Overcoming Barriers to Success Under Bundled Payments with Data, Communication and Resources

Embarking on bundled payments is fraught with surprises and challenges, but adopting a value-based payment mindset can have far reaching benefits to patients, physicians and hospitals.

C. Lowry Barnes, M.D., Chair of the Department of Orthopedic Surgery at the University of Arkansas for Medical Sciences and a nationally recognized expert in bundled payments, discusses how hospitals can ensure meaningful cost reduction, efficiency and quality. In addition, Dr. Barnes is a paid consultant for Medtronic, a member of Medtronic's Orthopedic Care Pathway advisory team, and helped develop their value-based clinical protocols.

LB: While I was in private practice, St. Vincent Infirmary in Little Rock implemented a successful bundled payment program. The first thing we learned when Medicare showed us our full data is that the data were not what we expected. Our complication rate was higher than we thought – minor things that patients never mentioned. So from the beginning, we had to solve a problem we didn't know existed.

We initiated a robust patient education program, so patients would know what to expect, and made our surgeons available 24/7. We set up a process whereby patients would call us if they had problems. This made a huge difference. We were able to minimize adverse events and improve quality by better engaging patients in their care and giving them more access to their surgeon.

Another area we immediately focused on was decreasing the use of home health, skilled nursing facilities and rehab centers by changing post-op management. Patients do better going home, and this plays out in national and local data with lower readmission rates.

LB: A couple of things come to mind. First, most hospitals don't know their internal or physician data, and doctors don't know their data. So for starters, hospitals need to understand where the issues are before they can identify what can be changed. The same is true of surgeons.

Another challenge is that managing a patient throughout a 90-day episode of care is outside the realm of what hospitals do and most don't have the infrastructure to manage patients like this. Under the CMS bundled payment regime, the episode includes the inpatient stay in an acute-care hospital plus the post-acute care and all related services up to 90 days after hospital discharge.

Hospitals are silos; the chief financial officer holds each area accountable to budget numbers. However, now what matters is how patients do over 90 days – so maybe spending a little more in one department ends up saving money overall when you look at the total episode of care.

LB: I truly believe that in the right bundle everyone wins. Most importantly, the patient wins because they have more touch points with their surgeon, who is engaged in a meaningful way for 90 days. The hospital and surgeon also win if it is approached correctly and there is transparent communication. Doctors are not employees and the relationship between surgeons and hospitals can be challenging. Now they need to work together in a new way to succeed.

Hospitals need to share the rewards with the doctors – gain sharing matters. If doctors drive efficiencies, they need to be compensated. One of the benefits to a hospital when surgeons are engaged in a value-based strategy is that once you get into the mindset of value-based healthcare, every aspect of your practice is affected. A surgeon's whole approach shifts and they start to look to save money and provide value-based care across the board – for commercially insured total joint patients, or seeking better ways to approach anterior cruciate ligament (ACL) injuries, etc.

LB: CJR is particularly challenging because it requires comprehensive, systemic changes. There is an urgency to figure it out fast to avoid penalties.

An entirely new approach is needed. I think engaging the right partner early on can be a game changer to help hospitals swiftly and successfully navigate CJR or bundled payments. There is so much value in hiring an experienced partner who can help an institution facilitate the changes needed to succeed. Most hospitals don't have any experience doing this. A partner can evaluate the hospital and help them understand their data, what resources they have and what they need to deliver a superior product. They also offer an objective, outside perspective, which can be invaluable in bringing hospitals and surgeons together. The reality is that often times hospitals and physicians don't trust each other, and a third-party can help enhance relationships in a productive way.

Another key is CQI – continuous quality improvements. Review your data as a team with surgeons and constantly make changes relative to the findings. And, once you find strategies and processes that work, try to do things consistently.

Medtronic Orthopedic Solutions brings hospitals a holistic view that spans the entire episode of care and can identify areas primed for meaningful cost reductions and outcome improvements, and thereby offer customized solutions. We can evaluate systems and services and provide end-to-end solutions based on departmental alignment, service line infrastructure, organizational goals, and technology requirements. We understand that every hospital system is different and needs a tailored solution for their unique situation and pain points in order to maximize cost savings and improve clinical outcomes.

For more information about Medtronic Orthopedic Solutions, please visit medtronic.com/orthosolutions.