2-Year Cost Study of Bundled Payment Program

A new study looked into the impact of the Comprehensive Care for Joint Replacement (CJR) program—also known as the bundled payments program—on total joint replacement costs.

The study, “Two-Year Evaluation of Mandatory Bundled Payments for Joint Replacement,” was published in the January 2, 2019 edition of The New England Journal of Medicine.

Michael L. Barnett, M.D., M.S., assistant professor of Health Policy and Management at the Harvard T. H. Chan School of Public Health and co-author explained the study to OTW, “Working as a hospitalist, I have seen time and time again how subjective the discharge process can be. There is no clear clinical approach to deciding whether a patient will do best with home heath, a nursing facility or an acute rehab facility. I was attracted to the CJR program to see whether hospitals could put systems in place to better manage the use of post-acute care given the financial incentive.”

Barnett and his co-authors then reviewed 280,161 hip or knee replacement procedures in 803 hospitals in treatment areas and 377,278 procedures in 962 hospitals which served as the control in the study. The researchers found that after hospitals adopted the CJR model, they spent less per joint replacement episode than hospitals who did not adopt the CJR program.

Barnett explained to OTW: “The differential reduction was driven largely by a 5.9% relative decrease in the percentage of episodes in which patients were discharged to post–acute care facilities. The CJR program did not have a significant differential effect on the composite rate of complications or on the percentage of joint-replacement procedures performed in high-risk patients.”

“Hospitals”, said Barnett, “were able to save money with CJR without an obvious negative impact. This reduction in spending came almost entirely from reductions in the use of institutional post-acute care like skilled nursing facilities.”

“I think that bundled payments are likely going to be a dominant payment model for orthopedic procedures in the future given the evidence base building around their effectiveness. Orthopedic surgeons should prepare for this by building relationships with skilled nursing facilities and developing in-house guidelines around how and when to use post-acute care. Also, surgeons should try to pay attention to the impact that post-acute care has on their patients.”