Bundled Payment Research Articles

Modeling the Potential Economic Impact of the Medicare Comprehensive Care for Joint Replacement Episode-Based Payment Model

BackgroundThe Medicare program has initiated Comprehensive Care for Joint Replacement (CJR), a bundled payment mandate for lower extremity joint replacements. We sought to determine the degree to which hospitals will invest in care redesign in response to CJR, and to project its economic impacts. MethodsWe defined 4 potential hospital management strategies to address CJR: no action, light care management, heavy care management, and heavy care management with contracting. For each of 798 hospitals included in CJR, we used hospital-specific volume, cost, and quality data to determine the hospital's economically dominant strategy. We aggregated data to assess the percentage of hospitals pursuing each strategy; savings to the health care system; and costs and percentages of CJR-derived revenues gained or lost for Medicare, hospitals, and postacute care facilities. ResultsIn the model, 83.1% of hospitals (range 55.0%-100.0%) were expected to take no action in response to CJR, and 16.1% of hospitals (range 0.0%-45.0%) were expected to pursue heavy care management with contracting. Overall, CJR is projected to reduce health care expenditures by 0.5% (range 0.0%-4.1%) or $14 million (range $0-$119 million). Medicare is expected to save 2.2% (range 2.2%-2.2%), hospitals are projected to lose 3.7% (range 4.7% loss to 3.8% gain), and postacute care facilities are expected to lose 6.5% (range 0.0%-12.8%). Hospital administrative costs are projected to increase by $63 million (range $0-$148 million). ConclusionCJR is projected to have a negligible impact on total health care expenditures for lower extremity joint replacements. Further research will be required to assess the actual care management strategies adopted by CJR hospitals.

The entrapment of major holders: how big financial players shape the future of the US dollar

The global dominance of the US dollar as the key currency of the post-Bretton Woods monetary system rests on the cooperation of private financial markets as well as foreign central banks. The latter, in particular, avoid the collapse of the dollar’s value in periods of economic distress and bearish market cycles using two policies. One is the accumulation of more-than-necessary foreign exchange reserves denominated in US dollars. The second is following the Federal Reserve’s interest-rate policy to assure a steady flow of investments towards the American market. This research focuses on this second practice in order to improve our still insufficient understanding of the actual drivers of foreign countries’ reaction to the Fed’s policy moves. The article contributes to the existing debates in international political economy regarding the determinants of macroeconomic adjustments among interdependent economies. Specifically, it assesses the role played, in this respect, by the relative size of a country’s stock of foreign assets. According to the findings, corroborated through a within-between regression over a large panel of countries, in economies holding relatively less dollar-denominated securities monetary authorities are less prone to sacrifice an autonomous governance of interest rates for cushioning the consequences of imbalances in the global payment system.

Payment Mechanisms, Incentives for Adoption And Value of Health-Information Exchanges (HIEs)

Recent initiatives to improve health care quality and reduce costs have centered around payment mechanisms and IT-enabled health-information exchanges (HIEs). Such initiatives have profound influences both on providers' choices regarding health care effort levels and HIE adoption and on patients' choices of providers. Using a game-theoretical model of a healthcare setup, we examine the role of payment model in aligning providers' and patients' incentives to make socially optimal (i.e., first best) choices. We show that the traditional fee-for-service (FFS) payment model does not induce the first best. The more recent pay-for-performance (P4P) models may induce the first best if patients have only a weak incentive to switch providers during a health episode and hence provider coordination is less of an issue. We identify an episode-based payment (EBP) model that induces the first best, regardless of the patient incentive to switch providers. When a P4P model induces the first best, the proposed EBP model reduces to that P4P model. When patients have a moderate or a strong incentive to switch providers, the first-best inducing EBP model is multilateral in the sense that the payment to a provider depends not only on the provider's own efforts and outcomes but also those of the other provider. Furthermore, the payment in this EBP model is sequence dependent in the sense that payment to a provider is contingent upon whether the patient visits the provider first or second. We show that the proposed EBP model achieves the lowest healthcare cost and the highest quality, but does not always result in the lowest payment to providers among the three payment models. We further show that the value of HIEs depends critically on the payment model as well as the patients' incentives to switch providers. The value of HIEs is higher when patients have stronger incentives to switch regardless of the payment model. Moreover, the value of HIEs is highest under the FFS model and lowest under the P4P models. Hence, assessing the value of HIEs in isolation from the underlying payment mechanism and patient switching behavior may result in under- or overestimation of the HIE value. Therefore, as payment models evolve over time, there is a real need to reevaluate the value of HIE adoption and the government policies that induce providers to adopt HIE.

Bundle Payment Program Initiative: Roles of a Nurse Navigator and Home Health Professionals.

With the passage of the Affordable Care Act, The Centers for Medicare and Medicaid (CMS) introduced a new value-based payment model, the Bundle Payment Care Initiative. The CMS Innovation (Innovation Center) authorized hospitals to participate in a pilot to test innovative payment and service delivery models that have a potential to reduce Medicare expenditures while maintaining or improving the quality of care for beneficiaries. A hospital-based home care agency, Abington Jefferson Health Home Care Department, led the initiative for the development and implementation of the Bundled Payment Program. This was a creative and innovative method to improve care along the continuum while testing a value-based care model.

Solving Disparities Through Payment And Delivery System Reform: A Program To Achieve Health Equity.

Payment systems generally do not directly encourage or support the reduction of health disparities. In 2013 the Finding Answers: Solving Disparities through Payment and Delivery System Reform program of the Robert Wood Johnson Foundation sought to understand how alternative payment models might intentionally incorporate a disparities-reduction component to promote health equity. A qualitative analysis of forty proposals to the program revealed that applicants generally did not link payment reform tightly to disparities reduction. Most proposed general pay-for-performance, global payment, or shared savings plans, combined with multicomponent system interventions. None of the applicants proposed making any financial payments contingent on having successfully reduced disparities. Most applicants did not address how they would optimize providers' intrinsic and extrinsic motivation to reduce disparities. A better understanding of how payment and care delivery models might be designed and implemented to reduce health disparities is essential.

Design Challenges of an Episode-Based Payment Model in Oncology: The Centers for Medicare & Medicaid Services Oncology Care Model.

The Centers for Medicare & Medicaid Services developed the Oncology Care Model as an episode-based payment model to encourage participating practitioners to provide higher-quality, better-coordinated care at a lower cost to the nearly three-quarter million fee-for-service Medicare beneficiaries with cancer who receive chemotherapy each year. Episode payment models can be complex. They combine into a single benchmark price all payments for services during an episode of illness, many of which may be delivered at different times by different providers in different locations. Policy and technical decisions include the definition of the episode, including its initiation, duration, and included services; the identification of beneficiaries included in the model; and beneficiary attribution to practitioners with overall responsibility for managing their care. In addition, the calculation and risk adjustment of benchmark episode prices for the bundle of services must reflect geographic cost variations and diverse patient populations, including varying disease subtypes, medical comorbidities, changes in standards of care over time, the adoption of expensive new drugs (especially in oncology), as well as diverse practice patterns. Other steps include timely monitoring and intervention as needed to avoid shifting the attribution of beneficiaries on the basis of their expected episode expenditures as well as to ensure the provision of necessary medical services and the development of a meaningful link to quality measurement and improvement through the episode-based payment methodology. The complex and diverse nature of oncology business relationships and the specific rules and requirements of Medicare payment systems for different types of providers intensify these issues. The Centers for Medicare & Medicaid Services believes that by sharing its approach to addressing these decisions and challenges, it may facilitate greater understanding of the model within the oncology community and provide insight to others considering the development of episode-based payment models in the commercial or government sectors.

The Next Generation of Episode-Based Payments

The Next Generation of Episode-Based Payments

Forecasting financial impact of alternative payment models to cancer drug manufacturers.

6549 Background: Payers are moving from fee-for-service (FFS) reimbursement models towards value-based Alternative Payment Models (APMs). In Medicare, this trend has emerged via MACRA legislation and the Oncology Care Model (OCM). Reimbursement changes carry financial implications for payers, providers, and drug manufacturers. Methods: Financial impact of APMs was modeled as a function of Volume Factors and Price Factors in sales of a cancer drug product. Volume Factors included utilization patterns and market share. Price Factors included launch price, price increases, and both mandated and negotiated discounts. The model described three APM categories: Buy & Bill Plus (similar to OCM), Episode-Based Payment, and Third-Party Buy & Bill. The model included assumed timelines of APM implementation and the share of commercial insurer and Medicare markets implementing. Assumptions were generated in a multi-stakeholder workshop applying a modified Delphi method and Nominal Group Technique to arrive at consensus. The model included input ability for existing product forecast data including expected patient numbers, market share, payer mix, channel mix, price, 340B discount parameters, and additional concessions. Combinations of inputs and assumptions were run through the model as scenarios to generate results. Results: Across all scenarios, Episode-Based Payment resulted in revenues averaging 34% below baseline forecast at the ten-year mark. Third-Party Buy and Bill resulted in revenues averaging 100% of baseline at the ten-year mark. Buy and Bill Plus resulted in revenues averaging 66% below baseline at the ten-year mark. Market share as a function of clinical differentiation appeared to be a significant factor influencing revenue impact, with highly differentiated products outperforming others in all APMs. Conclusions: While much attention is paid to the impact of reimbursement reform on oncology provider economics, with subsequent impacts to patient access, less attention has been focused on impact to drug manufacturers. APM implementation could significantly impact manufacturer revenues, which in turn may impact both access to such therapies and research investment towards new anti-cancer therapies.

The impact of the Affordable Care Act (ACA) on cancer survivorship.

10072 Background: The ACA of 2010 has been recognized by the cancer community as an important step forward in insurance and payment reform, aiming to expand the number of insured patients, control costs and incentivize health care delivery system changes. In this review, we outline the ACA provisions relevant to cancer survivorship, provide available evidence for their impact, and offer insights for future research. Methods: We conducted a literature search in the PubMed database and grey literature. We searched the terms ‘ACA and cancer survivors’, which resulted in 17 articles and expanded the search to ‘ACA and cancer’ and found 213 articles, of which 75 were relevant for this review. We categorized the ACA provisions into three categories, 1) access to preventive care, 2) access to quality, coordinated care, and 3) coverage expansion and increased affordability. Results: Positive effects of the ACA were: an increased uptake of preventive services and cancer screening; a reduction in hospital admissions, increased guidelines concordance and generic prescribing through the implementation of cancer-specific Accountable Care Organizations; a reduction of unnecessary resource use (e.g. emergency visits) through the implementation of oncology patient-centered medical home models and decreases in costs though bundle payments. These results focus on the general population/cancer patients; specific studies targeting at the effects on cancer survivors are missing. In addition, evidence from literature showed that knowledge about the benefits of the ACA is low among childhood cancer survivors; while insurance coverage rates of cancer survivors, especially for childhood cancer survivors, increased. Conclusions: Evidence regarding the effects of the ACA on cancer survivorship care is limited, though point to greater access to preventive services and screening programs. Effects of provisions focusing on quality, coordinated care as well as coverage expansion and affordability may have beneficial effects. Whether the ACA remains or is reformed, it is critically important that decisions take into account the potential intended and unintended consequences of the ACA provisions on health outcomes and quality of life of this growing population.

Differences in medical care costs for recurrent versus de novo stage IV cancer by age at diagnosis.

6611 Background: To address the paucity of data on costs of cancer recurrence, this study estimated medical care costs of patients diagnosed with recurrent breast, colorectal or lung cancer, and compared costs to patients diagnosed with de novo stage IV disease. Methods: Data from patients enrolled in three health plans who were diagnosed with de novo stage IV or recurrent breast (nstage IV = 352; nrecurrent= 765), colorectal (nstage IV = 1072 and nrecurrent= 542) and lung (nstage IV = 4042 and nrecurrent= 339) cancers between 2000-2012 were used to estimate total medical care costs in the 12 months preceding (pre-index), month of index, and 12 months following (post-index) diagnosis/recurrence date. Cancer patients were identified using tumor registry data. Recurrent cancers were validated by medical record abstraction and the RECUR algorithms –innovative tools to detect recurrence using claims and electronic health record data. We used generalized linear repeated measures regression models controlling for demographic and comorbidity variables to estimate costs (2012 US$), stratified by age at diagnosis (ages < 65, ≥65). Results: Medical care cost differences in the pre-index period indicate higher costs for recurrent cancer patients than for stage IV breast (Age < 65:+$2550; Age ≥65: +$1254), colorectal (Age < 65:+$3295; Age ≥65: +$1653), and lung cancer patients (Age < 65:+$3232; Age ≥65: +$2340). Conversely, in the index and post-index periods, costs for stage IV cancers were higher than recurrent cancer costs. Specifically, post-index period cost differences indicate higher costs for stage IV patients than for recurrent breast (Age < 65:+$683; Age ≥65: +$1172), colorectal (Age < 65:+$3104; Age ≥65: +$1557), and lung cancer patients (Age < 65:+$1136; Age ≥65: +$1103). Conclusions: Our study provides medical care cost estimates of recurrent and de novo stage IV cancers. Cost differences between recurrent and stage IV cancers reveal heterogeneity in care patterns that merits further investigation. The reported study costs, measured in capitated care systems using standardized fee-for-service reimbursement coefficients, may serve as a benchmark for stage-specific phase-of-care oncology episode payment models.

Impact of a Patient Navigator Program on Hospital-Based and Outpatient Utilization Over 180Days in a Safety-Net Health System.

With emerging global payment structures, medical systems need to understand longer-term impacts of care transition strategies. To determine the effect of a care transition program using patient navigators (PNs) on health service utilization among high-risk safety-net patients over a 180-day period. Randomized controlled trial conducted October 2011 through April 2013. Patients admitted to the general medicine service with ≥1 readmission risk factor: (1) age≥60; (2) in-network inpatient admission within prior 6months; (3) index length of stay ≥ 3days; or (4) admission diagnosis of heart failure or (5) chronic obstructive pulmonary disease. The analytic sample included 739 intervention patients, 1182 controls. Through hospital visits and 30days of post-discharge telephone outreach, PNs provided coaching and assistance with medications, appointments, transportation, communication with primary care, and self-care. Primary outcomes: (1) hospital-based utilization, a composite of ED visits and hospital admissions; (2) hospital admissions; (3) ED visits; and (4) outpatient visits. We evaluated outcomes following an index discharge, stratified by patient age (≥ 60 and < 60years), using a 180-day time frame divided into six 30-day periods. The PN program produced starkly different outcomes by patient age. Among older PN patients, hospital-based utilization was consistently lower than controls, producing an 18.7% cumulative decrease at 180days (p=0.038); outpatient visits increased in the critical first 30-day period (p=0.006). Among younger PN patients, hospital-based utilization was 31.7% (p=0.038) higher at 180days, largely reflecting sharply higher utilization in the initial 30days (p=0.002), with non-significant changes thereafter; outpatient visits experienced no significant changes. A PN program serving high-risk safety-net patients differentially impacted patients based on age, and among younger patients, outcomes varied over time. Our findings highlight the importance for future research to evaluate care transition programs among different subpopulations and over longer time periods.

Bundled Payment vs. Fee-for-Service: Impact of Payment Scheme on Performance

Healthcare reimbursements in the United States have been traditionally based on a fee-for-service (FFS) scheme, providing incentives for high volume of care, rather than efficient care. The new healthcare legislation tests new payment models that remove such incentives, such as the bundled payment (BP) system. We consider a population of patients (beneficiaries). The provider may reject patients based on the patient’s cost profile and selects the treatment intensity based on a risk-averse utility function. Treatment may result in success or failure, where failure means that unforeseen complications require further care. Our interest is in analyzing the effect of different payment schemes on outcomes such as the presence and extent of patient selection, the treatment intensity, the provider’s utility and financial risk, and the total system payoff. Our results confirm that FFS provides incentives for excessive treatment intensity and results in suboptimal system payoff. We show that BP could lead to suboptimal patient selection and treatment levels that may be lower or higher than desirable for the system, with a high level of financial risk for the provider. We also find that the performance of BP is extremely sensitive to the bundled payment value and to the provider’s risk aversion. The performance of both BP and FFS degrades when the provider becomes more risk averse. We design two payment systems, hybrid payment and stop-loss mechanisms, that alleviate the shortcomings of FFS and BP and may induce system optimum decisions in a complementary manner. This paper was accepted by Serguei Netessine, operations management.

Results of a Medicare Bundled Payments for Care Improvement Initiative for Chronic Obstructive Pulmonary Disease Readmissions.

Approximately 20% of Medicare beneficiaries hospitalized for acute exacerbations of chronic obstructive pulmonary disease (COPD) are readmitted within 30 days of discharge. In addition to implementing penalties for excess readmissions, the U.S. Centers for Medicare and Medicaid Services has developed Bundled Payments for Care Improvement (BPCI) initiatives to improve outcomes and control costs. To evaluate whether a comprehensive COPD multidisciplinary intervention focusing on inpatient, transitional, and outpatient care as part of our institution's BPCI participation would reduce 30-day all-cause readmission rates for COPD exacerbations and reduce overall costs. We performed a pre-postintervention study comparing all-cause readmissions and costs after index hospitalization for Medicare-only patients with acute exacerbation of COPD. The primary outcome was the difference in 30-day all-cause readmission rate compared with historical control subjects; secondary outcomes included the 90-day all-cause readmission rate and also health care costs compared with BPCI target prices. Seventy-eight consecutive Medicare patients were prospectively enrolled in the BPCI intervention in 2014 and compared with 109 patients in the historical group from 2012. Patients in BPCI were more likely to receive regular follow-up phone calls, pneumococcal and influenza vaccines, home health care, durable medical equipment, and pulmonary rehabilitation, and to attend pulmonary clinic. There was no difference in all-cause readmission rates at 30 days (BPCI, 12 events [15.4%] vs. non-BPCI, 19 events [17.4%]; P = 0.711), and 90 days (21 [26.9%] vs. 37 [33.9%]; P = 0.306). Compared with BPCI target prices, we incurred 4.3% lower 90-day costs before accounting for significant investment from the health system. A Medicare BPCI intervention did not reduce 30-day all-cause readmission rates or overall costs after hospitalization for acute exacerbation of COPD. Although additional studies enrolling larger numbers of patients at multiple centers may demonstrate the efficacy of our BPCI initiative for COPD readmissions, this is unlikely to be cost effective at any single center.

Modifiable risk factors and preoperative optimization of the primary total arthroplasty patient

The bundle payment system combined with the current medical utilization climate has placed pressure on surgeons to produce excellent results with early functional recovery and short hospital stays after total hip arthroplasty (THA). There is concern that patients with comorbidities may encounter difficulty finding a surgeon willing to perform elective arthroplasty because of their increased risk of complications. Treating modifiable preoperative risk factors can reduce postoperative complications, re-admission rates, length of hospital stay, and adverse surgical outcomes. In this article we review the recent literature on clinical strategies for improving modifiable risk factors to meet patient expectations and achieve good outcomes.

The Recent Losses in Medicare Imaging Revenues Experienced by Radiologists, Cardiologists, and Other Physicians

PurposeThe aim of this study was to assess recent trends in Medicare reimbursements to radiologists, cardiologists, and other physicians for noninvasive diagnostic imaging (NDI). MethodsThe Medicare Part B databases for 2002 to 2015 were the data source. These files provide total allowed payments for all NDI Current Procedural Terminology codes under the Medicare Physician Fee Schedule. Medicare specialty codes were used to identify payments to radiologists, cardiologists, and all other specialists. In additional to total reimbursements, those made for global, technical component, and professional component claims were studied. ResultsTotal reimbursements to physicians for NDI under the Medicare Physician Fee Schedule peaked at $11.936 billion in 2006. Over the ensuing years, the Deficit Reduction Act and other cuts reduced them by 33% to $8.005 billion in 2015. Reimbursements to radiologists peaked at $5.300 billion in 2006 but dropped to $4.269 billion by 2015 (−19.5%). NDI reimbursements to cardiologists dropped from $2.998 billion in 2006 to $1.653 billion by 2015 (−44.9%). Most other specialties also saw decreases over the study period. An important reason for the large decline for cardiologists was their dependence on global reimbursement, which saw a 50.5% drop from 2006 to 2015. Radiologists’ global payments also dropped sharply (40.4%), but radiologists themselves were somewhat protected by receiving a much larger proportion of their reimbursement for the professional component, which was not nearly as affected by Medicare payment reductions. ConclusionsThe Deficit Reduction Act and other NDI payment cuts that followed have created huge savings for the Medicare program but have led to sharp reductions in payments received by radiologists, cardiologists, and other physicians for those services.

Maternal Medical Complexity: Impact on Prenatal Health Care Spending among Women at Low Risk for Cesarean Section

BackgroundObstetric procedures are among the most expensive health care services, yet relatively little is known about health care spending among pregnant women, particularly the commercially-insured. ObjectiveThe objective of this study was to examine the association between maternal medical complexity, as a result of having one or more comorbid conditions, and health care spending during the prenatal period among a national sample of 95,663 commercially-insured women at low risk for cesarean delivery. MethodsWe conducted secondary analyses of 2010–2011 inpatient, outpatient, and professional claims for health care services from the Health Care Cost Institute. Allowed charges were summed for the prenatal and childbirth periods. Ordinary least squares regressions tested associations between maternal health conditions and health care expenditures during pregnancy. ResultsThirty-four percent of pregnant women had one or more comorbidities; 8% had two or more. Pregnant women with one or more comorbidities had significantly higher allowed charges than those without comorbidities (p < .001). Spending during the prenatal period was nearly three times higher for women with preexisting diabetes compared with women with no comorbid conditions. Average levels of prenatal period spending associated with maternal comorbidities were similar for women who had vaginal and cesarean deliveries. Patient characteristics accounted for 30% of the variance in prenatal period expenditures. ConclusionsThe impact of maternal comorbidities, and in particular preexisting diabetes, on prenatal care expenditures should be taken into account as provider payment reforms, such as pay-for performance incentives and bundled payments for episodes of care, extend to maternal and child health-related services.

Block-Chain: An Evolving Technology

Now a days, the people are attracting towards the digital currency due to demonetization, rapidly changing world, and global payment options etc. The industries are looking for such a technology which works in digital currency environments with the account of all the transactions. In this paper, we have discussed Blockchain technology, an evolving technology, which provides an assistance to the industries in digital currency environment with the record of each transaction. We have discuss the various types of blockchain with the core concept of hashing algorithm. We have discussed the application of blockchain in different industries and how it can make the significant impact on the business. The paper also focuses on the challenges of blockchain which are required to address before implementation. Therefore, this paper provides an insight on the blockchain technology with the fear and smile of beginning of new era of transparency.

Association Between Hospitals’ Engagement in Value-Based Reforms and Readmission Reduction in the Hospital Readmission Reduction Program

Medicare is experimenting with numerous concurrent reforms aimed at improving quality and value for hospitals. It is unclear if these myriad reforms are mutually reinforcing or in conflict with each other. To evaluate whether hospital participation in voluntary value-based reforms was associated with greater improvement under Medicare's Hospital Readmission Reduction Program (HRRP). Retrospective, longitudinal study using publicly available national data from Hospital Compare on hospital readmissions for 2837 hospitals from 2008 to 2015. We assessed hospital participation in 3 voluntary value-based reforms: Meaningful Use of Electronic Health Records; the Bundled Payment for Care Initiative episode-based payment program (BPCI); and Medicare's Pioneer and Shared Savings accountable care organization (ACO) programs. We used an interrupted time series design to test whether hospitals' time-varying participation in these value-based reforms was associated with greater improvement in Medicare's HRRP. Thirty-day risk standardized readmission rates for acute myocardial infarction (AMI), heart failure, and pneumonia. Among the 2837 hospitals in this study, participation in value-based reforms varied considerably over the study period. In 2010, no hospitals were participating in the meaningful use, ACO, or BPCI programs. By 2015, only 56 hospitals were not participating in at least 1 of these programs. Among hospitals that did not participate in any voluntary reforms, the association between the HRRP and 30-day readmission was -0.76 percentage points for AMI (95% CI, -0.93 to -0.60), -1.30 percentage points for heart failure (95% CI, -1.47 to -1.13), and -0.82 percentage points for pneumonia (95% CI, -0.97 to -0.67). Participation in the meaningful use program alone was associated with an additional change in 30-day readmissions of -0.78 percentage points for AMI (95% CI, -0.89 to -0.67), -0.97 percentage points for heart failure (95% CI, -1.08 to -0.86), and -0.56 percentage points for pneumonia (95% CI, -0.65 to -0.47). Participation in ACO programs alone was associated with an additional change in 30-day readmissions of -0.94 percentage points for AMI (95% CI, -1.29 to -0.59), -0.83 percentage points for heart failure (95% CI, -1.26 to -0.41), and -0.59 percentage points for pneumonia (95% CI, -1.00 to -0.18). Participation in multiple reforms led to greater improvement: participation in all 3 programs was associated with an additional change in 30-day readmissions of -1.27 percentage points for AMI (95% CI, -1.58 to -0.97), -1.64 percentage points for heart failure (95% CI, -2.02 to -1.26), and -1.05 percentage points for pneumonia (95% CI, -1.32 to -0.78). Hospital participation in voluntary value-based reforms was associated with greater reductions in readmissions. Our findings lend support for Medicare's multipronged strategy to improve hospital quality and value.

PD14-01 VARIATION IN 90-DAY EPISODE PAYMENTS FOR UROLOGICAL CANCER SURGERY: IMPLICATIONS FOR BUNDLED PAYMENT PROGRAMS

You have accessJournal of UrologyGeneral & Epidemiological Trends & Socioeconomics: Value of Care: Cost and Outcomes Measures I1 Apr 2017PD14-01 VARIATION IN 90-DAY EPISODE PAYMENTS FOR UROLOGICAL CANCER SURGERY: IMPLICATIONS FOR BUNDLED PAYMENT PROGRAMS Jonathan Li, Zaojun Ye, Hye Sung Min, Deborah Kaye, Lindsey Herrel, James Dupree, David Miller, and Chad Ellimoottil Jonathan LiJonathan Li More articles by this author , Zaojun YeZaojun Ye More articles by this author , Hye Sung MinHye Sung Min More articles by this author , Deborah KayeDeborah Kaye More articles by this author , Lindsey HerrelLindsey Herrel More articles by this author , James DupreeJames Dupree More articles by this author , David MillerDavid Miller More articles by this author , and Chad EllimoottilChad Ellimoottil More articles by this author View All Author Informationhttps://doi.org/10.1016/j.juro.2017.02.702AboutPDF ToolsAdd to favoritesDownload CitationsTrack CitationsPermissionsReprints ShareFacebookTwitterLinked InEmail INTRODUCTION AND OBJECTIVES Aiming to reduce variation in spending for common surgical procedures, Medicare and other payers have moved toward alternative reimbursement models such as episode-based bundled payments. However, little is known about the variation in 90-day episode spending for urological cancer surgery. METHODS Using linked SEER-Medicare data, we identified a study cohort that included all Medicare beneficiaries who underwent cystectomy, prostatectomy, or nephrectomy for cancer from 2008 through 2011. We then calculated total episode payments by aggregating hospital, physician, and post-acute care claims from the index surgical hospitalization through 90 days post-discharge. Total payments were then compared to examine hospital level-variation within each procedure type. Next, we evaluated differences in hospital, physician, and post-acute care payments between the highest and lowest spending quartiles based on mean total episode payments. Finally, we assessed the ″payment signatures″ among the most expensive hospitals for each condition. RESULTS From 2008 through 2011, we identified 90-day episodes of care for 1,768 cystectomies, 8,755 prostatectomies, and 4,305 nephrectomies. We observed wide variation in mean episode payments for all three conditions (cystectomy mean $31,836: range $22,322 to $41,706, prostatectomy mean $9,580: range $7,535 to $15,694, nephrectomy mean $16,554: range $10,857 to $25,675). For cystectomy, payments for the index hospitalization represented 50.1% of the total cost variation, whereas for prostatectomy the primary driver was physician fees (34.6%), and for nephrectomy post-acute care costs varied the greatest (37.7%). Each of the most expensive hospitals demonstrated a unique signature for the payment component that was driving high total episode payments (Figure). CONCLUSIONS Ninety-day episode payments for urological cancer surgery vary widely across hospitals in the United States. The key drivers of payment variation differ for individual procedures and hospitals. Accordingly, hospitals will need individualized data and clinical re-design strategies to succeed with implementation of episode-based payment models for urological cancer care. © 2017FiguresReferencesRelatedDetails Volume 197Issue 4SApril 2017Page: e276 Advertisement Copyright & Permissions© 2017MetricsAuthor Information Jonathan Li More articles by this author Zaojun Ye More articles by this author Hye Sung Min More articles by this author Deborah Kaye More articles by this author Lindsey Herrel More articles by this author James Dupree More articles by this author David Miller More articles by this author Chad Ellimoottil More articles by this author Expand All Advertisement Advertisement PDF downloadLoading ...

Episode-Based Payment and Direct Employer Purchasing of Healthcare Services: Recent Bundled Payment Innovations and the Geisinger Health System Experience.

One significant driver of the disjointed healthcare often observed in the United States is the traditional fee-for-service payment model which financially incentivizes the volume of care delivered over the quality and coordination of care. This problem is compounded by the wide, often unwarranted variation in healthcare charges that purchasers of health services encounter for substantially similar episodes of care. The last 10 years have seen many stakeholder organizations begin to experiment with novel financial payment models that strive to obviate many of the challenges inherent in customary quantity-based cost paradigms. The Patient Protection and Affordable Care Act has allowed many care delivery systems to partner with Medicare in episode-based payment programs such as the Bundled Payments for Care Improvement (BPCI) initiative, and in patient-based models such as the Medicare Shared Savings Program. Several employer purchasers of healthcare services are experimenting with innovative payment models to include episode-based bundled rate destination centers of excellence programs and the direct purchasing of accountable care organization services. The Geisinger Health System has over 10 years of experience with episode-based payment bundling coupled with the care delivery reengineering which is integral to its ProvenCare® program. Recent experiences at Geisinger have included participation in BPCI and also partnership with employer-purchasers of healthcare through the Pacific Business Group on Health (representing Walmart, Lowe's, and JetBlue Airways). As the shift towards value-focused care delivery and patient experience progresses forward, bundled payment arrangements and direct purchasing of healthcare will be critical financial drivers in effecting change.