Amol S. Navathe

Cost of Joint Replacement Using Bundled Payment Models

Importance Medicare launched the mandatory Comprehensive Care for Joint Replacement bundled payment model in 67 urban areas for approximately 800 hospitals following its experience in the voluntary Acute Care Episodes (ACE) and Bundled Payments for Care Improvement (BPCI) demonstration projects. Little information from ACE and BPCI exists to guide hospitals in redesigning care for mandatory joint replacement bundles. Objective To analyze changes in quality, internal hospital costs, and postacute care (PAC) spending for lower extremity joint replacement bundled payment episodes encompassing hospitalization and 30 days of PAC. Design, Setting, and Participants This observational study followed 3942 total patients with lower extremity joint replacement at Baptist Health System (BHS), which participated in ACE and BPCI. Exposures Lower extremity joint replacement surgery under bundled payment at BHS. Main Outcomes and Measures Average Medicare payments per episode, readmissions, emergency department visits, prolonged length of stay, and hospital savings from changes in internal hospital costs and PAC spending. Results Overall, 3942 patients (mean [SD] age, 72.4 [8.4] years) from BHS were observed. Between July 2008 and June 2015, average Medicare episode expenditures declined 20.8%, from

Physician Peer Comparisons as a Nonfinancial Strategy to Improve the Value of Care

26u2009785 to

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21u2009208 (Pu2009<u2009.001) for 3738 episodes of joint replacement without complications. It declined 13.8% from

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38u2009537 to

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33u2009216 (Pu2009=u2009.61) for 204 episodes of joint replacement with complications. Readmissions and emergency department visits declined 1.4% (Pu2009=u2009.14) and 0.9% (Pu2009=u2009.98), respectively, while episodes with prolonged length of stay decreased 67.0% (Pu2009<u2009.001). Patient illness severity remained stable. By 2015, 51.2% of overall hospital savings had come from internal cost reductions and 48.8% from PAC spending reductions. Reductions in implant costs, down on average

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1920.68 (29%) per case, contributed the greatest proportion of hospital savings. Average PAC spending declined

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2443.12 (27%) per case, largely from reductions in inpatient rehabilitation and skilled nursing facility spending but only when bundles included financial responsibility for PAC. Conclusions and Relevance During a period in which Medicare payments for joint replacement episodes increased by 5%, bundled payment for procedures at BHS was associated with substantial hospital savings and reduced Medicare payments. Decreases in PAC spending occurred only when it was included in the bundle.

Association of Hospital Participation in a Medicare Bundled Payment Program With Volume and Case Mix of Lower Extremity Joint Replacement Episodes

The trend toward accountable care and risk-based payment is focusing health insurers and health care organizations on increasing the value of care. Typically, financial incentives in value-based models, such as penalties for hospital readmissions, apply at the organization level. Given the limited number of patients per physician with any particular condition, value-based financial incentives often do not reflect the care of individual physicians. Furthermore, there is significant concern about the effectiveness of extrinsic financial incentives because they may crowd out the intrinsic motivation of physicians. Consequently, even though health care organizations are likely to align financial incentives through behaviorally designed changes in physician compensation, they are also likely to implement nonfinancial ways to transform physician practice.1

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The Precision Medicine Initiative’s advances may add complexity to delivering high-quality, cost-effective care in keeping with patients’ values. A complementary effort could investigate delivery-system interventions that are tailored to individual needs and wishes.

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National policies, including the Medicare Access and CHIP [Children’s Health Insurance Program] Reauthorization Act of 2015, attempt to improve US health care by paying health systems and clinicians for value rather than volume of care. All payment systems, however, are susceptible to unintended consequences, and reimbursing physicians based on cost and quality outcomes may harm patients if financial and nonfinancial motivations are in conflict with each other. Physicians are ideally motivated by factors beyond personal compensation, including providing care that aligns with patient well-being and professional standards. In turn, strategies that encourage physicians to practice high-value care need not always consist of monetary payments as done in pay-forperformance. One promising approach is to use social comparisons to influence physician behavior. Social comparisons provide individuals with comparative feedback on their own performance relative to that of their peers. For example, physicians reduced inappropriate antibiotic prescriptions when ranked against peers.1 Patient ratings of physician quality also improved when this information was displayed transparently online, allowing both the physicians and public to compare results for individual physicians.2 Based on such results, social comparisons have been promoted as a key policy mechanism for advancing value-based care.3 However, the evidence base for using social comparisons among physicians, in which they are shown individual performance data compared with that of their peers, remains mixed. Comparisons on quality incentives led British physicians to exclude more patients from pay-for-performance programs.4 Public reporting of percutaneous revascularization outcomes was associated with higher acute myocardial infarction mortality predominantly in high-risk patients not selected for revascularization, a finding likely driven by increased risk avoidance by physicians.5 These examples reveal that social comparisons can produce both desired and undesired effects and that more research on their design is needed. How can policy makers and organizational leadership implement social comparisons while safeguarding against unintended harms? In this Viewpoint, we examine evidence from other industries for insights that can inform the use of social comparisons among physicians. In particular, one important step—pairing social comparison feedback explicitly with professional norms—could help achieve these goals and produce policies that are scalable and patient centered. Pairing Social Comparisons With Group Norms First, studies outside of health care affirm that social comparisons can sometimes produce unintended behaviors. For example, in experiments that provided individuals with information comparing their energy usage to that of their neighbors and communities, high users of energy decreased their usage. However, these gains were offset by increased consumption by low users who were emboldened by the knowledge that many neighbors had higher consumption.6 Second, these studies also highlight how behavior can be modified by “normative appeals”—statements that reflect value judgements about the appropriateness of certain behaviors. Although comparison data offer insight into how things are, normative statements emphasize how they ought to be. In the energy usage studies, efficiency improved uniformly among all users only when individuals were also given “grades” about the appropriateness of consumption (eg, great, good, or bad). In studies aimed at eliminating excessive water consumption, norm-based appeals were associated with reductions among highuse individuals.7 Third, work from other industries reveals that the combination of social comparisons and normative appeals can produce longer-run behavior change. In the water consumption studies, for example, individuals maintained sustained reductions when exposed to both comparison information and normative statements. Whereas normative appeals may produce short-lived behavior changes (eg, watering outdoors less), the addition of comparative feedback is more likely to produce more durable changes (eg, investing in water-saving technologies). Norms may help explain the mixed evidence about social comparisons in health care. In the case of publicly reported information about percutaneous revascularization outcomes, which was not accompanied by clear guidance about the appropriateness of patient selection, comparison feedback seemed to both improve and adversely affect quality. New incentives created by the ability to compare performance among physicians performing revascularization procedures led some to game the system by preferentially selecting patients with less severe disease. In contrast, the intervention to reduce antibiotic prescriptions explicitly combined social comparisons with professional norms about appropriateness. Rather than simply ranking physicians based on prescription rates— which does not inherently convey appropriateness— the intervention used the electronic ordering system to prompt physicians with messages when antibiotics were “inappropriate” and “generally not indicated.” VIEWPOINT