PBGH expands bundled payment program with hospitals

The Pacific Business Group on Health (PBGH) has expanded a value-based purchasing program to include one of the priciest procedures that occurs in a hospital--spinal surgeries.

PBGH's Employers Centers of Excellence Network steers the employees of participating companies to specific providers for high-cost procedures, such as knee and hip replacements. The providers receive bundled payments for the care provided. Since last year, 586 patients have undergone hip and knee replacement surgeries, according to data furnished to FierceHealthFinance by PBGH. The organization expanded the program to include spinal procedures earlier this month, Becker's Spine Review reported.

Spinal surgeries are among the most expensive medical procedures in healthcare. And while the number of Americans undergoing such surgeries continues to grow, the evidence is unclear as to their benefit. 

And the practice is also apparently ripe for financial disclosures that are opaque at best, as well as potential fraud. A Southern California hospital owner pleaded guilty last year to billing as much as $500 million for spinal procedures after paying kickbacks and bribing lawmakers in the process. Hospitals in also California also received tens of millions of dollars in double payments for spinal surgeries. And in 2010, the Wall Street Journal reported that five spinal surgeons working at Norton Hospital in Louisville, Kentucky, reaped millions in royalty payments by using screws they had helped to develop to implant in each other's patients.

The hospitals that will provide the spinal surgeries to the PBGH participating employers include Geisinger Medical Center in Danville, Pennsylvania, Mercy Hospital in Springfield, Missouri, and Virginia Mason Medical Center in Seattle, according to a statement. PBGH said that four employers--including national retailers Wal-Mart and Lowe's--participate in the program.

"We vigorously evaluated the participating hospitals' experience in evidence-based medicine and use of consistently applied patient appropriateness criteria to ensure that participating employees are receiving higher quality care," PBGH Chief Executive Officer David Lansky said in the statement.

To learn more:
- read the Becker's Spine Review article 
- check out the PBGH announcement (.pdf)

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