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Early Lessons on Bundled Payment at an Academic Medical Center

Jubelt, Lindsay E. MD, MS; Goldfeld, Keith S. DrPH, MS, MPA; Blecker, Saul B. MD, MHS; Chung, Wei-Yi MS, ASN; Bendo, John A. MD; Bosco, Joseph A. MD; Errico, Thomas J. MD; Frempong-Boadu, Anthony K. MD; Iorio, Richard MD; Slover, James D. MD, MS; Horwitz, Leora I. MD, MHS

JAAOS - Journal of the American Academy of Orthopaedic Surgeons: September 2017 - Volume 25 - Issue 9 - p 654–663
doi: 10.5435/JAAOS-D-16-00626
Research Article

Introduction: Orthopaedic care is shifting to alternative payment models. We examined whether New York University Langone Medical Center achieved savings under the Centers for Medicare and Medicaid Services Bundled Payments for Care Improvement initiative.

Methods: This study was a difference-in-differences study of Medicare fee-for-service patients hospitalized from April 2011 to June 2012 and October 2013 to December 2014 for lower extremity joint arthroplasty, cardiac valve procedures, or spine surgery (intervention groups), or for congestive heart failure, major bowel procedures, medical peripheral vascular disorders, medical noninfectious orthopaedic care, or stroke (control group). We examined total episode costs and costs by service category.

Results: We included 2,940 intervention episodes and 1,474 control episodes. Relative to the trend in the control group, lower extremity joint arthroplasty episodes achieved the greatest savings: adjusted average episode cost during the intervention period decreased by $3,017 (95% confidence interval [CI], −$6,066 to $31). For cardiac procedures, the adjusted average episode cost decreased by $2,999 (95% CI, −$8,103 to $2,105), and for spinal fusion, it increased by $8,291 (95% CI, $2,879 to $13,703). Savings were driven predominantly by shifting postdischarge care from inpatient rehabilitation facilities to home. Spinal fusion index admission costs increased because of changes in surgical technique.

Discussion: Under bundled payment, New York University Langone Medical Center decreased total episode costs in patients undergoing lower extremity joint arthroplasty. For patients undergoing cardiac valve procedures, evidence of savings was not as strong, and for patients undergoing spinal fusion, total episode costs increased. For all three conditions, the proportion of patients referred to inpatient rehabilitation facilities upon discharge decreased. These changes were not associated with an increase in index hospital length of stay or readmission rate.

Conclusion: Opportunities for savings under bundled payment may be greater for lower extremity joint arthroplasty than for other conditions.

From the Department of Population Health (Dr. Jubelt, Dr. Goldfeld, Dr. Blecker, Ms. Chung, and Dr. Horwitz), the Department of Medicine (Dr. Jubelt, Dr. Goldfeld, Dr. Blecker, and Dr. Horwitz), the Department of Neurosurgery (Dr. Frempong-Boadu), New York University School of Medicine, New York, NY, and the Department of Orthopedic Surgery (Dr. Bendo, Dr. Bosco, Dr. Errico, Dr. Iorio, and Dr. Slover), New York University Langone Medical Center and NYU School of Medicine, New York.

Correspondence to Dr. Horwitz: leora.horwitz@nyumc.org

Dr. Blecker or an immediate family member serves as a board member, owner, officer, or committee member of the Society of General Internal Medicine. Dr. Bosco or an immediate family member has received royalties from Genovel Orthopedics; is a member of a speakers’ bureau or has made paid presentations on behalf of Pacira Pharmaceuticals; serves as a paid consultant to Labrador Healthcare, Genovel Orthopedics, Medtronic, and Surgical Directions; has stock or stock options held in Genovel Orthopedics; and serves as a board member, owner, officer, or committee member of the Association of Professionals in Infection Control and Epidemiology and the Orthopaedic Learning Center. Dr. Errico or an immediate family member has received royalties from Fastenetix; is a member of a speakers’ bureau or has made paid presentations on behalf of and serves as a paid consultant to K2M; has received research or institutional support from Medtronic, Paradigm Spine, and Pfizer; has received nonincome support (such as equipment or services), commercially derived honoraria, or other non–research-related funding (such as paid travel) from K2M; and serves as a board member, owner, officer, or committee member of the Harms Study Group and the International Spine Study Group. Dr. Frempong-Boadu or an immediate family member is a member of a speakers’ bureau or has made paid presentations on behalf of and serves as a paid consultant to Medtronic and has stock or stock options held in Vertera Spine, Woven Therapeutics, and LessRay Spine. Dr. Iorio or an immediate family member serves as a paid consultant to DJO Global, Medtronic, MCS Medical Compression Systems, Muve Health, and Pacira Pharmaceuticals; has stock or stock options held in MCS Medical Compression Systems, Muve Health, URXmobile System, and Wellbe; has received research or institutional support from Bioventus, Ferring Pharmaceuticals, Orthofix, OrthoSensor, Pacira Pharmaceuticals, and Vericel; and serves as a board member, owner, officer, or committee member of the American Association of Hip and Knee Surgeons, The Hip Society, and The Knee Society. Dr. Slover or an immediate family member has received research or institutional support from Zimmer Biomet and serves as a board member, owner, officer, or committee member of the American Academy of Orthopaedic Surgeons and the American Association of Hip and Knee Surgeons. None of the following authors or any immediate family member has received anything of value from or has stock or stock options held in a commercial company or institution related directly or indirectly to the subject of this article: Dr. Jubelt, Dr. Goldfeld, Ms. Chung, Dr. Bendo, and Dr. Horwitz.

Dr. Blecker acknowledges support by the Agency for Healthcare Research and Quality (grant number K08HS23683). Dr. Horwitz works under contract with the Centers for Medicare and Medicaid Services to develop and maintain performance measures. The authors acknowledge that data for this project were provided through the Centers for Medicare and Medicaid Services Bundled Payments for Care Improvement (Awardee Identification BPID number 2106-000).

The statements contained in this document are solely those of the authors and do not necessarily reflect the views or policies of the Centers for Medicare and Medicaid Services or of the Agency for Healthcare Research and Quality.

Received August 21, 2016

Accepted December 28, 2016

© 2017 by American Academy of Orthopaedic Surgeons
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