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Ready or Not, Here Come Bundled Payments

Analysis  |  By Tinker Ready  
   March 10, 2016

The mandatory shift to bundled payments for hip and knee replacements is a huge and complicated job for hospitals. "There is really no good blueprint" for it, says one surgeon. But it has to has to happen, and it and will.

In a few weeks, CMS will launch its long-planned mandatory program of bundled payments for hip and knee replacements.  The goal is to "encourage hospitals, physicians, and post-acute care providers to work together to improve the quality and coordination of care from the initial hospitalization through recovery."

Sounds nice, unless it's you who has to actually implement all the pieces that must work together and the coordination of care. A new survey of more than 100 hospital orthopedic departments found that 56% reported feeling unprepared for the new program, and only 10% reported feeling fully prepared.

Ready or not, it's coming.

In reality, bundled payments have been a long time coming. After much discussion, the rule was proposed last summer. It was finalized in November, with a January start date that was later moved to April 1.

So, why aren't hospitals ready?  Are they in denial or just overwhelmed? Or, are they chipping away at it while the plan is phased in?

The survey was conducted by Function and Outcomes Research for Comparative Effectiveness in Total Joint Replacement or FORCE-TJR, a clinical registry based at the University of Massachusetts Medical School. One of a group of registries collecting data in the US, it describes itself as an "independent, unbiased, expert data collection, analysis, and reporting system to guide best total joint replacement surgical practices."

It's no wonder that they've seen a surge of calls from hospitals interested in their services. That's what inspired the survey, said Patricia Franklin, MD, a UMass orthopedist and principal investigator for the FORCE-TJR registry project.  

"It occurred to us that people are doing their homework now, so they are probably not prepared," she said.  Hospitals need to know that "this is coming and it's coming fast."

Getting ready for such a change is a huge undertaking, Franklin says. UMass Medical School is not one of the nearly 800 hospitals that will be enrolled; it's already accepting bundled payments. But it signed on to participate voluntarily through the Bundled Payment for Care Improvement (BPCI) pilot initiative.  

So, Franklin says she's seen all the work that goes into setting up one of these programs. Among other tasks, it requires hospitals to "amp up information systems to answer the cost and quality questions needed to manage well in this environment," she says.

'A Coalition of the Willing'
Many of the hospitals that participated in the BPCI already had much of the clinical and data infrastructure they needed to pull off the shift, said Kevin Bozic, MD, a surgeon at the University of Texas at Austin. He studies value-based care and orthopedics. Bozic, who is also chair of the school's surgery and perioperative care department, calls those hospitals "a coalition of the willing."

"We figured out we can do this in the places that were prepared," he said. "But what about the places that are not prepared? How are we going to bring them along, because they will just stay in the fee-for- service world forever unless they have some incentive to move."

"Move" might be an understatement.  Everyone I talked to about bundled payments offered a long list of clinical and data programs that need to be in place to make this work.  Bozic said it took two years to set up the program at UT.  

It's not that hospitals don't have their acts together, Franklin said.  

"It is a new paradigm," she said. "Your hospital could have a great financial system for monitoring your in-house costs and utilization, but when you are trying to understand the 30- 90-day period, you probably didn't collect the total cost of the nursing home or ER visits. It is very much a new information infrastructure."

That's something her group is willing to help out with. FORCE-TJR has tracked more than 25,000 patients and their surgeons who are already using an episode management system that includes data on patient reported outcomes (PRO)—one of three measures CMS will use to assess quality. The group offers to use its benchmarks to help hospitals assess their readiness for the new program.

They have lots of competition. The changes brought about by the ACA have birthed an army of consultants willing to help hospitals figure out how to collect and crunch data. Those who offer help on the CJR bundles staffed booths at the American Association of Orthopedic Surgeons meeting. They advertise in publications like this one and have taken to social media to tout their services, which come in the form of remote monitoring, podcasts, software and webinars.

Hospitals will definitely need help on the analytics side, says Bozic.  The shift, however, will require much more effort.  

"Most of what it is going to take to be successful in bundled payments you are not going to get from a consultant," he said. "It's trust and alignment from the clinical community and you can't buy that from a consultant. You need strong physician leaders who can lead change."

Franklin agrees that hospitals need to ensure that the clinical pieces are in place. In the survey, 75% of respondents said they were hiring staff. That makes sense, she says, because they'll need clinical nurse managers, transition coaches, or navigators who will track the patient through the entire 90-day episode of care. 

Data is Key
The other piece is the data analysis, she says. Some integrated health system will have the data infrastructure needed to track patients, collect data, and improve care.  

Some may not, so they had better move on it. Data is key to this and any quality improvement effort.

Thomas Barber, MD, is an orthopedic surgeon at the Kaiser Oakland Medical Center and a spokesman for the AAOS on bundled care for joint replacement. He the agrees that clinical, data and infrastructure needs must be met before the hospitals can successfully handle the CJR program. He thinks a lot of hospitals have pieces, but haven't yet put them together yet. They will, but probably not by April 1. But since the program will be phased in, that won't be a problem for a while, he says. 

"It is going to be a challenge to put all those pieces together and manage it well," he says. "If you think 50% of the hospitals are well prepared for CJR, I would be skeptical. "

Dare we say that bundled payments will allow, or force, hospitals to tackle a lot of their problems at once? What about the need for good data systems, lower costs, and better quality? Tackle may be the appropriate term. The consensus seems to be that this is a huge complicated job, but it has to has to happen, and it and will.

"It is a significant amount of work for a large amount of people," Bozic said. "They night not know where to start. There is really no good blueprint for this."

Tinker Ready is a contributing writer at HealthLeaders Media.

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