Bundled payment project saved $1M in first year

The jury still remains out on many bundled payment programs, but one such effort by Baptist Health in San Antonio and the Centers for Medicare & Medicaid Services (CMS) saved more than $1 million during its first year of operation, according to a CMS report on the project.

The bundled payment project was centered on one of the most common and often expensive surgical procedures--joint replacements. Under the pilot with CMS, Baptist received a lump sum for each procedure priced at 3 percent below what it normally received from Medicare to perform the procedures, according to the report. If it kept costs below that threshold and maintained high-quality outcomes, Baptist got to keep the difference.

One of the biggest challenges was getting Baptist Health's orthopedic surgeons to work closely with the hospital. "Hospitals and doctors don't trust each other. There's not an orthopedic surgeon out there that trusts his hospital. You can't find one. If you do, he's lying," David Fox, M.D., a Baptist Health surgeon, told Kaiser Health News.

However, in this case the two sides reluctantly worked together. Changes to in-hospital processes saved nearly $300 per patient, according to the CMS report, and resulted in savings of about $1.1 million based on the number of patients that received treatment through the treatment bundle.

Baptist Health also took hard looks at nearly automatic referrals for physical therapy, home nurse visits and nursing homes. Such referrals account for nearly half the cost of a joint replacement procedure. Instead, under the pilot program the patient was more likely to receive therapy at home. The health system also re-examined the use of particular blood thinners, compression stockings and canes for each patient.

Along with the savings, patients also recovered more quickly and were less likely to be readmitted to the hospital due to post-surgical complications, according to the CMS report.

However, a separate report by the Lewin Group was less conclusive about the success of bundled payment projects, concluding that few moved the needle on quality and outcomes. The conflicting and unclear data is likely among the reasons providers remain uncertain about joining such initiatives.

To learn more:
- check out the CMS report (.pdf)
- read the Kaiser Health News article

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