Physician group practices participating in the Bundled Payments for Care Improvement (BPCI) Initiative garnered cost savings for the top five conditions that require medical intervention but did not save money for the top five surgical procedures.
On the other hand, hospitals participating in the BPCI initiative saved money for both categories, according to a study in JAMA Health Forum.
Researchers at the University of Pennsylvania said their findings underscore the “suitability of hospitals to bundled payment models, specifically highlighting their relative advantage over group practices in achieving cost and potential quality outcomes for medical conditions.”
How hospitals perform in bundled payment arrangements has been looked at often; the authors of this study wanted to focus on physicians in bundled payment arrangements, which has been studied far less. Their findings don’t concur with the assumption that physician group practices might be more successful in reducing spending via population-based payment methods.
The bundled payment structure reimburses a group of healthcare providers treating a patient for the same or a related problem rather than paying each individual clinician for specific tests, procedures or treatments.
“To coordinate participation in future payment models, policymakers must understand the dynamics of PGP vs hospital performance, particularly given the evidence from other payment models indicating that physician groups may perform differently than hospitals in managing quality and costs,” the study said.
Researchers looked at the top five medical episodes in terms of utilization: congestive heart failure, pneumonia, sepsis, chronic obstructive pulmonary disease and other respiratory problems. They also examined the top five surgical procedures performed: lower extremity joint replacement, hip and femur procedures except for major joint, percutaneous coronary intervention, upper extremity joint replacement and spinal fusion.
The results for handling post-acute care differed between group practices and hospitals. “For example, for medical episodes, hospital participation in BPCI was significantly associated with reductions in length of stay at skilled nursing facilities, whereas PGP participation was not,” the study said. “For surgical episodes, PGP participation in BPCI was associated with reductions in home health use, whereas hospital participation was not.”
The Centers for Medicare & Medicaid Services launched BPCI in 2013 to encourage provider cooperation that would hopefully lead to cost savings in the treatment of Medicare beneficiaries, noting that paying each provider for separate services creates fragmented care because of minimal coordination among providers.
University of Pennsylvania researchers conducted a cohort study featuring a differences-in-differences analysis with data collected from Medicare claims for 1,288,781 from Jan. 1, 2011, through Dec. 31, 2017. They analyzed the data from Jan. 1, 2020, to May 31, 2022.
The study found that physician group practices might save money with changes in approaches to readmissions and post-acute care utilization. They might want to look at how hospitals approach these issues, the researchers said.
For hospitals, “medical episode savings were associated with reductions in length of stay within skilled nursing facilities, whereas surgical episode cost savings came from fewer discharges to skilled nursing facilities.”
Another challenge involves measuring quality. “Although differential mortality reductions were observed by this study, there was also evidence of observable and unobservable favorable patient selection under bundled payments,” the researchers wrote. “This makes definitive conclusions regarding changes in health care quality challenging.”
The authors concluded that “policymakers should consider the comparative performance of participant type when designing and evaluating future bundled payment models.”