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CMS bundled-payment plan seen driving up costs


An X-ray showing a right hip (left of image) has been replaced, with the ball of this ball-and-socket joint replaced by a metal head set in the femur and the socket replaced by a white plastic cup.

He writes that as “now designed, the mandatory ‘comprehensive care for joint replacement’ payment model could encourage many of the program’s 800 hospitals (and their affiliated orthopedic surgeons) in 75 metro areas to perform more of the pricey procedures on arthritic seniors, not less. If that happens, it will be a perverse twist on the old saying: What the CMS makes on each bundle will be lost on volume.”

“In fact, {the CMS plan} would provide a powerful incentive for hospitals and surgeons who make money on the bundle to do as many as possible. No wonder consultants, physician management firms and medical suppliers are touting their ability to show hospitals how to make money under the bundled-payment program. Many are even willing to share the risk.

“There is an alternative. Hospital systems could offer the ‘watchful waiting’ strategy if the CMS would give them a comprehensive payment to cover the patient’s condition—in this case, severe arthritis of the knee or hip.”

Vast differences in costs in one market



Even in the same geographical area,  hospital prices for routine knee- and hip-replacement surgeries vary vastly.

For instance, show that hip-replacement costs in the  Los Angeles-Long Beach market,  ranged from $17,260 to $46,448, say claims data from the Blue Cross  and Blue Shield Association.

How much will patients react to this long-suppressed information? Will many still favor the sexier academic hospital systems over the cheaper nonteaching hospitals now that new high-deductible plans give insured patients more financial skin in the game?


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