The Path Ahead for Bundled Payments

Value-Based Health Care in Perioperative Medicine: Process Maps and Costing to Determine Best Practices

Perioperative care in the United States is largely based on current fee-for-service models. Fee-for-service models are not based on the true cost of services provided, charges do not equal costs, and reimbursement varies based on insurer. Value-based health care is defined as patient-centered outcomes over cost of providing these services. Process mapping and time-driven activity-based costing can be used to define actual cost of services provided. Outcomes after discharge can be measured, so that the overall value of care provided can be assessed and improved based on the outcomes and costs identified.

Value-based Reimbursement as a Mechanism to Achieve Social and Financial Impact in the Healthcare System

Value-based reimbursement strategies have been considered in the continuous search for establishing a sustainable healthcare system. For models that have been already implemented, success is demonstrated according to specific details of the patients' consumption profile based on their clinical condition and the risk balance among all the stakeholders. From fee-for-service to value-based bundled payment strategies, the manner in which accurate patient-level cost and outcome information are used varies, resulting in different risk agreements between stakeholders. A thorough understanding of value-based reimbursement agreements that views such agreements as a mechanism for risk management is critical to the task of ensuring that the healthcare system generates social impacts while ensuring financial sustainability. This perspective article focuses on a critical analysis of the impact of value-based reimbursement strategies on the healthcare system from a social and financial perspective. A critical analysis of the literature about value-based reimbursement was used to identify how these strategies impact healthcare systems. The literature analysis was followed by the conceptual description of value-based reimbursement agreements as mechanisms for achieving social and financial impacts on the healthcare system. There is no single successful path toward payment reform. Payment reform is used as a strategy to re-engineer the way in which the system is organized to provide care to patients, and its successful implementation leads to cultural, social, and financial changes. Stakeholders have reached consensus regarding the claim that the use of value reimbursement strategies and business models could increase efficiency and generate social impact by reducing healthcare inequity and improving population health. However, the successful implementation of such new strategies involves financial and social risks that require better management by all the stakeholders. The use of cutting-edge technologies are essential advances to manage these risks and must be paired with strong leadership focusing on the directive to improve population health and, consequently, value. Payment reform is used as a mechanism to re-engineer how the system is organized to deliver care to patients, and its successful implementation is expected to result in social and financial modifications to the healthcare system.

Variation in Ischemic Stroke Payments in the USA: A Medicare Beneficiary Study

INTRODUCTION

The growing cost of stroke care has created the need for outcome-oriented and cost-saving payment models. Identifying imbalances in the current reimbursement model is an essential step toward designing impactful value-based reimbursement strategies. This study describes the variation in reimbursement fees for ischemic stroke management across the USA.

METHODS

This Medicare Fee-For-Service claims study examines USA beneficiaries who suffered an ischemic stroke from 2021Q1 to 2022Q2 identified using the Medicare-Severity Diagnosis-Related Groups (MS-DRGs). Demographic national and regional US data were extracted from the Census Bureau. The MS-DRG codes were grouped into four categories according to treatment modality and clinical complexity. Our primary outcome of interest was payments made across individual USA and US geographic regions, assessed by computing the mean incremental payment in cases of comparable complexity. Differences between states for each MS-DRG were statistically evaluated using a linear regression model of the logarithmic transformed payments.

RESULTS

227,273 ischemic stroke cases were included in our analysis. Significant variations were observed among all DRGs defined by medical complexity, treatment modality, and states (p < 0.001). Differences in mean payment per case with the same MS-DRG vary by as high as 500% among individual states. Although higher payment rates were observed in MS-DRG codes with major comorbidities or complexity (MCC), the variation was more expressive for codes without MCC. It was not possible to identify a standard mean incremental fee at a state level. At a regional level, the Northeast registered the highest fees, followed by the West, Midwest, and South, which correlate with poverty rates and median household income in the regions.

CONCLUSIONS

The payment variability observed across USA suggests that the current reimbursement system needs to be aligned with stroke treatment costs. Future studies may go one step further to evaluate accurate stroke management costs to guide policymakers in introducing health policies that promote better care for stroke patients.

Performance of Physician Groups and Hospitals Participating in Bundled Payments Among Medicare Beneficiaries

Importance

Hospital participation in bundled payment initiatives has been associated with financial savings and stable quality of care. However, how physician group practices (PGPs) perform in bundled payments compared with hospitals remains unknown.

Objectives

To evaluate the association of PGP participation in the Bundled Payments for Care Improvement (BPCI) initiative with episode outcomes and to compare these with outcomes for participating hospitals.

Design, Settings, and Participants

This cohort study with a difference-in-differences analysis used 2011 to 2018 Medicare claims data to compare the association of BPCI participation with episode outcomes for PGPs vs hospitals providing medical and surgical care to Medicare beneficiaries. Data analyses were conducted from January 1, 2020, to May 31, 2022.

Exposures

Hospitalization for any of the 10 highest-volume episodes (5 medical and 5 surgical) included in the BPCI initiative for Medicare patients of participating PGPs and hospitals.

Main Outcomes and Measures

The primary outcome was 90-day total episode spending. Secondary outcomes were 90-day readmissions and mortality.

Results

The total sample comprised data from 1 288 781 Medicare beneficiaries, of whom 696 710 (mean [SD] age, 76.2 [10.8] years; 432 429 [59.7%] women; 619 655 [85.5%] White individuals) received care through 379 BPCI-participating hospitals and 1441 propensity-matched non-BPCI-participating hospitals, and 592 071 (mean [SD] age, 75.4 [10.9] years; 527 574 [86.6%] women; 360 835 [59.3%] White individuals) received care from 6405 physicians in BPCI-participating PGPs and 24 758 propensity-matched physicians in non-BPCI-participating PGPs. For PGPs, BPCI participation was associated with greater reductions in episode spending for surgical (difference, -$1368; 95% CI, -$1648 to -$1088) but not for medical episodes (difference, -$101; 95% CI, -$410 to $206). Hospital participation in BPCI was associated with greater reductions in episode spending for both surgical (-$1010; 95% CI, -$1345 to -$675) and medical (-$763; 95% CI, -$1139 to -$386) episodes.

Conclusions and Relevance

This cohort study and difference-in-differences analysis of PGPs and hospital participation in BPCI found that bundled payments were associated with cost savings for surgical episodes for PGPs, and savings for both surgical and medical episodes for hospitals. Policy makers should consider the comparative performance of participant types when designing and evaluating bundled payment models.