 2015

Funding

Dr. Lagu is supported by the National Heart, Lung, and Blood Institute of the National Institutes of Health under Award Number K01HL114745 . Dr. Lagu has received consulting fees from The Island Peer Review Organization, under contract to CMS, for her work on development of episodes of care for Centers for Medicare & Medicaid payment purposes. Dr. Whitcomb reports stock options with Remedy Partners. The authors thank Katherine Dempsey and Anu Joshi for their help with formatting and proofreading an earlier version of this manuscript.

ASJC Scopus subject areas

  • Leadership and Management

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