Bundled Payment Research Articles

Assessing Medicare's Approach To Covering New Drugs In Bundled Payments For Oncology.

New oncology therapies can contribute to survival or quality of life, but payers and policy makers have raised concerns about the cost of these therapies. Similar concerns extend beyond cancer. In seeking a solution, payers are increasingly turning toward value-based payment models in which providers take financial risk for costs and outcomes. These models, including episode payment and bundled payment, create financial gains for providers who reduce cost, but they also create concerns about potential stinting on necessary treatments. One approach, which the Centers for Medicare and Medicaid Services adopted in the Oncology Care Model (OCM), is to partially adjust medical practices' budgets for their use of novel therapies, defined in this case as new oncology drugs or new indications for existing drugs approved after December31, 2014. In an analysis of the OCM novel therapies adjustment using historical Medicare claims data, we found that the adjustment may provide important financial protection for practices. In a simulation we performed, the adjustment reduced the average loss per treatment episode by $758 (from $807 to $49) for large practices that use novel therapies often. Lessons from the OCM can have implications for other alternative payment models.

Dialysis Patients Undergoing Total Knee Arthroplasty Have Significantly Increased Odds of Perioperative Adverse Events Independent of Demographic and Comorbidity Factors

BackgroundThe prevalence of dialysis-dependent patients is growing, and an increasing number of these patients are being considered for total knee arthroplasty (TKA). Studies assessing the preoperative risk associated with TKA in this population are limited to institutional cohorts with small sample sizes or national inpatient databases that lack follow-up data. MethodsThe 2006-2015 National Surgical Quality Improvement Program databases were queried for adult patients undergoing elective TKA. Differences in 30-day any/severe/minor adverse event, need for reoperation, readmission, and mortality were compared for dialysis-dependent and nondialysis TKA patients using risk-adjusted logistic regression. To account for the smaller number of dialysis patients and variations in study populations, coarsened exact matching was used. The proportion of adverse events that occurred before vs after discharge was also assessed. ResultsIn total, 250 dialysis-dependent patients and 163,560 nondialysis patients met inclusion criteria. After controlling for patient demographics (age, sex, body mass index, functional status) and overall health (American Society of Anesthesiologists class), matched analysis revealed dialysis-dependent patients to be significantly more likely to experience any adverse event (odds ratio = 2.01; 95% confidence interval [CI], 1.34-3.02; P = .001), severe adverse event (odds ratio = 2.49; 95% CI, 1.61-3.84; P < .001), reoperation (odds ratio = 2.38; 95% CI, 1.19-4.75; P = .014), readmission (odds ratio = 2.32; 95% CI, 1.47-3.66; P = .001), and mortality (odds ratio = 6.71; 95% CI, 2.99-22.50; P = .002). The majority of adverse outcomes occurred postdischarge. ConclusionIndependent of patient demographics and overall health (American Society of Anesthesiologists), patients undergoing dialysis before TKA are significantly more likely to experience 30-day adverse outcomes than matched nondialysis cohorts. Preoperative evaluation of bone health status and management of medical treatment are warranted in this fragile population. Cautious surgical planning, patient counseling, and heightened surveillance are necessitated throughout their perioperative period and postoperative recovery plans may need to be different from nondialysis counterparts. Furthermore, hospitals and physicians must take these increased risks into account when working on bundle payment reimbursement strategies and resource allocation. Level of Evidence3.

Managing forests for global and local ecosystem services: A case study of carbon, water and livelihoods from eastern Indonesia

Despite a recent increase of interest in global payment for ecosystem services (PES) mechanisms, there has been little comprehensive assessment of PES impacts on ecosystem services (ESs) at smaller scales. Better understanding of localized impacts of global PES can help balance ES deliveries for global benefits with those for meeting landscape and local level needs. Using a case study from eastern Indonesia, we assessed trade-offs and potential synergies between global PES (e.g. REDD+ for forest carbon) and landscape level ESs (e.g., water quantity, quality, regulation) and local ESs (e.g. forest products for food, energy, livelihoods). Realistic land use change scenarios and potential carbon credits were estimated based on historical land use changes and in-depth interviews with stakeholders. We applied a process-based hydrologic model to estimate changes in watershed services due to land use changes. Finally, local community’s forest uses were surveyed to understand locally realized ESs. The results show empirical evidence that, without careful consideration of local impacts, a PES mechanism to protect global ESs can have negative consequences for local ecosystem services. We present management alternatives designed to maximize positive synergies between different ESs at varying scales.

30-Day Episode Payments and Heart Failure Outcomes Among Medicare Beneficiaries

ObjectivesThe purpose of this study was to examine the association of 30-day payments for an episode of heart failure (HF) care at the hospital level with patient outcomes. BackgroundThere is increased focus among policymakers on improving value for HF care, given its rising prevalence and associated financial burden in the United States; however, little is known about the relationship between payments and mortality for a 30-day episode of HF care. MethodsUsing Medicare claims data for all fee-for-service beneficiaries hospitalized for HF between July 1, 2011, and June 30, 2014, we examined the association between 30-day Medicare payments at the hospital level (beginning with a hospital admission for HF and across multiple settings following discharge) and patient 30-day mortality using mixed-effect logistic regression models. ResultsWe included 1,343,792 patients hospitalized for HF across 2,948 hospitals. Mean hospital-level 30-day Medicare payments per beneficiary were $15,423 ± $1,523. Overall observed mortality in the cohort was 11.3%. Higher hospital-level 30-day payments were associated with lower patient mortality after adjustment for patient characteristics (odds ratio per $1,000 increase in payments: 0.961; 95% confidence interval [CI]: 0.954 to 0.967). This relationship was slightly attenuated after accounting for hospital characteristics and HF volume, but remained significant (odds ratio per $1,000 increase: 0.968; 95% CI: 0.962 to 0.975). Additional adjustment for potential mediating factors, including cardiac service capability and post-acute service use, did not significantly affect the relationship. ConclusionsHigher hospital-level 30-day episode payments were associated with lower patient mortality following a hospitalization for HF. This has implications for policies that incentivize reduction in payments without considering value. Further investigation is needed to understand the mechanisms that underlie this relationship.

Medicare Bundled Payments for Post-Acute Care: Characteristics and Baseline Performance of Participating Skilled Nursing Facilities.

Medicare bundled payment models have focused on post-acute care as a key component of improving the efficiency and quality of health care. This study investigated the characteristics and baseline performance of skilled nursing facilities (SNFs) that participated in Medicare Bundled Payments for Care Improvement Initiative Model 3. As of July 2016, 657 SNFs participated in 7,932 episodes in risk-bearing phase. Our retrospective analyses found that larger facilities, higher occupancy rate, chain affiliation, better five-star overall rating, and higher market competition for SNF care were associated with increased likelihood of enrolling in clinical episodes in Model 3, whereas not-for-profit ownership, higher adjusted staffing levels, higher percentage of Medicaid residents, and rural location were associated with reduced likelihood of participation in Bundled Payments for Care Improvement. Policy makers should consider approaches to encourage participation of post-acute care providers in this voluntary program and evaluate its impact on patient selection, cost of care, and health outcomes.

MP76-08 THE IMPACT OF PRE-OPERATIVE PROSTATE IMAGING AND RESIDENT PARTICIPATION ON THE FINANCIAL MARGIN OF AN EPISODE-BASED PAYMENT MODEL FOR ROBOTIC PROSTATECTOMY

You have accessJournal of UrologyGeneral & Epidemiological Trends & Socioeconomics: Value of Care: Cost & Outcomes Measures I1 Apr 2018MP76-08 THE IMPACT OF PRE-OPERATIVE PROSTATE IMAGING AND RESIDENT PARTICIPATION ON THE FINANCIAL MARGIN OF AN EPISODE-BASED PAYMENT MODEL FOR ROBOTIC PROSTATECTOMY David Johnson, Aaron Laviana, Jamal Nabhani, Reshma Gupta, Eric Kwok, Christine Ahn, Gerald Kominski, Karim Chamie, Mark Litwin, and Christopher Saigal David JohnsonDavid Johnson More articles by this author , Aaron LavianaAaron Laviana More articles by this author , Jamal NabhaniJamal Nabhani More articles by this author , Reshma GuptaReshma Gupta More articles by this author , Eric KwokEric Kwok More articles by this author , Christine AhnChristine Ahn More articles by this author , Gerald KominskiGerald Kominski More articles by this author , Karim ChamieKarim Chamie More articles by this author , Mark LitwinMark Litwin More articles by this author , and Christopher SaigalChristopher Saigal More articles by this author View All Author Informationhttps://doi.org/10.1016/j.juro.2018.02.2576AboutPDF ToolsAdd to favoritesDownload CitationsTrack CitationsPermissionsReprints ShareFacebookTwitterLinked InEmail INTRODUCTION AND OBJECTIVES In response to evolving episode-based payment models, health systems must understand the financial margins under which specific service lines operate. Margins at teaching institutions may be particularly narrow due to the added responsibility of resident education and early adoption of advanced technologies whose value is unclear. We estimate the percent reduction in profit margin under an episode-based payment for robotic prostatectomy (RP) associated with varying utilization of pre-operative multiparametric prostate MRI (mpMRI) and resident participation in the operating room. METHODS Episode costs and reimbursements were calculated to determine the margin for all 160 RPs performed at a single teaching hospital in 2016. The episode spanned the initial urologic oncology consultation preceding surgery and continued 90 days post-operatively. Outpatient costs were calculated using previously described time-driven activity based costing (TDABC). Inpatient hospital costs were calculated using a combination of TDABC and hospital activity based costing. Total reimbursement was calculated using hospital-specific Medicare Diagnosis Related Group and Medicare Fee Schedule amounts for all billed codes within the episode. We determined the impact on financial margin for three combinations of mpMRI utilization (0%, 33%, 100%) and number of residents in the operating room (0, 1, 2) using previously calculated TDABC amounts. Direct Medical Education payments and the impact of resident participation on operative time were not included in these calculations. RESULTS Compared with the reference case of no mpMRI and no resident in the OR, the percent reduction in the margin ranged from 4.8 to 43.0% depending on the utilization of mpMRI and resident participation (Figure 1). CONCLUSIONS Varying degrees of utilization of modifiable cost drivers results in a substantial reduction of margin in a theoretical bundled payment model. Resident education is a core mission for academic centers and this mission may impact margin by 19-43%. Granular analysis of cost and reimbursement informs opportunities for value-based care redesign to help health systems succeed under advanced alternative payment models currently being tested by Medicare. © 2018FiguresReferencesRelatedDetails Volume 199Issue 4SApril 2018Page: e1021 Advertisement Copyright & Permissions© 2018MetricsAuthor Information David Johnson More articles by this author Aaron Laviana More articles by this author Jamal Nabhani More articles by this author Reshma Gupta More articles by this author Eric Kwok More articles by this author Christine Ahn More articles by this author Gerald Kominski More articles by this author Karim Chamie More articles by this author Mark Litwin More articles by this author Christopher Saigal More articles by this author Expand All Advertisement Advertisement PDF downloadLoading ...

Abstract 29: Cardiac Surgery Episode Expenditures Associated With Healthcare-Associated Pneumonia

Objective: Pneumonia is the most common healthcare-associated infection (HAI) in patients undergoing cardiac surgery. While current efforts have focused on risk factors and clinical implications of pneumonia, few have examined its overall financial impact. Our objective was to compare 90-day episode expenditures for Medicare patients undergoing coronary artery bypass graft surgery (CABG) with and without pneumonia. Methods and Results: Using 2014-2015 Medicare Part A and B administrative claims data, we identified 50,550 patients undergoing isolated CABG. From this sample, we applied an established claims-based algorithm to identify 3,224 (6.4%) patients with new onset of pneumonia during their index admission and after their surgical procedure. Using generalized linear models, we found that average 90-day episode expenditures were 30% higher in patients with pneumonia ($55,442 vs. $42,745, p&lt;0.001), adjusting for patient factors (age, sex, race, dual eligible status, and Elixhauser comorbidities) and hospital random intercepts (Table). Half of the added 90-day expenditures can be attributed to payments made for higher severity diagnosis-related group (DRG) billing codes in patients with pneumonia (+$6,275, p&lt;0.001). The greatest relative increase in expenditures was for outlier hospitalization expenditures (+211%, p&lt;0.001). Pneumonia was also associated with greater expenditures for post-discharge care, outpatient physician services, and readmissions, although these accounted for less than 20% of added expenditures. We estimated that 2% of all Medicare payments for CABG episodes during the study period are due to pneumonia. Conclusion: New onset pneumonia is associated with 30% higher 90-day episode expenditures in CABG, independent of patient case mix. Prevention efforts could reduce excessive hospital inpatient utilization and save payers hundreds of millions of dollars every year.

Abstract 18: Center Variation in 90-Day Episode Expenditures for Cardiac Surgery - The Role of Healthcare-Associated Pnuemonia

Objective: Pneumonia is the most common healthcare-associated infection following cardiac surgery, and associated with poorer clinical outcomes and substantially higher hospital costs. Less understood is the role that the care and treatment of post-operative pneumonia may have on a hospital’s 90-day episode payments. We hypothesize that expenditures associated with pneumonia may significantly impact a hospital’s 90-day episode payments for coronary artery bypass graft (CABG) surgery. Methods and Results: Using Medicare Part A and B claims data, we identified 49,573 patients undergoing isolated CABG in 1,001 hospitals with greater than 10 cases (2014-15). We applied an established claims-based algorithm to identify 3,135 (6.3%) patients as having a new onset of pneumonia during their index admission and after their surgical procedure. Using hierarchical logistic regression models, we estimated risk-adjusted hospital-level pneumonia rates, adjusted for age, sex, race, Medicaid eligibility, Elixhauser comorbidities, and hospital-random effect. There was weak correlation (r=0.20, p&lt;0.001) between observed and predicted (adjusting for only patient factors) hospital-level pneumonia rates, indicating patient factors explained little of the variation between hospitals. We placed patients into quartiles based on rank-order of hospital risk-adjusted pneumonia rates; the pneumonia rate in the lowest and highest quartile was 3.4% and 13.9% (p&lt;0.001), respectively (Table). Average risk-adjusted 90-day episode expenditures were 10% higher for patients in the highest quartile hospitals compared to the lowest quartile ($41,936 vs. $46,095 vs., p&lt;0.001). Payments for outlier hospitalizations were 100% greater in the highest quartile hospitals compared to the lowest quartile, and accounted for 28.5% of the total difference between high and low spending hospitals. Conclusion: New onset pneumonia after cardiac surgery varies widely across hospitals, and counter to conventional wisdom, is not driven by patient risk. Cardiac surgical programs should consider the prevention and management post-operative pneumonia as a component of their overall strategy for reducing 90-day episode payments.

A trend analysis of surgical operations under a global payment system in Tehran, Iran (2005-2015).

BackgroundGlobal payment system is a first example of per-case payment system that contains 60 commonly used surgical operations for which payment is based on the average cost per case in Iran.ObjectiveThe aim of the study was to determine the amount of reduction, increase or no change in the trend of global operations.MethodsIn this retrospective longitudinal study, data on the 60 primary global surgery codes was gathered from Tehran Health Insurance Organization within the ten-year period of 2005–2015 separately, for each month. Out of 60 surgery codes, only acceptable data for 46 codes were available based on the insurance documents sent by medical centers. A quantitative analysis of time series through Regression Analysis Model using STATA software v.11 was performed.ResultsSome global surgery codes had an upward trend and some were downwards. Of N Codes, N83, N20, N28, N63, and N93 had an upward trend (p<0.05) and N32, N43, N81 and N90 showed a significant downward trend (p<0.05). Similarly, all H Codes except for H18 had a significant upward trend (p<0.000). As such, K Codes including K45, K56 and K81 had an increasing movement. S Codes also experienced both increasing and decreasing trends. However, none of the O Codes changed according to time. Other global surgical codes like C61, E07, M51, L60, J98 (p<0.000), I84 (p<0.031) and I86 (p<0.000) shown upward and downward trends. Total global surgeries trend was significantly upwards (B=24.26109, p<0.000).ConclusionThe varying trend of global surgeries can partly reflect the behavior of service providers in order to increase their profits and minimize their costs.

Risk Adjustment Is Necessary in Medicare Bundled Payment Models for Total Hip and Knee Arthroplasty

BackgroundConcerns exist that high-risk patients in alternative payment models may face difficulties with access to care without proper risk adjustment. The purpose of this study is to identify the effect of medical and orthopedic specific risk factors on the cost of a 90-day episode of care following total hip (THA) and knee arthroplasty (TKA). MethodsWe queried the Medicare 5% Limited Data Set for all patients undergoing primary THA and TKA from 2010 to 2014. To evaluate the cost of an episode of care, we calculated all claims for 90 days following surgery. Multivariate analysis was performed to quantify the added episode-of-care costs for demographic variables, geography, medical comorbidities, and orthopedic specific risk factors. ResultsOf the 58,809 TKA patients, the median 90-day Medicare costs was $23,800 (interquartile range, $18,900-$32,300), while the median of the 27,293 THA patients was $24,000 (interquartile range, $18,500-$33,900). Independent risk factors (all P < .05) resulting in at least a 10% increase in episode-of-care costs following TKA included malnutrition, age over 85, male gender, pulmonary disorder, failed internal fixation, Northeast region, lower socioeconomic status, neurologic disorder, and rheumatoid arthritis. Independent risk factors (all P < .05) resulting in at least a 10% increase in episode-of-care costs following THA included malnutrition, male gender, age over 85, failed internal fixation, hip dysplasia, Northeast region, neurologic disorder, lower socioeconomic status, conversion THA, avascular necrosis, and depression. ConclusionCertain comorbidities and orthopedic risk factors increase 90-day episode-of-care costs in the Medicare population. The current lack of proper risk stratification could be a powerful driver of decreased access to care for our most medically challenged members of society.

Characteristics of Hospitals Earning Savings in the First Year of Mandatory Bundled Payment for Hip and Knee Surgery

Characteristics of Hospitals Earning Savings in the First Year of Mandatory Bundled Payment for Hip and Knee Surgery

The role of digital assets in global payments

This paper examines the role of digital ledger technologies (DLT) and their underlying digital assets in the arena of global payments, arguing that digital assets can make such payments faster, less expensive and more efficient. The paper begins by describing the state of cross-border transactions today, highlighting the often piecemeal development of systems that have led to today’s network of walled gardens corresponding to national borders and currencies. It also discusses DLT solutions that are being tested to overcome these limitations. However, this technology alone cannot overcome liquidity issues in local markets — especially emerging markets. Presently, banks and payment providers resolve these issues by prefunding accounts in local currencies on both sides of a transaction, using something called nostro accounts. This is where digital assets can deliver a clear advantage when used in combination with DLT. Acting as a bridge currency, digital assets can create the necessary pools of liquidity and enable direct transactions. The future of cross-border payments will then be realised through the combination of DLT and digital assets. In this way, banks and payment providers can quickly and easily complete affordable, transparent, real-time transactions. This promise is already being tested by early adopters, and is projected to grow exponentially throughout 2018.

Prevention of Rehospitalization in Non-Compliant Patients Utilizing Transitional Care Program (TCM): A Bundle Payment Care Initiative (BPCI Model 3) Case Study

Prevention of Rehospitalization in Non-Compliant Patients Utilizing Transitional Care Program (TCM): A Bundle Payment Care Initiative (BPCI Model 3) Case Study

Bundled care payment models

In response to rising national healthcare spending, the Medicare program has proposed episode-based payments models as an alternative to the traditional fee-for-service program. A “bundled payment” is a single reimbursement provided for all aspects of care for a single diagnosis or procedure. This reimbursement model is argued to improve care delivery by accomplishing the following goals: (1) Improve coordination between hospital and physicians as well as between different care teams. (2) Improve efficiency of care thereby reducing spending. (3) Incentivize quality improvement. Post-implementation analyses of the bundled payment pilot models have demonstrated positive financial results, though the appropriate inclusion criteria for providers and optimal payment calculations remain under investigation.

Bringing patient incentives into the bundled payments model: Making reimbursement more patient-centric financially

ABSTRACTIn this era of patient centricity, this article makes the simple and straightforward case for including patients in bundled payment (BP) financial incentives. We begin by briefly reviewing the key frameworks and models for provider reimbursement, including activity-based costing, cost plus pricing, diagnosis-related group classification, Medicare Cost Plus, and resource-based relative value scale. Given these previous approaches, we argue that, in many ways, the BP model is an exemplar of reimbursement innovation. We then explore key elements of incorporating payoffs for patients, including care redesign, continuum of care, core competencies, cost cutting, applying metrics, and creating a collaborative BP network. The article concludes by discussing future challenges and opportunities for embedding patient financial incentives within the BP model. The high level of political and regulatory uncertainty at the state and federal levels makes this a ripe time for experimenting with financially compensating patients for their role in helping providers accomplished the key metrics required for BP compensation. Bringing patients into the fold financially holds the potential to solidify episode-based payments as a fundamental element of the alternative payment models promoted by Centers for Medicare & Medicaid Services (CMS) and private payers.

Both patients and maternity care providers can benefit from payment reform: four steps to prepare

Many Medicaid programs and private health plans are implementing new models of maternity care reimbursement, and clinicians face mounting pressure to demonstrate high-quality care at a lower cost. Clinicians will be better prepared to meet these challenges with a fuller understanding of new payment models and the opportunities they present. We describe the structure of maternity care episode payments and recommend 4 ways that clinicians can prepare for success as value-based payment models are implemented: identify opportunities to improve outcomes and experience, measure quality, reduce waste, and work in teams across settings.

The Rise and Fall of Mandatory Cardiac Bundled Payments

The Rise and Fall of Mandatory Cardiac Bundled Payments

Effects of Global Payment and Accountable Care on Medication Treatment for Alcohol and Opioid Use Disorders.

The Alternative Quality Contract (AQC) implemented in 2009 by Blue Cross Blue Shield of Massachusetts (BCBSMA) is intended to improve quality and control costs by putting providers at risk for total medical spending and tying payment to performance on specified quality measures. We examined the AQC's early effects on use of and spending on medication treatment (MT) for addiction among individuals with alcohol use disorders (AUDs) and opioid use disorders (OUDs), conditions not subject to any performance measurement in the AQC. Using data from 2006 to 2011, we use difference-in-difference estimation of the effect of the AQC on MT using a comparison group of enrollees in BCBSMA whose providers did not participate in the AQC. We compared AQC and non-AQC enrollees with AUDs (n = 37,113 person-years) and/or OUDs (n = 12,727 person-years) on any use of MT, number of prescriptions filled, and MT spending adjusting for demographic and health status characteristics. There was no difference in MT use among AQC enrollees with OUD (38.7%) relative to the comparison group (39.1%) (adjusted difference = -0.4%, 95% confidence interval -3.8% to 3.0%, P = 0.82). Likewise, there was no difference in MT use for AUD between the AQC (6.3%) and comparison group (6.5%) (P = 0.64). Similarly, we detected no differences in number of prescriptions or spending. Despite incentives for improved integration and quality of care under a global payment contract, the initial 3 years of the AQC showed no impact on MT use for AUD or OUD among privately insured enrollees with behavioral health benefits.

Development Trends in the Global Payment Card Market

Development Trends in the Global Payment Card Market

Association of Informal Clinical Integration of Physicians With Cardiac Surgery Payments

To reduce inefficiency and waste associated with care fragmentation, many current programs target greater clinical integration among physicians. However, these programs have led to only modest Medicare spending reductions. Most programs focus on formal integration, which often bears little resemblance to actual physician interaction patterns. To examine how physician interaction patterns vary between health systems and to assess whether variation in informal integration is associated with care delivery payments. National Medicare data from January 1, 2008, through December 31, 2011, identified 253 545 Medicare beneficiaries (aged ≥66 years) from 1186 health systems where Medicare beneficiaries underwent coronary artery bypass grafting (CABG) procedures. Interactions were mapped between all physicians who treated these patients-including primary care physicians and surgical and medical specialists-within a health system during their surgical episode. The level of informal integration was measured in these networks of interacting physicians. Multivariate regression models were fitted to evaluate associations between payments for each surgical episode made on a beneficiary's behalf and the level of informal integration in the health system where the patient was treated. The informal integration level of a health system. Price-standardized total surgical episode and component payments. The total 253 545 study participants included 175 520 men (69.2%; mean [SD] age, 74.51 [5.75] years) and 78 024 women (34.3%; 75.67 [5.91] years). One beneficiary of the 253 545 participants did not have sex information. The low level of informal clinical integration included 84 598 patients (33.4%; mean [SD] age, 75.00 [5.93] years); medium level, 84 442 (33.30%; 74.94 [5.87] years); and high level, 84 505 (33.34%; 74.66 [5.72] years) (P < .001). Informal integration levels varied across health systems. After adjusting for patient, health-system, and community factors, higher levels of informal integration were associated with significantly lower total episode and component payments (β coefficients for informal integration were -365.87 [95% CI, -451.08 to -280.67] for total episode payments, -182.63 [-239.80 to -125.46] for index hospitalization, -43.13 [-55.53 to -30.72] for physician services, -74.48 [-103.45 to -45.51] for hospital readmissions, and -62.04 [-88.00 to -36.07] for postacute care; P < .001 for each association). When beneficiaries were treated in health systems with higher informal integration, the greatest savings of lower estimated payments were from hospital readmissions (13.0%) and postacute care services (5.8%). Informal integration is associated with lower spending. Although most programs that seek to promote clinical integration are focused on health systems' formal structures, policy makers may also want to address informal integration.