Study Finds New Medicare Payment Model Connected to Cost Savings

January 2017 ~

A new study published in JAMA Internal Medicine, concludes Medicare’s Comprehensive Care for Joint Replacement Model is linked to substantial cost savings without any reducing quality of care.

The study investigates the effects of bundled payments for joint replacements at Baptist Health System, which began testing bundled payments in 2008. Researchers at the University of Pennsylvania’s Perelman School of Medicine and New York University School of Medicine examined costs and quality for joint replacements performed between 2008 and 2015 among 3,738 Medicare beneficiaries who had no significant preexisting complications.

It was found that, following the adoption of bundled payments, the system saw joint replacement costs fell while care quality remained consistent. As well, Baptist Health’s average cost for a joint replacement plus 30 days of post-acute care (PAC) dropped by about 21% – from $26,785 in 2008 to $21,208 in 2015.

The researchers attributed this primarily to declines in the average per-case cost of artificial joints and PAC spending. According to the researchers, the hospital system reduced the average per-case cost of an artificial joint by a 29% reduction of $2,000 by using what Baptist’s surgeons determined to be the least costly medically equivalent implants. After PAC was incorporated into the bundled payment model in 2013, Baptist Health’s per-case PAC decreased by more than $2,400 – a 27% reduction.

Performance on quality metrics remained consistent or improved, according to the report. Researchers state that patients at Baptist Health were no more likely than patients nationwide to be readmitted or require emergency care. And at the same time, extended hospital stays declined by 67% even as the severity of patient conditions stayed the same.

The researchers estimated that if every hospital adopted the bundled payment model, Medicare would save $2 billion annually.


Source(s): American Health Line; JAMA; American Health Line; Kaiser Health News;