Medicare's Bundled Payment Initiatives for Hospital-Initiated Episodes: Evidence and Evolution

Alternative payment models in Dutch hospital care: what works, how, why and under what circumstances? Protocol for a realist evaluation study

INTRODUCTION

The predominant provider payment models in healthcare, particularly fee-for-service, hinder the delivery of high-value care and can encourage healthcare providers to prioritise the volume of care over the value of care. To address these issues, healthcare providers, payers and policymakers are increasingly experimenting with alternative payment models (APMs), such as shared savings (SS) and bundled payment (BP). Despite a growing body of literature on APMs, there is still limited insight into what works in developing and implementing successful APMs, as well as how, why and under what circumstances. This paper presents the protocol for a study that aims to (1) identify these circumstances and reveal the underlying mechanisms through which outcomes are achieved and (2) identify transferrable lessons for successful APMs in practice.

METHODS AND ANALYSIS

Drawing on realist evaluation principles, this study will employ an iterative three-step approach to elicit a programme theory that describes the relationship between context, mechanisms and outcomes of APMs. The first step involves a literature review to identify the initial programme theory. The second step entails empirical testing of this theory via a multiple case study design including seven SS and BP initiatives in Dutch hospital care. We will use various qualitative and quantitative methods, including interviews with involved stakeholders, document analysis and difference-in-differences analyses. In the final step, these data and the applicable formal theories will be combined to test and refine the (I)PT and address the research objectives.

ETHICS AND DISSEMINATION

Ethical approval has been granted by the Research Ethics Review Committee of Erasmus School of Health Policy and Management (Project ID ETH2122-0170). Where necessary, informed consent will be obtained from study participants. Among other means, study results will be disseminated through a publicly available manual for stakeholders (eg, healthcare providers and payers), publications in peer-reviewed scientific journals and (inter)national conference presentations.

Global Economic Evaluation of the Reported Costs of Deep Brain Stimulation

INTRODUCTION

Despite the known benefits of deep brain stimulation (DBS), the cost of the procedure can limit access and can vary widely. Our aim was to conduct a systematic review of the reported costs associated with DBS, as well as the variability in reporting cost-associated factors to ultimately increase patient access to this therapy.

METHODS

A systematic review of the literature for cost of DBS treatment was conducted in accordance with the Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA) guidelines. PubMed and Embase databases were queried. Olsen & Associates (OANDA) was used to convert all reported rates to USD. Cost was corrected for inflation using the US Bureau of Labor Statistics Inflation Calculator, correcting to April 2022.

RESULTS

Twenty-six articles on the cost of DBS surgery from 2001 to 2021 were included. The median number of patients across studies was 193, the mean reported age was 60.5 ± 5.6 years, and median female prevalence was 38.9%. The inflation- and currency-adjusted mean cost of the DBS device was USD 21,496.07 ± USD 8,944.16, the cost of surgery alone was USD 14,685.22 ± USD 8,479.66, the total cost of surgery was USD 40,942.85 ± USD 17,987.43, and the total cost of treatment until 1 year of follow-up was USD 47,632.27 ± USD 23,067.08. There were no differences in costs observed across surgical indication or country.

CONCLUSION

Our report describes the large variation in DBS costs and the manner of reporting costs. The current lack of standardization impedes productive discourse as comparisons are hindered by both geographic and chronological variations. Emphasis should be put on standardized reporting and analysis of reimbursement costs to better assess the variability of DBS-associated costs in order to make this procedure more cost-effective and address areas for improvement to increase patient access to DBS.

The end of an era? Activity-based funding based on diagnosis-related groups: A review of payment reforms in the inpatient sector in 10 high-income countries

CONTEXT

Across the member countries of the Organisation for Economic Co-Operation and Development, policy makers are searching for new ways to pay hospitals for inpatient care to move from volume to value. This paper offers an overview of the latest reforms and their evidence to date.

METHODS

We reviewed reforms to DRG payment systems in 10 high-income countries: Australia, Austria, Canada (Ontario), Denmark, France, Germany, Norway, Poland, the United Kingdom (England), and the United States.

FINDINGS

We identified four reform trends among the observed countries, them being (1) reductions in the overall share of inpatient payments based on DRGs, (2) add-on payments for rural hospitals or their exclusion from the DRG system, (3) episode-based payments, which use one joint price to pay providers for all services delivered along a patient pathway, and (4) financial incentives to shift the delivery of care to less costly settings. Some countries have combined some or all of these measures with financial adjustments for quality of care. These reforms demonstrate a shift away from activity and efficiency towards a diversified set of targets, and mirror efforts to slow the rise in health expenditures while improving quality of care. Where evaluations are available, the evidence indicates mixed success in improving quality of care and reducing costs and expenditures.

Ongoing Challenges With Price Transparency in Hospital Charges for Hand Procedures

In 2020, the Centers for Medicare & Medicaid Services issued a historic rule on price transparency that aimed to better inform Americans about their health care costs by requiring hospitals to publicly provide pricing information on their items and services. In this review article, we describe the current gaps in transparency that persist after the implementation of the rule, from incomplete pricing files to noncompliance despite the issuance of monetary penalties by Centers for Medicare & Medicaid Services. Price transparency is vital for hand and upper extremity procedures, given their cost variation and patient desire for more financial discussions with their physicians regarding these procedures. Further improvements and interventions by various stakeholders are necessary to improve the current state of hospital price transparency and cost information for these patients and for anyone who seeks to make informed health care decisions. Policymakers should enforce stronger financial interventions and penalties and promote the use of bundled payments to facilitate better compliance by hospitals through a more expanded and accessible display of health care service costs. To help increase health care financial literacy among consumers, hand surgeons and hospital staff should engage in more dialog regarding health care prices and financial considerations with their patients.

Effect of a health system payment and quality improvement programme for tonsillectomy in Ontario, Canada: an interrupted time series analysis

BACKGROUND

Tonsillectomy is among the most common and cumulatively expensive surgical procedures in children, with known variations in quality of care. However, evidence on health system interventions to improve quality of care is limited. The Quality-Based Procedures (QBP) programme in Ontario, Canada, introduced fixed episode hospital payment per tonsillectomy and disseminated a perioperative care pathway. We determined the association of this payment and quality improvement programme with tonsillectomy quality of care.

METHODS

Interrupted time series analysis of children undergoing elective tonsillectomy at community and children's hospitals in Ontario in the QBP period (1 April 2014 to 31 December 2018) and the pre-QBP period (1 January 2009 to 31 January 2014) using health administrative data. We compared the age-standardised and sex-standardised rates for all-cause tonsillectomy-related revisits within 30 days, opioid prescription fills within 30 days and index tonsillectomy inpatient admission.

RESULTS

111 411 children underwent tonsillectomy: 51 967 in the QBP period and 59 444 in the pre-QBP period (annual median number of hospitals, 86 (range 77-93)). Following QBP programme implementation, revisit rates decreased for all-cause tonsillectomy-related revisits (0.48 to -0.18 revisits per 1000 tonsillectomies per month; difference -0.66 revisits per 1000 tonsillectomies per month (95% CI -0.97 to -0.34); p<0.0001). Codeine prescription fill rate continued to decrease but at a slower rate (-4.81 to -0.11 prescriptions per 1000 tonsillectomies per month; difference 4.69 (95% CI 3.60 to 5.79) prescriptions per 1000 tonsillectomies per month; p<0.0001). The index tonsillectomy inpatient admission rate decreased (1.12 to 0.23 admissions per 1000 tonsillectomies per month; difference -0.89 (95% CI -1.33 to -0.44) admissions per 1000 tonsillectomies per month; p<0.0001).

CONCLUSIONS

The payment and quality improvement programme was associated with several improvements in quality of care. These findings may inform jurisdictions planning health system interventions to improve quality of care for tonsillectomy and other paediatric procedures.

Factors Influencing the Introduction of Value-Based Payment in Integrated Stroke Care: Evidence from a Qualitative Case Study

Background

To address issues related to suboptimal insight in outcomes, fragmentation, and increasing costs, stakeholders are experimenting with value-based payment (VBP) models, aiming to facilitate high-value integrated care. However, insight in how, why and under what circumstances such models can be successful is limited. Drawing upon realist evaluation principles, this study identifies context factors and associated mechanisms influencing the introduction of VBP in stroke care.

Methods

Existing knowledge on context-mechanism relations impacting the introduction of VBP programs (in real-world settings) was summarized from literature. These relations were then tested, refined, and expanded based on a case study comprising interviews with representatives from organizations involved in the introduction of a VBP model for integrated stroke care in Rotterdam, the Netherlands.

Results

Facilitating factors were pre-existing trust-based relations, shared dissatisfaction with the status quo, regulatory compatibility and simplicity of the payment contract, gradual introduction of down-side risk for providers, and involvement of a trusted third party for data management. Yet to be addressed barriers included friction between short- and long-term goals within and among organizations, unwillingness to forgo professional and organizational autonomy, discontinuity in resources, and limited access to real-time data for improving care delivery processes.

Conclusions

Successful payment and delivery system reform require long-term commitment from all stakeholders stretching beyond the mere introduction of new models. Careful consideration of creating the 'right' contextual circumstances remains crucially important, which includes willingness among all involved providers to bear shared financial and clinical responsibility for the entire care chain, regardless of where care is provided.

Value-Based Purchasing Design And Effect: A Systematic Review And Analysis

During the past two decades in the United States, all major payer types-commercial, Medicare, Medicaid, and multipayer coalitions-have introduced value-based purchasing (VBP) contracts to reward providers for improving health care quality while reducing spending. This systematic review qualitatively characterized the financial and nonfinancial features of VBP programs and examined how such features combine to create a level of program intensity that relates to desired quality and spending outcomes. Higher-intensity VBP programs are more frequently associated with desired quality processes, utilization measures, and spending reductions than lower-intensity programs. Thus, although there may be reasons for payers and providers to opt for lower-intensity programs (for example, to increase voluntary participation), these choices apparently have consequences for spending and quality outcomes.

How Value is Determined in Health Care

The ability to assess the value of various health-care activities, processes, and outcomes is critical for decision making and essential to maintain the fidelity of value-based payment mechanisms. However, value is subjective and differs by perspective, context, and situation. Furthermore, the complex nature of health-care delivery and payment complicates efforts to determine the value of individual components or interventions. While a variety of methods exist to quantify and compare value, none have been able to fully capture value for all stakeholders. As an alternative, a general framework that guides how one should define, measure, and interpret value would provide some needed consistency for those looking to assess value while allowing for enough flexibility to address different perspectives, situations, and evaluation goals.

Bundled Payment Episodes Initiated by Physician Group Practices: Medicare Beneficiary Perceptions of Care Quality

BACKGROUND

The Bundled Payments for Care Improvement (BPCI) initiative incentivizes participating providers to reduce total Medicare payments for an episode of care. However, there are concerns that reducing payments could reduce quality of care.

OBJECTIVE

To assess the association of BPCI with patient-reported functional status and care experiences.

DESIGN

We surveyed a stratified random sample of Medicare beneficiaries with BPCI episodes attributed to participating physician group practices, and matched comparison beneficiaries, after hospitalization for one of the 18 highest volume clinical episodes. The sample included beneficiaries discharged from the hospital from February 2017 through September 2017. Beneficiaries were surveyed approximately 90 days after their hospital discharge. We estimated risk-adjusted differences between the BPCI and comparison groups, pooled across all 18 clinical episodes and separately for the five largest clinical episodes.

PARTICIPANTS

Medicare beneficiaries with BPCI episodes (n=16,898, response rate=44.5%) and comparison beneficiaries hospitalized for similar conditions selected using coarsened exact matching (n=14,652, response rate=46.2%).

MAIN MEASURES

Patient-reported functional status, care experiences, and overall satisfaction with recovery.

KEY RESULTS

Overall, we did not find differences between the BPCI and comparison respondents across seven measures of change in functional status or overall satisfaction with recovery. Both BPCI and comparison respondents reported generally positive care experiences, but BPCI respondents were less likely to report positive care experience for 3 of 8 measures (discharged at the right time, -1.2 percentage points (pp); appropriate level of care, -1.8 pp; preferences for post-discharge care taken into account, -0.9 pp; p<0.05 for all three measures).

CONCLUSIONS

The proportion of respondents with favorable care experiences was smaller for BPCI than comparison respondents. However, we did not detect differences in self-reported change in functional status approximately 90 days after hospital discharge, indicating that differences in care experiences did not affect functional recovery.

Paying for value: options for value-based payment reform in Australia

Value-based health care has gained increasing prominence among funders and providers in efforts to improve the outcomes important to patients relative to the resources used to deliver care. In Australia, the value-based healthcare agenda has focused on reducing the use of 'low-value' interventions, redesigning models of care to improve integration between providers and increasing the use of patient-reported measures to drive improvement; all have occurred within existing payment structures. In this paper we describe options for value-based payment reform and highlight two challenges critical for success: attributing financial risk fairly and organisational structures.What is known about the topic?'Fee for service' is the dominant payment method in Australia and creates incentives to increase service volume, rewarding inputs rather than improvements in longer-term health outcomes. There is increasing recognition that payment reform is needed to support the shift to value-based health care in Australia.What does this paper add?This paper describes the three main options for value-based payment reform: episode-based bundled payments chronic condition bundled payments and comprehensive capitation payments. Each involves some degree of funds pooling, and the shifting of risk from the funder to provider to stimulate the more efficient use of resources.What are the implications for practitioners?We conclude that local hospital authorities in the states, private health insurers and primary health networks could implement reform as payment holders, but that capacity development in coordination and risk adjustment will be required. Successful implementation of payment reform will also require investment in data collection and information technology to track patients' care and measure outcomes and costs.

The Hidden Pandemic: the Cost of Postoperative Complications

Purpose of Review

Population-based increases in ageing and medical co-morbidities are expected to substantially increase the incidence of expensive postoperative complications. This threatens the sustainability of essential surgical care, with negative impacts on patients' health and wellbeing.

Recent Findings

Identification of key high-risk areas, and implementation of proven cost-effective strategies to manage both outcome and cost across the end-to-end journey of the surgical episode of care, is clearly feasible. However, good programme design and formal cost-effectiveness analysis is critical to identify, and implement, true high value change.

Summary

Both outcome and cost need to be a high priority for both fundholders and clinicians in perioperative care, with the focus for both groups on delivering high-quality care, which in itself, is the key to good cost management.

An Economic Perspective on the Affordable Care Act: Expectations and Reality

The Affordable Care Act (ACA) was enacted in 2010 to address both high uninsured rates and rising health care spending through insurance expansion reforms and efforts to reduce waste. It was expected to have a variety of impacts in areas within the purview of economics, including effects on health care coverage, access to care, financial security, labor market decisions, health, and health care spending. To varying degrees, legislative, executive, and judicial actions have altered its implementation, affecting the extent to which expectations in each of these dimensions have been realized. We review the ACA's reforms, the subsequent actions that countered them, and the expected and realized effects on coverage, access to care, financial security, health, labor market decisions, and health care spending.