Hospitals are finding success with the CMS effort to promote value-based care through bundled payments, and orthopedic procedures are proving especially well-suited to the program. But standardized protocols do not have to be part of the strategy.
The Bundled Payments for Care Improvement (BPCI) Advanced program from CMS works well with joint replacements because the procedures are selected and scheduled ahead of time, unlike some other surgeries, says Stephen Barry Murphy, MD, an orthopedic surgeon at New England Baptist Hospital (NEBH) in Boston and associate professor of orthopedic surgery at Tufts University School of Medicine.
That allows the team to assess carefully and adjust for any risk factors, Murphy says.
With physician-led bundles, the doctor has the potential for both the increased and decreased revenue depending on the outcome, which is a strong motivator for quality care, Murphy says.
His hospital has found that BPCI results are strongest when physicians act on that incentive, rather than following narrowly defined protocols for orthopedic procedures.
They’ve seen as high as 18% increase in revenue per episode, with 10% on average.
“The nice thing about the program is that we don’t have formal protocols and put people in little pens of behavior. The knee-jerk approach to improving care is to standardize care, and I think generally that is a mistake,” Murphy says.
“People confuse standardization with improvement, when all you really want is the net result and how you get there should be open. Making things the same doesn’t necessarily improve anything, and can make it worse.”
Orthopedic surgeons at Murphy’s hospital use a variety of implants, anti-coagulation protocols, and other variables.
Surgeons typically resist standardized protocols, he says, especially when they are handed down by people who don’t care for patients.
“Some of these programs get so specific that they tell you what kind of dressing to use and what suture to use for closing the wound. I think that’s really the wrong approach,” Murphy says.
“We just incentivize people to want to do better and they communicate with the colleagues to find the things that work best for them and their practice. People tend to improve pretty rapidly, which leads to great savings for Medicare and the providers.”
Upside and Downside
The BPCI Advanced bundled payment program covers services within a 90-day clinical episode, with a clinical episode defined as beginning with an inpatient admission for an inpatient procedure or the start of the outpatient procedure, and continues for 90 days after discharge or the procedure.
The program offers the chance for increased revenue (the “upside” of the program) and limits on how much money can be lost if goals are not met (the “downside”).
BPCI Advanced also is considered an Advanced Alternative Payment Model (APM) under the Quality Payment Program, established by the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015.
Physicians can earn MACRA’s Advanced APM incentive payments because they take on financial risk with BPCI Advanced.
Healthcare providers can choose to participate in up to 29 inpatient clinical episodes and three outpatient clinical episodes.
(More information on BPCI Advanced is available on the CMS website at: https://bit.ly/2mcB3me.)
Hospital or Physician Leads
The potential benefits can be highly motivating, but the BPCI program still can be challenging. The clinical episodes can be led by either the hospital or the physician, and Murphy notes that there can be some political tension when one disagrees with the other about the best course of treatment under BPCI.
The improvements also are harder to come by as the program continues, he says.
“At the beginning there are the things that are easy to spot and easy to address, like utilization that could be decreased, but then upstream you have to get into more complex matters that are harder to address,” Murphy says.
“These are things like better pre-op engagement, communicating better with the patient, assessing the home situation in advance and looking at how to deal with that after surgery, [and] improving communication channels postoperatively so you can deal with problems while they’re small and not waiting for them to get bigger.”
BPCI is very data-driven, and specialists often have little experience looking at data in the way Medicare releases it, notes Dave Terry, chief executive officer with Archway Health, a company in Watertown, MA, that helps hospitals with bundled payments. The average cost of a joint replacement across a 90-day episode might be $25,000, but there is about a 40% variation, Terry says.
“When you sit down with surgeons to talk about this, they don’t understand that they’re managing a $25,000 procedure with such variation or where all the dollars are going. They also don’t have a good understanding of how options available to them, the choices they make for their patients, can change that number so much,” Terry adds.
“In fee-for-service there is no incentive to understand it at that level, and they have not had the data historically to look at it that way.”
BPCI Lowers Costs
Murphy and colleagues recently analyzed all primary elective total hip arthroplasties (THAs) that found significant savings under BPCI.
The procedures were performed in the United States (except Maryland) between January 2013 and March 2016 on patients insured by Medicare, totaling more than $7.1 billion in healthcare costs.
Episodes were grouped into hospital-initiated BPCI (43,922), physician group practice (PGP)-initiated BPCI (44,662), and THA performed outside of BPCI (284,002).
When controlling for age, sex, race, background trend, geographic variation in spending, and total comorbidities, initiation of BPCI was associated with a 4.44% cost decrease for all participants while odds ratios (OR) for 90-day mortality and readmission were unchanged in elective, DRG 470 THA episodes, according to a paper by Murphy and colleagues that will be published soon.
“This reflected an observed $1.24k decrease from the base price of $18.8k per episode over the time of study for BPCI participants. When controlling for the same variables, PGP groups achieved a 4.81% decrease in cost after enrolling in BPCI,” the paper says.
“Hospital groups achieved a 4.04% decrease in cost. The decrease in PGP cost was significantly greater than hospital cost. This reflected an observed decrease of $1.33k from a baseline of $17.84k for BPCI episodes run by PGPs, and an observed decrease of $1.14k from a baseline of $19.8k for BPCI episodes run by hospitals.”
The OR for 90-day mortality and 90-day readmission did not change after BPCI for PGP or hospital BPCI programs, the researchers found.
“Even when controlling for lowering costs in traditional fee-for-service care, the BPCI initiative has led to further cost reduction without an increased incidence in readmission or mortality. Physician-initiated bundled episodes had a significantly greater decrease in cost compared to hospital-initiated bundled episodes,” they concluded.
“There was no change in either group with respect to 90-day readmission or mortality. BPCI programs do not lead to patient selection in terms of age or lower Elixhauser comorbidity index. Further, this study demonstrated that physicians-at-risk, as opposed to hospitals, more effectively reduce costs without an increase in patient risk and may be a more logical group in which to entrust further healthcare reform.”
- Stephen Barry Murphy, MD, New England Baptist Hospital, Boston; Associate Professor of Orthopedic Surgery, Tufts University School of Medicine. Phone: (617) 232-3040.
- Dave Terry, Chief Executive Officer, Archway Health, Watertown, MA. Phone: (617) 209-7985.