Medicare bundled payments for joint replacement cut costs by 20%

A study published in the Journal of the American Medical Association found bundled payments for joint replacement services can reduce costs by up to 20 percent without sacrificing patient outcomes.

For the study, researchers used Medicare claims to analyze 3,924 lower extremity joint replacement procedures at San Antonio-based Baptist Health System between July 2008 and June 2015. The patients participated in CMS' voluntary Acute Care Episodes and Bundled Payments for Care Improvement demonstration projects.

Here are five study findings.

1. Baptist Health System achieved on average $5,577 in cost savings per joint replacement episode.

2. During the seven-year period, Baptist Health System reduced average Medicare costs by 20.8 percent for 3,738 joint replacements without complications.

3. For 204 episodes with complications, Medicare episode expenditure fell 13.8 percent on average.

4. Episodes with prolonged length of stay fell 67 percent.

5. Study researchers estimated if every hospital utilized this bundled payment model, Medicare could save $2 billion annually.  

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