Bundled Payments Cut Costs for Hip, Knee Replacement

January 9, 2020

A new study is the first systematic review of bundled payment programs administered by CMS.

Bundled payment programs maintain or improve quality while lowering costs for hip and knee replacement, according to a new study.

However, “there is no evidence of benefit for other clinical episodes at the present time” like heart attacks or congestive heart failure, according to the study, published in Health Affairs, which is the first systematic review of bundled payment programs administered by CMS.

It was conceived and led by the Center for Health Reform, which performs rapid, rigorous, systematic reviews to solve high-impact health policy problems.

“Given that CMS and the Trump administration are considering new bundled payment models as part of a shift toward value-based care, we felt that an objective evaluation of the existing literature would be of interest to policy makers, researchers, executives, and clinicians,” says lead study author Rajender Agarwal, MD, MPH, MBA, director, Center for Health Reform, Southlake, Texas.

Related: A Look at the Two Sides of Bundled Payments

For the study, Agarwal and colleagues reviewed 20 existing studies that evaluated the impact of bundled payments on healthcare spending, utilization, and quality, through search and screening processes that fit our inclusion criteria.

“We included all prospective or retrospective studies that compared a bundled payment approach with a fee-for-service reimbursement control group,” Agarwal says.

It is important for healthcare executives to understand that ‘while bundled payment has yielded favorable results for lower extremity joint replacement, it has yet to demonstrate similar benefits for other clinical episodes’ like medical conditions, according to Agarwal.

“A likely reason for this is that patients undergoing elective joint replacement ‘tend to be younger, with lower rates of poverty and disability than patients with medical conditions included in bundled payment’,” he says. “Healthcare executive may want to consider restricting participation ‘to those clinical episodes that may be an appropriate fit for such payment models.’”

Also, bundled payment was not associated with cost savings for conditions with higher patient complexity, such as spinal fusion procedures, according to the study.

It is possible that “given the penalty for cases that exceed the bundled payment target price, providers may be reluctant to accept these patients, which could in turn lead to decreased access to care,” according to the study.