Without waiting for CMS's new bundled payments model, UPMC launched its own initiative to accelerate its transition away from fee-for-service care. Physician buy-in and data are key.
Earlier this month, the Centers for Medicare & Medicaid Services proposed a new reimbursement model that would hold hospitals financially accountable for the quality of the care they deliver for inpatient hip and knee replacements—from surgery through recovery for Medicare beneficiaries.
The Comprehensive Care for Joint Replacement Model is a bundled payment structure designed to improve cost, quality, and care coordination between hospitals, physicians, and post-acute care providers throughout an entire episode of care.
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Tami Minnier |
According to CMS, Medicare beneficiaries received 400,000 inpatient, first-time hip and knee replacement procedures in 2013, costing more than $7 billion just for the hospitalization. Quality, outcomes, and complications—such as infections, implant failures, and 90-day readmissions—varied widely by region and hospital.
"This proposed model is designed to support HHS efforts to drive the healthcare system towards better quality care, smarter spending, and healthier people by driving forward care transformation and payment reform for a major surgery experienced by many patients," CMS said in its proposal.
While some healthcare executives have expressed concerns about the disruptive effects of the new model, other hospitals and health systems have moved ahead with bundled payments for orthopedic procedures without waiting for a government mandate.
Finding Joy in Bundled Payments
Bundled Payments Already in Place at UPMC
At Pittsburgh-based UPMC, the $10 billion integrated health enterprise with 21 hospitals and more than 5,100 licensed beds, bundled payments for orthopedic procedures are well under way. The program launched in 2013 with hip and knee surgeries, and it extended to spine surgeries at the beginning of this year.
"Consumers are demanding higher-quality healthcare at lower costs, and healthcare providers that cannot deliver that will not be around in the future," Tami Minnier, UPMC's chief quality officer, told me recently.
"We believe that bundled payments are one mechanism for achieving this alignment of incentives around high-quality, high-value care."
Through its insurance entity, UPMC Health Plan, UPMC has determined the average cost per procedure and created bundled payments to encourage physicians to reduce costs and improve quality.
"We are really trying to change our payment models as much as we can from volume to value and are really trying to transform our network to something that isn't based on fee-for-service or RVUs anymore," says Tom Aubel, director of medical payment strategy and policy at UPMC Health Plan.
"If [physicians] come in under the average cost, they can reap that benefit financially. As they are spending less, they are making more. It's a pretty basic design."
Achieving Physician Buy-in
UPMC's physicians have generally supported the bundled payment model, Minnier says, because they are invested in doing what is best for their patients.
"Creation of these bundles is driven by our physicians, who are highly engaged in understanding and measuring the quality and cost of care. They understand and care deeply about the physical and financial well-being of their patients, so it has been relatively easy to win their support for this process."
For physicians who have been hesitant to make the transition, there will ultimately be a financial incentive, Aubel says, as the bundled payment model is eventually redesigned to include some risk.
"Since there is no downside risk and they are only seeing the positives now, there is less motivation for some [physicians] to get onboard. But, at some point, we plan to move toward downside risk," he says.
Data is Essential
To gain the physician support necessary for the bundled payment model to yield substantial results, they need actionable data that can be used for clinical decision-making, Aubel says.
"What we found very quickly as we did the hip and knee bundle is that the most important part of it is to provide timely and accurate data to our physicians. If we didn't provide the why and how through the data, it would be useless to do the program."
UPMC uses a third-party vendor to minimize processing time and create reliable information, he says.
"We started off doing a manual process, which was very tedious and time-consuming and left a lot of room for error. We knew that if we are going to expand [bundled payments] to include more providers and hospitals, we would need to find something to make the process easier, quicker, and cleaner."
Using the vendor has "allowed us to really cut down on the time for the process to create meaningful data to provide to our physicians," Aubel says.
Having access to timely data "also supports our process of evidence-based pathways that guide the care and report outcomes," Minnier adds.
Changing Care Processes While Protecting Quality
Throughout UPMC's efforts around bundled payments, the number-one concern has been care quality, Aubel says. "On top of everything is quality. Physicians have to meet certain quality indicators in order to receive the financial incentives."
"All of our alternative payments, such as shared savings and bundles, include quality measures to ensure that patient outcomes are high," Minnier says.
Value-based reimbursements have prompted physicians to ask questions about surgery and follow-up care and to collaborate with each other in order to improve outcomes, Aubel says.
"They are looking at all the services they provide and trying to see if there are opportunities for improvement."
While this newfound level of communication is leading to some reduction in care variation, Aubel notes that altering medical practices is a difficult process that can take time to achieve.
"We are seeing some standardization of care, but we are not talking about changing the way you play golf. … Making changes to [clinical care] is not always as easy as it sounds."
A Classroom for a Value-Based Future
Bundled payment models are being rolled out to UPMC physicians in part, Aubel says, to help the organization prepare as the healthcare industry moves away from fee-for-service toward value-based reimbursements.
"One reason for getting into bundled payments is cost savings and looking for higher quality. We have the ability to teach our providers how to do this now so when the Aetnas and Uniteds of the world want to do this with our physicians, we'll be ready," he says.
"We are using this as sort of a classroom as much as a program for reimbursements."
Rene Letourneau is a contributing writer at HealthLeaders Media.