Episode-of-Care Characteristics and Costs for Hip and Knee Replacement Surgery in Hospitals Belonging to the High Value Healthcare Collaborative Compared With Similar Hospitals in the Same Health Care Markets.
ABSTRACT: To inform consumers and restrain health care cost growth, efforts to promote transparency and to reimburse for care episodes are accelerating in the United States.To compare characteristics and costs of 30-day episode of care for hip and knee replacement occurring in High Value Healthcare Collaborative (HVHC)-member hospitals to those occurring in like non-HVHC-member hospitals in the same 15 health care markets before interventions by HVHC members to improve health care value for those interventions.This is a retrospective analysis of fee-for-service Medicare data from 2012 and 2013.For hip arthroplasty, 4030 HVHC-member and 7572 non-HVHC-member, and for knee arthroplasty, 6542 HVHC-member and 13,900 non-HVHC-member fee-for-service Medicare patients aged 65 and older.Volumes, patient demographics, hospital stay characteristics, and acute and postacute care standardized costs for a 30-day episode of care.HVHC-member hospitals differed from similar non-HVHC-member hospitals in the same health care markets when considering volumes of surgeries, patient demographics, Charlson scores, and patient distance to care during the index admission. There was little variation in acute care costs of hip or knee replacement surgery across health care markets; however, there was substantial variation in postacute care costs across those same markets. We saw less variation in postacute care costs within markets than across markets. Regression analyses showed that HVHC-member status was not associated with shorter lengths of stay, different complication rates, or lower total or postacute care costs for hip or knee replacement.Health care regions appear to be a more important predictor of episode costs of care than HVHC status.
Project description:The rising popularity of episode-based payment models for surgery underscores the need to better understand the drivers of variability in spending on postacute care. Examining postacute care spending for fee-for-service Medicare beneficiaries after three common surgical procedures in the period 2009-12, we found that it varied widely between hospitals in the lowest versus highest spending quintiles for postacute care, with differences of 129 percent for total hip replacement, 103 percent for coronary artery bypass grafting (CABG), and 82 percent for colectomy. Wide variation persisted after we adjusted for the intensity of postacute care. However, the variation diminished considerably after we adjusted instead for postacute care setting (home health care, outpatient rehabilitation, skilled nursing facility, or inpatient rehabilitation facility): It decreased to 16 percent for hip replacement, 4 percent for CABG, and 21 percent for colectomy. Health systems seeking to improve surgical episode efficiency should collaborate with patients to choose the highest-value postacute care setting.
Project description:<h4>Importance</h4>Medicare's Comprehensive Care for Joint Replacement (CJR) model rewards or penalizes hospitals on the basis of meeting spending benchmarks that do not account for patients' preexisting social and medical complexity or high expenses associated with serving disadvantaged populations such as dual-eligible patients (ie, those enrolled in both Medicare and Medicaid). The CJR model may have different implications for hospitals serving a high percentage of dual-eligible patients (termed high-dual) and hospitals serving a low percentage of dual-eligible patients (termed low-dual).<h4>Objective</h4>To examine changes associated with the CJR model among high-dual or low-dual hospitals in 2016 to 2017.<h4>Design, setting, and participants</h4>This cohort study comprised 3 analyses of high-dual or low-dual hospitals (n?=?1165) serving patients with hip or knee joint replacements (n?=?768?224) in 67 treatment metropolitan statistical areas (MSAs) selected for CJR participation and 103 control MSAs. The study used Medicare claims data and public reports from 2012 to 2017. Data analysis was conducted from February 1, 2019, to August 31, 2019.<h4>Exposures</h4>The CJR model holds participating hospitals accountable for the spending and quality of care during care episodes for patients with hip or knee joint replacement, including hospitalization and 90 days after discharge.<h4>Main outcomes and measures</h4>The primary outcomes were total episode spending, discharge to institutional postacute care facility, and readmission within the 90-day postdischarge period; bonus and penalty payments for each hospital; and reductions in per-episode spending required to receive a bonus for each hospital.<h4>Results</h4>In total, 1165 hospitals (291 high-dual and 874 low-dual) and 768?224 patients with joint replacement (494?013 women [64.3%]; mean [SD] age, 76  years) were included. An episode-level triple-difference analysis indicated that total spending under the CJR model decreased at high-dual hospitals (by $851; 95% CI, -$1556 to -$146; P?=?.02) and low-dual hospitals (by $567; 95% CI, -$933 to -$202; P?=?.003). The size of decreases did not differ between the 2 groups (difference, -$284; 95% CI, -$981 to $413; P?=?.42). Discharge to institutional postacute care settings and readmission did not change among both hospital groups. High-dual hospitals were less likely to receive a bonus compared with low-dual hospitals (40.3% vs 59.1% in 2016; 56.9% vs 76.0% in 2017). To receive a bonus, high-dual hospitals would be required to reduce spending by $887 to $2231 per episode, compared with only $89 to $215 for low-dual hospitals.<h4>Conclusions and relevance</h4>The study found that high- and low-dual hospitals made changes in care after CJR implementation, and the magnitude of these changes did not differ between the 2 groups. However, high-dual hospitals were less likely to receive a bonus for spending cuts. Spending benchmarks for CJR would require high-dual hospitals to reduce spending more substantially to receive a financial incentive.
Project description:OBJECTIVE:To examine changes in more and less discretionary condition-specific postacute care use (skilled nursing, inpatient rehabilitation, home health) associated with Medicare accountable care organization (ACO) implementation. DATA SOURCES:2009-2014 Medicare fee-for-service claims. STUDY DESIGN:Difference-in-difference methodology comparing postacute outcomes after hospitalization for hip fracture and stroke (where rehabilitation is fundamental to the episode of care) to pneumonia, (where it is more discretionary) for beneficiaries attributed to ACO and non-ACO providers. PRINCIPAL FINDINGS:Across all 3 cohorts, in the baseline period ACO patients were more likely to receive Medicare-paid postacute care and had higher episode spending. In hip fracture patients where rehabilitation is standard of care, ACO implementation was associated with 6%-8% increases in probability of admission to a skilled nursing facility or inpatient rehabilitation (compared with home without care), and a slight reduction in readmissions. In a clinical condition where rehabilitation is more discretionary, pneumonia, ACO implementation was not associated with changes in postacute location, but episodic spending decreased 2%-3%. Spending decreases were concentrated in the least complex patients. Across all cohorts, the length of stay in skilled nursing facilities decreased with ACO implementation. CONCLUSIONS:ACOs decreased spending on postacute care by decreasing use of discretionary services. ACO implementation was associated with reduced length of stay in skilled nursing facilities, while hip fracture patients used institutional postacute settings at higher rates. Among pneumonia patients, we observed decreases in spending, readmission days, and mortality associated with ACO implementation.
Project description:BACKGROUND:In 2016, Medicare implemented Comprehensive Care for Joint Replacement (CJR), a national mandatory bundled-payment model for hip or knee replacement in randomly selected metropolitan statistical areas. Hospitals in such areas receive bonuses or pay penalties based on Medicare spending per hip- or knee-replacement episode (defined as the hospitalization plus 90 days after discharge). METHODS:We conducted difference-in-differences analyses using Medicare claims from 2015 through 2017, encompassing the first 2 years of bundled payments in the CJR program. We evaluated hip- or knee-replacement episodes in 75 metropolitan statistical areas randomly assigned to mandatory participation in the CJR program (bundled-payment metropolitan statistical areas, hereafter referred to as "treatment" areas) as compared with those in 121 control areas, before and after implementation of the CJR model. The primary outcomes were institutional spending per hip- or knee-replacement episode (i.e., Medicare payments to institutions, primarily to hospitals and post-acute care facilities), rates of postsurgical complications, and the percentage of "high-risk" patients (i.e., patients for whom there was an elevated risk of spending - a measure of patient selection). Analyses were adjusted for the hospital and characteristics of the patients and procedures. RESULTS:From 2015 through 2017, there were 280,161 hip- or knee-replacement procedures in 803 hospitals in treatment areas and 377,278 procedures in 962 hospitals in control areas. After the initiation of the CJR model, there were greater decreases in institutional spending per joint-replacement episode in treatment areas than in control areas (differential change [i.e., the between-group difference in the change from the period before the CJR model], -$812, or a -3.1% differential decrease relative to the treatment-group baseline; P<0.001). The differential reduction was driven largely by a 5.9% relative decrease in the percentage of episodes in which patients were discharged to post-acute care facilities. The CJR program did not have a significant differential effect on the composite rate of complications (P=0.67) or on the percentage of joint-replacement procedures performed in high-risk patients (P=0.81). CONCLUSIONS:In the first 2 years of the CJR program, there was a modest reduction in spending per hip- or knee-replacement episode, without an increase in rates of complications. (Funded by the Commonwealth Fund and the National Institute on Aging of the National Institutes of Health.).
Project description:To determine the effect of competition in postacute care (PAC) markets on resource intensity and outcomes of care in inpatient rehabilitation facilities (IRFs) after prospective payment was implemented.Medicare claims, Provider of Services file, Enrollment file, Area Resource file, Minimum Data Set.We created an exogenous measure of competition based on patient travel distances and used instrumental variables models to estimate the effect of competition on inpatient rehabilitation costs, length of stay, and death or institutionalization.A file was constructed linking data for Medicare patients discharged from acute care between 2002 and 2003 and admitted to an IRF with a diagnosis of hip fracture or stroke.Competition had different effects on treatment intensity and outcomes for hip fracture and stroke patients. In the treatment of hip fracture, competition increased costs and length of stay, while increasing rates of death or institutionalization. In the treatment of stroke, competition decreased costs and length of stay and produced inferior outcomes.The effects of competition in PAC markets may vary by condition. It is important to study the effects of competition by diagnostic condition and to study the effects across populations that vary in severity. Our finding that higher competition under prospective payment led to worse IRF outcomes raises concerns and calls for additional research.
Project description:The Comprehensive Care for Joint Replacement (CJR) model introduced in 2016 aims to improve the quality and costs of care for Medicare beneficiaries undergoing hip and knee replacements. However, there are concerns that the safety-net hospitals that care for the greatest number of vulnerable patients may perform poorly in CJR. In this study we used Medicare's CJR data to evaluate the performance of 792 hospitals mandated to participate in the first year of CJR. We found that in comparison to non-safety-net hospitals, 42 percent fewer safety-net hospitals qualified for rewards based on their quality and spending performance (33 percent of safety-net hospitals qualified, compared to 57 percent of non-safety-net hospitals), and safety-net hospitals' rewards per episode were 39 percent smaller ($456 compared to $743). Continuation of this performance trend could place safety-net hospitals at increased risk of penalties in future years. Medicare and hospital strategies such as those that reward high-quality care for vulnerable patients could enable safety-net hospitals to compete effectively in CJR.
Project description:<h4>Background</h4>The study examined the cost variation across 29 high-volume US hospitals and their affiliated orthopaedic surgeons for delivering a primary total knee arthroplasty without major complicating conditions. The hospitals had similar patient demographics, and more than 80% of them had statistically-similar Medicare risk-adjusted readmission and complication rates.<h4>Methods</h4>Hospital and physician personnel costs were calculated using time-driven activity-based costing. Consumable supply costs, such as the prosthetic implant, were calculated using purchase prices, and postacute care costs were measured using either internal costs or external claims as reported by each hospital.<h4>Results</h4>Despite having similar patient demographics and readmission and complication rates, the average cost of care for total knee arthroplasty across the hospitals varied by a factor of about 2 to 1. Even after adjusting for differences in internal labor cost rates, the hospital at the 90th percentile of cost spent about twice as much as the one at the 10th percentile of cost.<h4>Conclusions</h4>The large variation in costs among sites suggests major and multiple opportunities to transfer knowledge about process and productivity improvements that lower costs while simultaneously maintaining or improving outcomes.
Project description:Aiming to align provider incentives toward improving quality and efficiency, the Center for Medicare and Medicaid Services is considering broader bundling of hospital and physician payments around episodes of inpatient surgery. Decisions about bundled payments would benefit from better information about how payments are currently distributed among providers of different perioperative services and how payments vary across hospitals.Using the national Medicare database, we identified patients undergoing one of four inpatient procedures in 2005 (coronary artery bypass [CABG], hip fracture repair, back surgery, and colectomy). For each procedure, price-standardized Medicare payments from the date of admission for the index procedure to 30 days postdischarge were assessed and categorized by payment type (hospital, physician, and postacute care) and subtype.Average total payments for inpatient surgery episodes varied from U.S.$26,515 for back surgery to U.S.$45,358 for CABG. Hospital payments accounted for the largest share of total payments (60-80 percent, depending on procedure), followed by physician payments (13-19 percent) and postacute care (7-27 percent). Overall episode payments for hospitals in the lowest and highest payment quartiles differed by U.S.$16,668 for CABG, U.S.$18,762 for back surgery, U.S.$10,615 for hip fracture repair, and U.S.$12,988 for colectomy. Payments to hospitals accounted for the largest share of variation in payments. Among specific types of payments, those associated with 30-day readmissions and postacute care varied most substantially across hospitals.Fully bundled payments for inpatient surgical episodes would need to be dispersed among many different types of providers. Hospital payments--both overall and for specific services--vary considerably and might be reduced by incentives for hospitals and physicians to improve quality and efficiency.
Project description:In the National Pilot Program on Payment Bundling, a subset of Medicare providers will receive a single payment for an episode of acute care in a hospital, followed by postacute care in a skilled nursing or rehabilitation facility, the patient's home, or other appropriate setting. This article examines the promises and pitfalls of bundled payments and addresses two important design decisions for the pilot: which conditions to include, and how long an episode should be. Our analysis of Medicare data found that hip fracture and joint replacement are good conditions to include in the pilot because they exhibit strong potential for cost savings. In addition, these conditions pose less financial risk for providers than other common ones do, so including them would make participation in the program more appealing to providers. We also found that longer episode lengths captured a higher percentage of costs and hospital readmissions while adding little financial risk. We recommend that the Medicare pilot program test alternative design features to help foster payment innovation throughout the health system.
Project description:OBJECTIVE:Examine readmission patterns over 90-day episodes of care in persons discharged from hospitals to post-acute settings. DESIGN:Retrospective cohort study. SETTING:Acute care hospitals. PARTICIPANTS:Medicare fee-for-service enrollees (N = 686,877) discharged from hospitals to post-acute care in 2013-2014. The cohort included beneficiaries >65 years of age hospitalized for stroke, joint replacement, or hip fracture and who survived for 90 days following discharge. MEASUREMENTS:90-day unplanned readmissions. RESULTS:The cohort included 127,680 individuals with stroke, 442,195 undergoing joint replacement, and 117,002 with hip fracture. Thirty-day readmission rates ranged from 3.1% for knee replacement patients discharged to home health agencies (HHAs) to 14.4% for hemorrhagic stroke patients discharged to skilled nursing facilities (SNFs). Ninety-day readmission rates ranged from 5.0% for knee replacement patients discharged to HHAs to 26.1% for hemorrhagic stroke patients discharged to SNFs. Differences in readmission rates decreased between stroke subconditions (hemorrhagic and ischemic) and increased between joint replacement subconditions (knee, elective hip, and nonelective hip) from 30 to 90 days across all initial post-acute discharge settings. CONCLUSIONS:We observed clear patterns in readmissions over 90-day episodes of care across post-acute discharge settings and subconditions. Our findings suggest that patients with hemorrhagic stroke may be more vulnerable than those with ischemic over the first 30 days after hospital discharge. For patients receiving nonelective joint replacements, readmission prevention efforts should start immediately after discharge and continue, or even increase, over the 90-day episode of care.