Making Medicare's Hip and Knee Replacement Bundles Work

Laird Harrison


April 28, 2016

In This Article

Reducing the Cost of Surgical Care

One of the best ways of reducing costs is to send patients home as quickly as possible after surgery and avoid or shorten convalescence in skilled nursing facilities, Dr Barber says. "It can't be done just by the hospital; it has to come from the physician, because the physicians are dealing with the skilled nursing facilities."

Likewise, patient surveys are typically filled out in the doctor's office, so surgeons will need to be involved at that stage, says Dr Barber.

Surgeons can prepare for the new collaborations with hospitals by focusing on ways to get patients home quickly after their procedures. "There are lot of ways to do that," he says. "Usually it's around good physical therapy, patient expectations, and postoperative instruction."

The preparations could be useful for any orthopedic surgeons who take part in bundled payments through another Medicare program: the alternative payment models offered through the Medicare Access and CHIP [Children's Health Insurance Program] Reauthorization Act of 2015.[4]

Across the United States, about 35% of patients go to skilled nursing facilities after hip and knee replacements. At Kaiser Permanente in California, Geisinger Medical Center in Pennsylvania, and Intermountain Healthcare in Utah—integrated systems that are experienced in the kind of care delivery that bundling encourages—the proportion is closer to 10%, he says.

Tweaking the Bundling Program

CJR could be improved in a couple of key ways, says Dr Barber. First, he says, CMS should allow orthopedists to contract with hospitals on measures to reduce costs and improve quality in the inpatient portion of hip and knee surgery.

Even though the episode of care encompasses inpatient services, CMS only allows contracts between hospitals and surgeons to address post-acute care, he says. "The doctor can't profit from working with the hospital to make things better in the hospital space."

Second, Dr Barber says, CJR should take into consideration socioeconomic factors that could make some patients more expensive to care for than others. For example, patients from low-income neighborhoods typically need more care, perhaps because they have fewer of their own resources to use in improving their health.

That complaint has cropped up in other bundled payment models as well. The Cleveland Clinic in Cleveland, Ohio, began experimenting with a different Medicare bundled program for hip and knee replacements in the last quarter of 2013 at its Euclid campus, says Carlos Higuera-Rueda, MD, an orthopedic surgeon at the clinic.

The clinic entered into the program under CMS's Bundled Payments for Care Improvement (BPCI), a set of four alternative pilot programs aimed at finding the best way to implement bundled payments.[5] The BPCI bundle that Cleveland Clinic chose includes the preoperative workup, the hospital stay, any care provided for 30 days after the surgery, and any additional treatment for complications associated with the procedure needed after the 30 days.

Cleveland Clinic approached the new arrangement by developing a "care pack" of guidelines and recommendations for everyone involved in its hip and knee replacements. It includes referring patients with diabetes to endocrinologists, patients with obesity to weight-loss programs, and patients who smoke to smoking cessation programs, all before surgery.

The surgery team began planning more carefully for procedures, reducing time in the operating room. Protocols for the use of antibiotics got updates, and so did procedures for discharging patients.

The approach is working, says Dr Higuera. A higher proportion of patients have gone home rather than to nursing homes. Readmissions, infections, and costs all decreased.


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