Only a very small proportion of the hip and knee replacements performed on commercially insured patients at Providence St. Joseph Health's hospitals are paid for in bundles, or lump sums regardless of whether the total cost exceeds that amount. On the Medicare side, the Renton, Wash.-based system has seen its costs decrease significantly since it started participating in the CMS' Comprehensive Care for Joint Replacement bundles, said Kevin Fleming, Providence St. Joseph's vice president of orthopedics and sports medicine. Twenty of the system's 50 hospitals are enrolled in the joint replacement program.
"Working with those government bundles really caused us to re-examine what we were doing and take a whole new approach—not being so laser-focused on what's going on within the four walls of our own hospital and looking at what we're doing for patients before they come to the hospital and then after discharge," he said.
Even the system's markets that aren't enrolled in the CMS program have adopted some of those hospitals' value-based strategies, such as using case managers to make sure patients get the right care once they leave the hospital, Fleming said.
Meanwhile, Toledo, Ohio-based ProMedica has value-based contracts with all major commercial insurers, said Michael Browning, the system's CFO. The contracts use per member, per month fees and share in upside opportunity, but not downside risk, he said.
What bothers Browning is that even if health systems like his remove waste from the system using value-based payment, he isn't seeing the reimbursement returning to those systems.
"The question would be: How are the insurance companies benefiting?" Browning said. "If you look at their stock prices, if you look at their profits, I would say value-based care has probably been pretty good for them."
Similarly, the Detroit-based Henry Ford Health System, has increased the proportion of its commercial, Medicare and Medicaid contracts that are value-based and share risk from 20% in 2015 to 36% in 2017, said Robin Damschroder, the system's interim CFO. But like Browning, she questions whether health insurers will pass any resulting savings onto their members, even if Henry Ford accepts lower rates for services.
"We may have lowered our cost and accepted a lower rate; the insurance company needs to be the one to get that back to the consumer," Damschroder said. "It's not in our control to give it back to the consumer."