Bundling for the best: Notes from the field on bundled payment design and implementation

Though hip and knee replacements are among the most common surgeries for Medicare beneficiaries, the quality and cost of care for these surgeries vary immensely between providers. Medicare spends an average range of $16,500 to $33,000 for surgery, hospitalization and recovery, and rates can vary more than three-fold for complications such as infections or implant failures, according to CMS.

Bundled payments are one way to reign in the cost and quality of care for inpatient primary procedures. In July, CMS proposed a five-year Comprehensive Care for Joint Replacement payment model that would mandate participation in bundles for hip and knee replacements across 75 geographic areas. On the heels of this proposal, we checked in with three healthcare leaders with experience in bundled payments to identify strategies for designing, implementing and driving care redesign through this payment innovation.

Participants include:

Denise A. McGinley, MSNAd, RN, Director, Center for Orthopaedic Innovation, St. Luke's Medical Center in Phoenix. About three years ago, St. Luke's Center for Orthopaedic Innovation decided to participate in the Bundled Payments for Care Improvement Initiative for hip and knee replacements, one of CMS' Innovation Center programs. At this point, Ms. McGinley says the hospital plans to exclusively use bundles in orthopedics, but it has discussed the possibility of expanding the model to other service lines, like its open heart program.

Steven F. Schutzer, MD, Medical Director, Connecticut Joint Replacement Institute, President, Connecticut Joint Replacement Surgeons, LLC. In 2009, Hartford, Conn.-based Saint Francis Hospital & Medical Center and Woodland Anesthesia group began discussing the value of bundled payments. As early adopters, in 2010 the organizations launched a commercial bundled payment initiative for primary total knee and primary total hip replacements.

Michael Kelly, MD, Chairman, Department of Orthopaedic Surgery and Sports Medicine, Chairman, Department of Physical Medicine and Rehab, Hackensack (N.J.) University Medical Center. Hackensack UMC began participating in January 2013 in the Bundled Payments for Care Improvement Initiative. Since then, the experience has illuminated the costs associated with the post-acute experience and enabled the those in the program to make changes to the way they deliver care and work with other provider partners across the entire care continuum.


Note: Responses have been edited lightly for length and style.

Question: What are some best practices you use to implement and execute bundled payment programs?

Denise McGinley: There are several best practices we use. First, bundles make data available [that] we've never had before. One best practice is to look at this data on a regular basis and sort out reasons for readmissions and delays in progress. If it can't be found through the data, we contact patients to find out exactly what happened, then implement performance improvements to cut down on future readmissions and delays in progress.

Second, we use all micro-invasive surgical approaches unless there is a reason to take a more extensive approach. Virtually no muscle is cut. That means all of our patients go home within 24 hours relatively pain free. They no longer need patient-controlled analgesics and need only limited narcotics, so they are able to ambulate early and often. They don't need skilled nursing facilities or inpatient rehabilitation, which is an enormous post-surgical cost. We have been able to reduce post-acute readmissions to less than 15 percent. The focus of our bundles has been optimizing anesthesia practices, utilizing cutting edge surgical approaches and looking at where we spend our money on the inside of our hospital to prevent costs on the outside. 

Dr. Steven Schutzer: In 2006, the surgeons that started the Connecticut Joint Replacement Institute, (the Connecticut Joint Replacement Surgeons), agreed to two overarching principles. First [they agreed] to make data-driven decisions and, second, to adopt a standardized model of care delivery. This marked the beginning of our value journey. For surgeons, however, the concept of standardization connotes a 'we-tell-you-what-to-do' approach. That will not work. Instead, we work together as a group to discuss ideas and then vote on clinical protocols. We prefer to call these consensus-based protocols rather than standardized or evidence-based best practices.

We now have 16 protocols. A prime example of one is our transfusion protocol. In 2011, our data showed our transfusion rate was 21 percent for primary joint arthroplasties. Our conclusion was that this was excessive, so we explored opportunities and decided to implement a blood conservation protocol. Six months later, the transfusion rate was 4 percent. We use the Deming Cycle — Plan, Do, Check, Act — as part of our iterative quality improvement process. Two years ago, with the addition of Tranexamic Acid, we further reduced transfusion rates to 1.5 percent.

Dr. Michael Kelly: One of the most critical times to focus on is preoperatively. We found many of our patients expected to begin rehab after they left the hospital in a rehab facility, rather than begin while they were in the hospital. They weren't prepared for the possibility they may go home, nor did they have appropriate expectations for the procedure. They were influenced by their peers and relatives. We found it was critical to focus on the pre-operative touchpoints and truly educate our patients.

Then, we needed to tighten up our protocols and standardize across all of our total joint physicians. We have had a significant focus on pre-operative education to align patient and surgeon expectations. The hospital provided additional resources to add a joint program nurse navigator and two advanced practice nurses. They are actively involved in each step of the patient experience. Both patients and nurses have found this pre-operative education program has had a profoundly positive effect on our patients' experience. It allowed us to consistently deliver on what we were discussing with the patients preoperatively, rather than have variability from one provider to another.

Q: How do you define the episode of care and what should be measured?

DM: The episode of care starts from the time a surgeon first sees the patient and decides they need surgery, and it follows through to 90 days after surgery. It's about a six-month period total since our surgeons are booked fairly well in advance, and we do a lot of work on the front end to reduce comorbidities, such as referring overweight patients for weight loss, working with our cardiologists and mitigating dental issues. We also do aggressive preoperative education and physical prehabilitation to optimize post-operative rehabilitation.

SS: A typical episode for a primary total hip or knee arthroplasty begins on admission to the hospital and extends 90 days post-discharge. We define the episode in explicit and granular detail, likely the most important step in implementing a bundled payment program. For example, it is critical to define what's included and excluded from the bundle and what are the duties and responsibilities of the parties to the agreement. We have a bundle for primary total knee and primary total hip arthroplasty. At the present time, our bundle is offered to patients under the age of 70 with no or minimal systemic disease and who do not have any of our 10 exclusions, including uncontrollable diabetes, sleep apnea, anemia and alcoholism.

MK: It begins before the patient chooses to have surgery and goes for two-plus years after they go home. That said, we are responsible for a shorter period during and after the inpatient stay; however, we want to make sure that the end-to-end experience is consistent and exceptional, and that we are collecting long term outcomes on our patients to ensure their procedure was successful.

Q: How do you identify savings opportunities in the inpatient setting, as well as in skilled nursing facilities and post-acute care settings? Are there any products or services that you have found helpful in generating savings?

DM: For us, one is micro-invasive technology. Another is our anesthesia. Our anesthesia team uses a very unique group of anesthetic agents that is their own 'secret sauce' — it has really helped our patients control sleepiness, post-operative nausea and other side effects. We don't use regional nerve blocks, only ultrasound-guided direct blocks so patients don't experience rubbery legs that make them unsteady.

We also use intraoperative medications — Exparel, which is methodically injected directly into the muscle, is one — which may add cost inside the hospital, but helps achieve tremendous savings in the post-operative period because it reduces the need for SNFs and complications related to immobility.

SS: When you go through the care redesign process for the entire episode, the opportunities for reducing costs and improving quality become obvious. Three years ago, we reevaluated our entire bundle using the time-driven, activity-based costing analysis. TDABC was introduced by Professor Robert Kaplan, PhD, from the Harvard Business School in 2006. TDABC is a method of cost accounting that determines the unit cost of delivering segments of care and the time necessary to deliver that care. It was quite a robust process that was completed in a year and presented a perfect opportunity to strip away unnecessary, low-value services to further reduce costs.

As a result of such analysis, we concluded inpatient physical therapy presented a glaring opportunity to reallocate resources. We implemented a program that we call a certified mobility technician program, through which we trained our CNAs to mobilize patients, get them out of bed safely, teach them to walk and navigate stairs — services that did not require the skill level of licensed physical therapists. We don't have a shortage of these 'mobility techs' and virtually all our patients are up walking on the day of surgery and getting home a day sooner. The savings based on that initiative were in the tens of thousands of dollars.

MK: Inpatient savings are basic — they can mostly be found around devices and disposables. We also are focusing on decreasing our length of stay and ensuring discharges to the appropriate setting. Because the hospital is not caring for the patient in the post-acute settings, we have less influence over the care; however, we have begun to partner with various post-acute partners, have regular meetings and conversations, and treat the patient as an expanded care team to make sure their experience is consistent across treatment locations.

Q: What role does pain management play in bundles?

DM: Pain management plays a huge role. If our patients are in pain, they don't ambulate and they have a greater chance of infection. Increased cortisol decreases immunity and blood sugar stays higher when a patient is in pain. Managing pain is the single most important thing you can do.

SS: Controlling post-operative pain is extremely important. Our anesthesiologists play a pivotal role in our mission and vision. In fact, in 2009 we recognized their importance and therefore included anesthesia in our original bundle. As this relationship developed, their value became even more apparent and therefore we recently voted to add our two lead anesthesiologists to membership of CJRS.

Our anesthesiologists are at the cutting edge of developing regional blocks for total knee arthroplasty and the results are quite remarkable. This is an ultrasound-guided technique that starts with a femoral nerve block with short acting mepivacaine. This is done to minimize pain of subsequent infiltration in an awake patient. This followed by an adductor canal injection and a 'ring block' (infiltration) above the knee with liposomal bupivacaine under ultrasound guidance to confirm proper spread of local solution. The majority of patients are up walking on the same day of surgery. As we move to shorter hospital stays and some outpatient total joint surgery, these 'rapid recovery' protocols become critically important. In addition to pain control, mitigating nausea, swelling and dehydration are essential elements of 'rapid recovery' protocols . The overall impact? Our patient satisfaction scores remain at the 99th percentile, to a large extent directly related to anesthesia input.

MK: Pain management is critical. We worked with our orthopedic surgeons to develop a standardized multi-modal pain protocol in collaboration with our pain management specialists. The results have been phenomenal. Two years ago we changed our approach to pain by utilizing a locally injected liposomal bupivicaine, a long-acting local anesthetic. This has allowed us to eliminate epidural and femoral nerve catheters. Patients are up and out of bed earlier in their stay. They have less pain and are able to begin their recovery much more quickly.


More articles on bundled payments:

CMS pitches bundled payment approach for hip, knee replacements
AHA backs bundled payment approach for joint replacement, but with changes
Bundled payment program development - Implementing the program

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