Redesigning care — 6 things to know for success under bundled payments

Though Congress has yet to push through legislation officially repealing the ACA, the future of the health law remains uncertain, as does the future of healthcare payment reform. However, there is still reason to believe bundled payments will be an essential component in the evolution of healthcare reimbursement.

While President Donald Trump's administration recently moved to scale back major bundled payment initiatives, bundled payments remain poised to play a significant role in the healthcare reimbursement landscape moving forward, as CMS will still need to monitor quality of care and work to reduce costs, according to an op-ed written by Bloomberg's editorial board.

During an Oct. 10 webinar hosted by Becker's Hospital Review and sponsored by MPA Healthcare Solutions, Donald Fry, MD, adjunct professor of surgery at Northwestern University Feinberg School of Medicine in Chicago and executive vice president of clinical outcomes at MPA Healthcare, discussed bundled payments and recent healthcare reforms.

"Over the last decade, there have been a host of different methods used to try and reduce the cost of healthcare while preserving the quality of the product that's delivered," Dr. Fry said. "But in the final analysis, you would have to say they've been somewhat like rearranging the deck furniture on the Titanic. They've had very little impact of a positive nature to this point … Bundling the payment of a healthcare episode, we think, is the logical solution to carry forward meaningful ways of changing the way care is paid for."

Here are six areas of focus for success under bundled payments.

The definition of bundled payments

During the webinar, Dr. Fry defined a bundled payment as a single payment that covers the entire episode of care, including inpatient facility costs, total professional costs and post-discharge care for the patient for a specific period of time, such as 90 days. Bundled payments could also include inpatient surgical care, ambulatory outpatient procedures, inpatient medical admissions, obstetrical services and outpatient chronic disease management. The total bundled payment amount would reflect the cost of a routine case  that did not include an adverse event, plus the cost of the probability of an adverse outcome times the risk-adjusted cost of the adverse outcome discussed below.

The adverse outcome

Variance in rates of adverse events and care complications fluctuates widely across healthcare literature and reporting. Factors including a lack of accepted definitions for complications, little acknowledgment or emphasis on the severity of adverse events and the existence of hundreds of surgical complications codes, among other issues, obscure the true burden of adverse care events.

However, hospitals and health systems can get ahead of the curve by conducting their own internal analysis of adverse outcomes with the aid of healthcare solutions.

"The adverse outcome is a critical piece to what we do at MPA," Dr. Fry said. "Surveillance for complications is inconsistent. It's been my observation that facilities that commonly self-report very low rates of adverse events aren't looking very hard."

Dr. Fry he and his colleagues have focused on four specific outcomes when working to develop a composite measure of adverse surgical events:

  • Inpatient mortality
  • Inpatient complications
  • Readmissions
  • Post-discharge mortality

While these measures can help develop an accurate picture of adverse events, it's crucial data is adjusted by risk, as each patient comes with a unique health profile.

The importance of risk adjustment

Prospective risk adjustment is an essential component to the success of any bundled payment initiative, as each patient is unique and presents different elements of risk for adverse events. Risk adjustment is critical to eliminate hospitals' incentive to cherry-pick risk adverse patients and to ensure the accuracy of adverse event reporting.

"If the risk adjustment is done correctly, it will correct for adverse case selection," said Dr. Fry during the presentation. "It rewards high-quality care and it insures patients get high-quality care, because those facilities, those providers that can't deliver care to the benchmark, will not fare well under this model."

MPA has currently created risk-adjusted bundle payment models for 32 clinical categories, including several that are currently being implemented at large health systems. Among those clinical categories are hip and knee replacement, cervical and non-cervical spinal fusion, cesarean section and cardiac valve replacement.

The post-discharge adverse outcome

Promoting better understanding of post-discharge outcomes through metrics is important for success under value-based care models. It also represents an area with evident room for improvement.

During the webinar, Dr. Fry referenced an oft-cited study published in The New England Journal of Medicine in 2009. The study included data on more than 13 million Medicare patients and found that 19 percent of patients experienced readmission within 30 days of discharge and 34 percent experienced readmission within 90 days of discharge. Additionally, 52 percent of patients readmitted within 30 days had not seen physician following discharge and 22 percent of patients readmitted within 90 days following discharge had also not seen a physician prior to readmission.

"I think this is telling us right away how we can look to the future for improving the outcomes and reducing the readmissions in these patients," Dr. Fry said.

The redesigning of care

For hospitals and health systems to be successful under bundled payments, healthcare must undergo a redesign. This redesign will be multifaceted, incorporating infection control concerns, new pain management programs and special post-discharge follow-up care for high-risk patients. However, perhaps most critically, hospitals and surgeons will need to rely on data transparency to understand their outcomes of care.

"You have to know what your results are and they need to be benchmarked," Dr. Fry said. "Transparency back to hospitals and to surgeons, I believe, will improve care."

To view the webinar, click here. To view the slides, click here.

To view past webinars, click here

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