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  • Analysis of Hospital System's LE Joint Replacement Bundling Programs Reveals Significant Drop in Expenditures

    In brief:

    • Analysis of Medicare payments related to 3,942 LE joint replacements in a 5-hospital network participating in voluntary bundling programs between 2008 and 2015.
    • During study period, average expenditures on replacements without complications dropped by 20.8%; expenditures on replacements with complications dropped by 13.8%.
    • Treatment population, severity of illness, and outcomes remained stable during study period; volume rose steadily.
    • Just over half (50.2%) of the savings were related to reduced in-hospital costs—predominantly due to a 30% reduction in the cost of implants. The remaining 48.8% of savings were related to a decreased use of IRFs and SNFs.
    • Use of home health care (including physical therapy in that setting) increased by 9% during study period.

    It may be too soon to judge the cost-effectiveness of Center for Medicare and Medicaid Services' (CMS) mandatory hip and knee replacement bundling programs, but if the experience of 1 hospital system that participated in earlier voluntary programs is any indication, facilities have reason to expect overall Medicare expenditures to drop, say authors of a new study. Their analysis of nearly 4,000 patients who participated in bundling programs between 2008 and 2015 revealed an average 20.8% reduction in expenditures for joint replacements without complications, with the bulk of those savings due to reduced implant prices and the decreased use of institutional postacute care.

    The study, published in JAMA Internal Medicine (abstract only available for free), tracked Medicare claims related to lower extremity joint replacement among patients in the Baptist Health System (BHS), a 5-hospital network in San Antonio, Texas. During the study period, from 2008 to 2015, BHS participated in 2 voluntary bundling programs offered by CMS—the Acute Care Episode (ACE) demonstration, and later, the major joint replacement of the lower extremity (MJRLE) bundle offered through the Bundled Payment for Care Improvement (BCPI) program. A total of 3,942 patients (average age 72.4) participated in the programs.

    Researchers found that between 2008 and 2015, average Medicare episode payments for joint replacements without complications decreased from $26,785 to $21,208—a 20.8% drop during a time period in which nationwide payments rose by 5%. Among the 204 cases with complications, expenditures were reduced by 13.8% on average, from $38,537 to $33,216. Authors of the study say that patient age, proportion of male patients, and severity of illness did not change significantly during that time; however, volume did rise steadily, from 192 to 246 episodes per quarter.

    Authors cite 2 major factors contributing to the savings: first, BHS was able to find less expensive implants that brought the price down by nearly 30% during the study period, (a change that accounted for 80.5% of all in-hospital savings). Second, BHS reduced spending on inpatient rehabilitation facilities (IRFs) and skilled nursing facilities (SNFs) by 54% and 24.3%, respectively. In the end, the savings associated with internal hospital cost reductions represented 51.2% of overall savings, and decreased use of IRFs and SNFs represented the remaining 48.8%.

    According to the authors, the overall BHS results may be related to the amount of experience the system has with bundling, which allowed it to build "data infrastructure and an orthopedic working group to track hospital and [postacute care] variation." Another important factor: something authors call "organizational and market characteristics" that included the "availability of home-based services such as physical therapy allowing BHS to safely reduce institutional [postacute care]." During the study period, per-episode spending on home health care rose by 9%.

    The BHS move away from institutional postacute care has not escaped notice: in 2015, National Public Radio featured the BHS bundling model, reporting that "the loss to the nursing homes and other post-discharge providers was [BHS'] gain."

    Authors of the study acknowledge the limitations associated with a focus on only 1 hospital system, but assert that their study "provides important data for hospitals implementing joint replacement bundles," particularly under the CMS Comprehensive Care for Joint Replacement (CJR) model now required in 67 metropolitan areas.

    In that sense, authors say, the BHS study could be a catalyst for large-scale changes.

    "If such approaches are successfully implemented on a broad scale with similar results, the magnitude of savings that could accrue to Medicare—and possibly private payers—would be substantial," authors write. "In turn, the success of CJR participants could accelerate the shift toward bundled payments for more conditions and procedures."

    Research-related stories featured in PT in Motion News are intended to highlight a topic of interest only and do not constitute an endorsement by APTA. For synthesized research and evidence-based practice information, visit the association's PTNow website.


    • While it is great that the hospital was able to save Medicare's money, I would be interested in knowing the results for the patients themselves. Were they able to return to their prior level of function? Did their joint AROM improve as readily? Did other functional measurements improve to baseline? There is more to rehab than just saving dollars.

      Posted by Nathan on 2/15/2017 3:46 PM

    • Great for (outcome) saving the almighty dollar. Does the research show outcomes for the patient? Rom, home exercise program adherence, how many times a week does the patient actually get therapy? My experience is people generally do not adhere to home ex program. Also, speaking to return customers, the feedback is not always glowing (mostly) about home therapy. That can dissected in many ways; therapist not good. Patient non adherence etc.

      Posted by Peter on 2/15/2017 7:24 PM

    • What we are experiencing in our hospital is that one physician group is now not ordering HHPT or OPPT services for THA. For TKA the push is for OPPT only and it appears their organization may be fining physicians for not following organizational criteria

      Posted by Wendy Lance -> =KR_BJ on 2/15/2017 9:26 PM

    • I have searched the internet for outcomes related to all the above and there seems to be little info available re the effectiveness of Physical therapy compared to outcomes with out Physical therapy in the home or in OP related to total knee patients.Am I looking for this info in the wrong place or is there a need for more studies the show us?

      Posted by David J Stearns on 2/16/2017 11:04 AM

    • I would love to read the entire article and see how the researchers are defining "complications". I feel this refers solely to infection and/or failure of the implant and has little or nothing to do with actual return to function for the patient.

      Posted by Leonard on 2/16/2017 12:57 PM

    • While I agree with the questions about outcomes, I do feel that therapists need to accept that more and longer isn't always better. The current payment system has rewarded overutilization too long. Think about it, currently new grads are more valuable than the experienced PTs who are more concise, efficient and skilled. I would love to get paid by diagnosis - with appropriate modifiers attached. Finally, the more experienced and skilled clinicians would be justly valued.

      Posted by Andrew McDonnell on 2/20/2017 5:54 PM

    • I believe one of the biggest reasons patients aren't committed to their home program is many if not most PTs give them 10-15 exercises to do when 2 or 3 will enable remarkable changes and outcomes meaningful to patients.

      Posted by Ed Scott PT, DPT, OCS on 2/20/2017 7:37 PM

    • Our surgeon is expecting almost all of his patients to go do OPPT following joint replacement. He is doing the quad sparing and anterior hip approach so the outcomes are above average in a shorter length of time. We have developed an exercise class that is mandatory for all his patients to attend. If the candidate for surgery does not show proof of attendance he will not schedule the surgery. Patients are getting out of the hospital the next day and start OP therapy immediately after and are doing very well, with good functional mobility, ROM, flexibility and strength.

      Posted by Magali Bobe on 2/22/2017 3:52 PM

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