Bundled-payment joint replacement programs winning over surgeons

When administrator Dr. Geoffrey Cole found out last year that his hospital would be participating in Medicare's mandatory bundled-payment program for total hip and knee replacement procedures, he started meeting with orthopedic surgeons.

Cole initially was skeptical about the Comprehensive Care for Joint Replacement, or CJR, program the CMS Innovation Center launched in April 2016. "We would not have chosen to be in this program unless it was mandated, but we accepted it and dealt with it," said Cole, executive director of operations at Piedmont Athens (Ga.) Regional Medical Center.

But he quickly engaged physicians in the process of redesigning and improving the patient-care process—exactly what experts say is key to the success of bundling and other value-based payment initiatives. Close ties between payment and clinical care are making it critical for physicians to be centrally involved in these efforts.

"One of the nice things about bundled payment is it can provide a direct financial reward for physicians to work hard on aspects of care that can be difficult and require coordination with the hospital," said Dr. Amol Navathe, an assistant professor of health policy and medicine at the University of Pennsylvania. "It's important that physicians be engaged and bought in."

In a study published in February in JAMA Internal Medicine, Navathe and his co-authors found that voluntary Medicare bundled-payment programs for joint replacements at Baptist Health System in San Antonio resulted in a 21% drop in average Medicare episode spending between 2008 and 2015. Readmissions, emergency department visits, and cases with prolonged lengths of stay all declined significantly.

Particularly notable was that costs for joint implant devices fell 29% as a result of surgeons collaborating with the hospital to negotiate lower prices. In addition, costs for post-surgical stays in rehabilitation facilities and skilled-nursing facilities dropped by 49% and 33%, respectively. That was another result of physicians focusing on fine-tuning the entire episode of care.

While many hospitals and physician groups are working on improving care outside the CMS' bundled-payment programs, the financial incentive of meeting a fixed cost target for an entire episode of care has spurred a stronger collaboration between these often-competing players. That's true even for hospitals and medical groups that have not established financial arrangements in which doctors get bonuses for meeting cost targets, known as gain-sharing.

Before, "the competing interests had no incentive to sit at the table and take out inefficiencies," said Dr. Henry Sullivant, vice president and chief medical officer for Memphis, Tenn.-based Baptist Memorial Health Care Corp. "The wonderful thing about this type of program is it puts us all at the table together solving issues collaboratively."

Baptist Memorial has hospitals participating in both the CMS' voluntary and mandatory programs; the voluntary program is called Bundled Payments for Care Improvement, or BPCI. It negotiated a gain-sharing deal with two independent groups of orthopedic surgeons.

Now, however, some experts fear HHS' recent decision to shrink the CJR program to 34 from 67 markets and shelve plans for two mandatory bundled-payment programs for cardiac care may slow such collaborations.

They say the financial rewards to physicians for reducing costs and improving quality for entire episodes of care—which can amount to a 50% bonus in the BPCI program—are strong motivators to get them engaged. They hope that HHS and the CMS at least maintain and expand voluntary bundled-payment initiatives.

"I do worry if we dial back these programs and don't replace them with additional programs, we could lose a lot of momentum we've never seen before in transforming care," Navathe said.

But Navathe and others say BPCI and other voluntary value-based payment programs can continue to support those transformations. Indeed, some hospitals and physician groups say the BPCI program's quality measurements are more useful for providers than what the CJR program offers, though they argue that BPCI's financial incentive model needs to be revised to better reward low-cost providers.

"These programs are forcing physicians to look holistically at the patient for an entire episode," said Andy Tessier, director of business development for the Signature Medical Group, which consults with about 1,200 orthopedic surgeons around the country participating in the BPCI demo program. "What I'm hearing is they are making these specialists better doctors."

At Piedmont Athens, Cole and surgeons from two local orthopedic groups started by studying their utilization and cost data. They quickly noticed that about half the joint replacement patients in the three prior years went to rehabilitation or skilled-nursing facilities after surgery. That was expensive and did not necessarily produce the best outcomes. Plus, it could hamper the hospital's ability to provide the procedure and care for up to 90 days afterward for Medicare's bundled target price.

So the surgeons began coaching their patients to expect to go directly home after surgery. They worked hard on minimizing referrals to rehab and SNFs and sending patients home, with physical therapy and other home health services as needed. Cole and the surgeons also decided Piedmont Athens needed to appoint a nurse to serve as CJR coordinator to work with patients and their families before, during and after the procedure.

As a result, after the bundled-payment program started April 1, 2016, use of post-acute facilities for Piedmont Athens' joint replacement patients almost immediately plummeted from about 50% of cases to about 10%.

The surgeons liked that patient outcomes were better and costs were lower under the new program, Cole said. The hospital recently received a $107,000 bonus from Medicare for meeting the CJR program's cost and quality targets. It has decided to continue in the bundled-payment program next year, even though HHS is proposing to make it voluntary for hospitals in the Athens market.

Cole said the surgeons have been engaged and cooperative, and they're bringing more of their joint replacement procedures to Piedmont Athens since the bundled-payment program started. "Two years ago I would have said no more (mandatory) bundles," he said. "I might say yes to that now."

Like him, administrators and physicians involved in the CMS' mandatory and voluntary bundled-payment initiatives at other hospitals say they're impressed with how the programs have engaged physicians to produce lower costs and better outcomes for patients. They see potential for achieving similar results through bundled payment in other clinical areas.

Indeed, based on its success with the joint replacement bundles, Baptist Health in San Antonio expanded to offer bundles for colorectal surgery, acute myocardial infarction, and several other procedures and conditions.

"This has expanded to other clinical areas, and we've continued to develop care paths," said Monica Deadwiler, senior director of financial product innovation at the Cleveland Clinic, whose hospitals are participating in the BPCI program for joint replacements.

She believes, however, that bundled payment is best suited for procedural care, where there is a defined beginning and end to the episode, than for chronic disease management.

Selecting the right physician leaders is critical to success in engaging doctors in redesigning care pathways for bundled payment, Deadwiler said. At the Cleveland Clinic, the first priority was been to identify and get the buy-in of a physician leader to head the rollout.

Cleveland Clinic started working in 2011 on its BPCI program for joint replacement at Euclid Hospital, where the care redesign effort was led by the physician who was the hospital's president. After the Euclid model went live in 2013, the Cleveland Clinic adjusted it, documented the model in a "playbook," then engaged physician leaders at its other hospitals to tailor the redesign for those sites.

At each hospital, the physician leader convened a kickoff meeting with the doctors and other clinical staff involved in joint replacements to discuss how to streamline the pre-surgical, inpatient and post-acute processes and determine what resources were needed to achieve that. That was followed by multiple meetings to design and test the new model and offer any support physicians needed in their offices.

Use of data is central in engaging physicians in bundled-payment programs, the groups say. Signature Medical's Tessier said the surgeons with whom his group consults around the country had never seen detailed post-acute utilization and spending data before. They typically knew little about what happened with their patients after surgery.

That's why the data on where their patients went after surgery and the rate of adverse outcomes generated by post-acute utilization was "eye-opening" to them, he said.

"It's a process of getting the doctors in a room and looking at the data together," Tessier said. "It's not telling the doctors what to do. It's being the moderator so they can make evidence-based changes to their practice." The physicians sometimes use the data to call out colleagues who are outliers, he added.

Another key to the success of bundled payment is helping surgeons prepare patients and their families for the surgery and recovery phases. That includes working with patients to improve their health before surgery to optimize outcomes, such as encouraging them to lose weight or quit smoking. Many orthopedic groups have invested in hiring nurse practitioners or surgical assistants to do this patient education work.

"It takes more time and I barely break even, but I'm extremely proud of our program because the quality of care is awesome, and we're decreasing overall costs to Medicare," said Dr. Matthew Weresh, whose group, DMOS Orthopaedic Surgeons in Des Moines, Iowa, participates in the BPCI program. "Patients are happier, and they're recovering quicker."

Some of his partners, however, aren't taking as much time with patients as others are, he said. So his group puts pressure on them because the group as a whole only receives a gain-sharing bonus if it meets its overall cost and performance targets.

CHI St. Alexius Health in Bismarck, N.D., saw bundled payment coming and started working intensively with its surgeons on a care-improvement process several years ago. So it was well-prepared when it found itself drafted into Medicare's mandatory CJR program last year.

St. Alexius' collaboration features a close "dyad" partnership between Raumi Kudrna, a nurse who directs the hospital's total joint program, and orthopedic surgeon Dr. Duncan Ackerman, who serves as the conduit to the other surgeons. They have assembled impromptu teams to design rapid solutions for increasing same-day discharges after surgery and improving pain management.

Now HHS has proposed to make bundled payment for joint replacements optional in the Bismarck area. CHI leaders are waiting to see how St. Alexius and other CHI hospitals fared financially on the CJR program in 2016 before deciding whether to stay in.

Kudrna doesn't know what the decision will be, but she's sure the collaboration to improve care and reduce costs will continue. "We put a lot of things in place that seem to work for our patients," she said. "I don't see any of that changing, whether we opt in or out."

Correction: Dr. Geoffrey Cole is executive director of operations at Piedmont Athens (Ga.) Regional Medical Center. This story originally used his former title.