Cooperating for better care.

bundled payments

Tag Archives

Tough to track hospital ACO performance indicators

Authors of an article in NEJM Catalyst discuss how hospital-based Accountable Care Organizations (ACOs) are facing big hurdles in tracking performance indicators. They conclude:

“ACOs are a broad-stroke model for changing how health care is delivered. Analysis of {an American Hospital Association} survey results highlights the reasons that a broad tool is challenging: It is difficult to get data at the level of granularity required to resonate with individuals, and primary care physicians have limited control over the wide range of care their patients receive over the course of a year. A more targeted tool, like bundled payments, where one defined episode of care can be studied, measured, and perfected, may be a better answer and could even be used within an ACO to distribute capitated payments.”

To read the article, please hit this link.


Value of value-based care not yet clear


An article in NEJM Catalyst by three  Catalyst for Payment Reform officials finds sharp growth in valued-based medical payments — “about half of all commercial payments to doctors and hospitals now flow through value-oriented methods. However, none of these efforts have demonstrated conclusively that this increase in value-oriented payments has led to better, more affordable care.”

Take bundled payments. The three write:

“Results on bundled or episode-based payment models have been mixed.  {The Center for Medicare and Medicaid Innovation} Bundled Payments for Care Improvement (BPCI) initiatives have produced variable outcomes. However, other initiatives, such as the episode-based payment programs implemented by the Medicaid agencies in Arkansas and Tennessee, have had success in reducing unnecessary utilization and episode costs, as well as improving the quality of care for certain conditions. The Pennsylvania Employees Benefit Trust Fund, working with the Health Care Incentives Improvement Institute (HCI) in a pilot program for total hip and knee replacements, demonstrated decreases in outpatient costs by $3,524 on average, and UnitedHealthcare’s oncology model led to a reduction of cancer episode costs for five medical groups by a combined $33 million.”

The trio go on:

{THE} “transition from fee-for-service accomplishes nothing unless these reforms are working and balance the significant investments that providers, health plans, and purchasers are making to support these changes — investments such as integrated electronic health records or new staff for care support teams. Even patients may feel frustrated if these changes put barriers between patients and their providers or in any way disrupt the doctor-patient relationship.”

To read the NEJM piece, please hit this link.


What’s needed for future bundled-payment success


A piece in JAMA looks at what would be needed in future expansion of bundled-payments programs.

The authors consider such things as extending bundle durations to a year; the role of bundled-payments programs outside the hospital, especially as efforts intensify to reduce readmissions, and ensuring that Accountable Care Organizations and bundles are adequately integrated and coordinated by aligning incentives and sharing information on shared patients.

The authors conclude

“Expansion of bundled payment for episodes of care is under way. The 3 key innovations in the next generation of bundled payment models (extending the duration of the bundles, expanding the accountable entities beyond hospitals, and integrating bundled payments with global budget models within ACOs) could better align episode-based payment with population health and offer a smoother path to global budgets. Testing bundles nested within overarching collective accountability through bundle-ACO integration is particularly promising. There will be ample opportunity to inform bundle design based on findings from voluntary and mandatory Centers for Medicare & Medicaid Services programs and private insurer initiatives. Innovations in bundled payment design could increase their attractiveness to commercial and public payers alike in the pursuit of higher-value care.”

To read the whole article, please hit this link.

5 building blocks for successful bundling

“Baby at Play,” by Thomas Eakins (1876).

Win Whitcomb, M.D., writing in Hospitals & Health Networks, presents what he calls five “building blocks of success” in bundled payments. He is chief medical officer at Remedy Partners, in Darien, Conn.; an assistant professor of medicine at the University of Massachusetts Medical School,  and a founder and a past president of the Society of Hospital Medicine.

Here are his building blocks, in abbreviated form:

1. Data

“For the first time, we are able to view cost data over the entire span of an episode, including acute care and the post-acute recovery period… Administrators and clinicians can identify variation in costs or quality, analyze processes underlying the variation and then implement new processes designed to mitigate such variation.”

“In addition, information systems are emerging that provide access to a patient’s location and clinical status over the entire course of an episode (something most electronic health records cannot do).”

2. Incentives

“Bundled payments disrupt the fee-for-service incentive to increase utilization. Medicare’s Bundled Payments for Care Improvement program enables hospitals, physician groups, post-acute facilities and home health agencies to bear first-dollar risk for an episode. The risk-bearing entity’s monetary reward for lowering costs can be invested in human resources (e.g., patient navigators) and technological resources (e.g., performance reporting and patient tracking software) that help the program succeed.”

“Gainsharing, most often offered to physicians, but also possible with hospitals, nursing facilities and other providers, can ensure that the risk-bearing entity and physicians or other providers have the same goal. Gainsharing in these programs can reward either internal cost savings (derived from, for example, bulk purchasing of implantable devices) or the net payment reconciliation amount (derived from, for example, lower post-acute facility utilization or fewer readmissions).”

3. Post-acute performance networks

“Successful risk-bearing entities build networks of post-acute facilities and home health agencies to ensure efficient and high-quality care for patients after an episode. Inclusion in such a network can be based on costs, readmissions or quality — such as star ratings, the availability of on-site providers and disease specialty programs. ”

4. Care redesign

“CMS promotes care redesign, or improving quality while cutting costs, as the defining feature of bundled payments. Successful organizations have redesigned care for specific bundles like joint replacement; others have redesigned care in an across-the-board fashion agnostic to bundle type.”

“Examples of across-the-board care redesign include deploying an early mobility program, using a decision-support tool to determine an optimal post-discharge location, applying rules to identify candidates for palliative care, having a structured goals-of-care conversation or using protocols to avoid unnecessary acute care transfers of skilled nursing patients. ”

5. Pooling knowledge

“BPCI  supports the role of a ‘convener,’ working with ‘episode initiators’ (providers) to deploy the program. Conveners can provide crucial support for healthcare organizations that aren’t able to go it alone because of a shortage of resources or expertise in data analytics, information technology, care redesign and, in some cases, the assumption of a portion of financial risk.”

To read more, please hit this link.

Cleveland Clinic, Humana emphasize data partnerships


The main building of the Cleveland Clinic.

FierceHealthcare reports:

“During a discussion at the SAS Health Analytics Virtual Forum, leaders with the Cleveland Clinic and Humana emphasized the importance of data partnerships as the healthcare industry continues to transition toward innovative payment models. New initiatives—like bundled payments for hip and knee replacements—have forced providers to re-engineer their approach to care, a transformation that relies on the ability to analyze and interpret patient data to provide more personalized care.

“Previous payment models created ‘adversarial relationships’ between payers and providers, said Chris Donovan, executive director of enterprise information management and analytics at the Cleveland Clinic. Now, those same companies take on an equal share of risk, which has fostered new data-driven partnerships.

“I think we’re really just scratching the surface of what we can do together,” he said, adding that government can play a role in fostering those relationships by building on programs that continue to emphasize value over volume, and by establishing standards for data quality.

‘There are a lot of opportunities for government,’ he said. ‘The experiments they have done show they can move the needle.”’

“Robert Sahadevan, enterprise vice president of consumer marketing and data analytics at Humana, added that analytics has helped the payer drill down into subpopulations and demographics to better understand how patients interact with the healthcare system, and then build personalized interventions.”

To read more, please hit this link.

Better benchmark data accelerates move to payment for episodes of care


Robin Gelburd asks and answers in FierceHealth Payer why it has taken payment for episodes of care (aka bundled payments) so long to catch on and why it is  catching on  now. Among her remarks:

 “One reason has been a lack of sufficiently robust benchmark data and sophisticated analytics to determine how much a typical episode of a given procedure or condition currently costs, and how much it could cost if it were optimized by eliminating duplicative services or preventing potentially avoidable complications. {But} such tools are now becoming available….”

“To provide a clear view of what the market is currently paying for episodes, benchmark data about per-episode healthcare costs require several characteristics. They must:

  • “Include both billed charges and allowed amounts
  • “Be available on a national scale or specific to a geographic area
  • “Be adjusted for risk factors and co-morbidities”

“Benchmark data with those characteristics are now reaching the market. Such data make it possible for payers contemplating a move toward value-based reimbursement and conducting related pricing studies to evaluate episodes. And such data also can inform negotiations between plans and providers, thereby helping to build and maintain networks.”

“W}hen the data includes both the total episode pricing and separate line items for the individual procedures that make up the episode, such information can allow providers to compare their own performance and pricing at the procedure level to that of the market in their region. Thus, episodes can benefit providers, helping them to improve budgeting and achieve efficiencies, as well as better negotiate with payers.”

“Seeing how individual professionals and facilities fit into the episode as a whole may stimulate the formation of partnerships and better coordination of care. Benchmark data can also help consultants advise payers and healthcare systems.”

“In addition to episode benchmark data, episode analytics are available that can enable payers to analyze their own episodes. Organizations can examine their episodes to see, for example, when and why actual episode costs exceeded expected costs, and which specific providers were associated with higher or lower levels of potentially avoidable complications. That information can aid in building networks, educating providers, improving the quality and efficiency of care and budgeting.”

“By using benchmark data together with episode analytics, organizations can compare their own episode results to those of the larger marketplace and identify areas of both improvement and opportunity.”

To read more, please hit this link.


3 healthcare changes that can outlast the ACA

Whatever the Republican efforts to kill the Affordable Care Act, some healthcare changes encouraged by the ACA that have particularly developed over the past few years will almost certainly continue, predicts The New York Times.

Three of them are:

  • Early intervention through much expanded community-health efforts that address the social determinants of health.
  • Alternative payment models, such as bundled payments, in a continued move away from fee for service and to fee for value and outcomes.
  • More emphasis on care coordination and team-based care, including better coordination between clinicians and outside social services.

To read The New York Times piece, please hit this link.

Study: Bundled-payment system for joint replacements cut cost by 20%


A study in the Journal of the American Medical Association found that bundled payments for joint replacements  can cut costs by up to 20.8 percent without hurting patients’ medical outcomes.

Researchers used Medicare claims to analyze 3,924 lower-extremity-joint replacement procedures at San Antonio-based Baptist Health System between July 2008 and June 2015. The patients took part in CMS’s voluntary Acute Care Episodes and Bundled Payments for Care Improvement demonstration projects.Among the findings:

  • The system achieved on average $5,577 in savings per joint-replacement episode.
  • During a seven-year period, Baptist Health System cut average Medicare costs by 20.8 percent for 3,738 joint replacements without complications.
  • For 204 episodes with complications, Medicare episode outlays fell an average 13.8 percent.
  • Episodes that required prolonged lengths of stay fell 67 percent.
  • Study researchers projected that if every hospital used the Baptist bundled-payment model, Medicare could save $2 billion a year.

For the study, researchers used Medicare claims to analyze 3,924 lower-extremity-joint-replacement procedures at San Antonio-based Baptist Health System between July 2008 and June 2015. The patients participated in CMS’s voluntary Acute Care Episodes and Bundled Payments for Care Improvement demonstration projects.

To read the JAMA article, please hit this link.

Trump’s HHS pick dislikes Medicare bundles program



Kaiser Health News

A recent change in how Medicare pays for joint replacements is saving millions of dollars annually — and could save billions — without impacting patient care, a new study has found. But the man whom Donald Trump has picked to be the secretary of  the Department of Health and Human Services has vocally opposed the new mandatory payment program and is likely to revoke it.

Under the new program, Medicare effectively agrees to pay hospitals a set fee — a bundled payment — for all care related to hip- or knee-replacement surgery, from the time of the surgery until 90 days after. Traditionally hospitals collect payments for many components of care and rehabilitation individually.

Tom Price, M.D., the president elect’s HHS nominee, a congressman from Georgia and a very affluent orthopedic surgeon, has actively opposed the idea of mandating bundled payments for these orthopedic operations, calling it “experimenting with Americans’ health,” in a letter to the Medicare agency just last September. In addition, the agency which designed and implemented the experiment, the Center for Medicare and Medicaid Innovation, was created by the Affordable Care Act to devise new methods for encouraging cost-effective care. It will disappear if the act is repealed, as President-elect Trump has promised to do.

The study appeared Jan. 3 in the Journal of the American Medical Association. Though one of its authors is Ezekiel Emanuel, M.D., a professor at the University of Pennsylvania who helped design the ACA, the research relies on Medicare claims data from 2008 through mid-2015, long before the presidential election.

Starting in April 2016, CMS required around 800 hospitals in 67 cities to use the bundled payment model for joint replacements and 90 days of care after the surgery as part of the Comprehensive Care for Joint Replacement program. The program had previously been road-tested on a smaller number of hospitals on a voluntary basis, which formed the focus of the research.

The study found that hospitals saved an average of 8 percent under the program, and some saved much more. Price has been skeptical that bundled payments did save money, but the researchers estimate that if every hospital used this model, it would save Medicare $2 billion annually.

The bundled payment program works like this: For some specific kinds of medical procedures, including joint replacements or some heart surgeries, the Centers for Medicare & Medicaid Services will add up the costs for the entire episode, from the hospital stay and medical supplies to the rehabilitation afterwards. If the total costs are below a target set by CMS, the hospital gets to keep the savings. If not, the hospital has to pay Medicare the difference. It’s supposed to incentivize more efficient spending and better care coordination between providers, so they can lower costs.

In practice, it seems to be working. Baptist Health System, a network of five hospitals in San Antonio, saved an average of $5,577 on each joint replacement without sacrificing the quality of care, according to the study. Baptist was an early adopter of bundled payments; it began experimenting with them in 2008. Over seven years, the hospital system has cut Medicare’s costs on knee replacements by almost 21 percent.

The savings came without impacting quality. Patients at Baptist Health System were just as likely to be readmitted to the hospital or end up in the emergency room as patients nationally. There was some indication that quality of care may be better, fewer patients under bundled payments had long, extended hospital stays.

In Price’s letter from September, he said that Medicare had exceeded its powers in imposing such bundled payments, which he said took decisions out of the hands of doctors and patients.

That doesn’t seem to be the case, according to Amol Navathe, M.D., an assistant professor of medicine and health policy at the University of Pennsylvania, and one of the authors of the JAMA study. Instead, Navathe and his colleagues suggest that the bundled payments actually fostered greater collaboration between surgeons, administrators and patients because programs could only succeed in saving money if physicians were engaged in creating standardized pathways for care.

For example, the Baptist Health System saved about 30 percent on implant costs, around $2,000 on each artificial joint, by using the least expensive medically equivalent implants as determined by the hospitals’ surgeons.

Usually, physicians are prevented from benefitting when hospitals save money because of anti-kickback laws. Waivers under bundled-payment models mean that surgeons can put in the time to find the best, most cost-effective implants, and share in some of that savings.

“It takes that extra level of effort and coordination, and proactively communicate with [patients],” Navathe said. “Preplanning, setting of expectations and communicating up-front is resource intensive, when they have the incentive to do that they were willing to expend the extra resources to make that happen.”

When bundles included care after a patient’s hospital stay, spending on rehabilitation went down 54 percent. That’s because hospitals took the time to match patients to the right level of care, Navathe said.

Patients who didn’t need to stay in a nursing home or rehab center were set up with home health care or physical therapy.

Price has objected to CMS making bundled payments mandatory, calling it an instance of federal overreach. But bundled payments only work if everyone has to participate, according to Darshak Sanghavi, M.D., the former director of prevention and population health at the Center for Medicare and Medicaid Innovation.

If hospitals can choose whether or not to participate, only the ones that are already delivering care efficiently –and coming in under CMS’s cost target — will use bundles and Medicare will constantly be paying out bonuses. The system needs to be mandatory, Sanghavi said, to pull in less efficient hospitals and give them incentive to change.

“Stopping the programs for ideological reasons I think impedes innovation in a way that is going to consign us to having really, really high costs of care that’s going to continue in the future,” Sanghavi said.

Bundled payments aren’t just for hip and knee replacements. On Dec. 20, CMS announced it would expand mandatory bundled payments to treatments for heart attacks, bypass surgery and cardiac rehab beginning in July 2017. In its waning days, the Obama administration is effectively throwing down the gauntlet to the incoming administration on bundled payments, one of its signature reforms.

How physicians should change thinking to deal with bundled payments

For bundled-payment systems, physicians need to change the way they think, says an article in NEJM Catalyst. Among the recommendations:

“Assume leadership of the ‘next site of care’ decision during hospital discharge planning.”

“Physicians can no longer default to the discharge team — case managers, physical therapists, nurses, and social workers — when deciding on the next site of care. Instead, physicians will be called upon to be the team leader as next site of care planning is carried out. This involves understanding the patient needs that determine the most appropriate next site of care and grasping the differing capabilities of home health agencies (HHAs), skilled nursing facilities (SNFs), inpatient rehabilitation facilities (IRFs), and long-term acute care hospitals (LTACs).”

“Ensure that patients are mobilized early and often.”

”Regardless of a patient’s principle diagnosis and co-morbid illnesses, functional status has a major impact on recovery. During hospitalization, patients remain in bed too often, as the staff focuses on delivering medications and other treatments. The deleterious effects of immobility are well documented. Bundled payment models provide new incentives to avoid keeping patients in bed needlessly, as immobility and deconditioning increases the chances for facility-based care after discharge.”

”Ensure that patients’ goals of care are elicited, and when appropriate, palliative or hospice care is delivered.”

”Physicians must have the conversational skills to draw out patients’ goals of care, especially where advanced or severe chronic illness is involved. Patients are often relieved when their physician brings up the matter of care goals. In some cases, onerous interventions like hospitalization, emergency room visits, or procedures may be avoided in keeping with a patient’s wishes.”

To read the whole piece, please hit this link.

Page 1 of 4123...Last

Contact Info

(617) 230-4965

Wellesley, Mass