Identifying the Successes of Value-Based Care Programs

    Value-based care initiatives can both improve the quality of treatment for patients undergoing orthopaedic surgery and reduce overall costs – if the financial incentives for payers and providers are aligned and hospitals have access to key data on utilization of resources and postoperative outcomes.

    That’s the conclusion of a new study by researchers at Hospital for Special Surgery (HSS), who assessed the clinical and financial effects of such initiatives for patients undergoing hip and knee arthroplasty at their institution.

    The researchers found that by implementing bundled payment programs for the 2 procedures, HSS saved the Centers for Medicare & Medicaid Services (CMS) nearly $24 million between 2014 and 2019 while also reducing readmissions and utilization of costly but often medically unnecessary post-discharge treatments.

    “Under the BPCI [Bundled Payments for Care Improvement Initiative] and CJR [Comprehensive Care for Joint Replacement] bundle programs, we were able to provide high-quality care efficiently, which in turn led to good outcomes for patients and cost savings for the payer,” said Catherine MacLean, MD, PhD, Chief Value Medical Officer at the HSS Center for the Advancement of Value in Musculoskeletal Care, and the lead author of the study.

    The study was recently published by NEJM Catalyst Innovations in Care Delivery.

    In bundled payment programs, CMS provides a lump sum to physicians and/or hospitals to perform certain procedures, in this case, knee and hip arthroplasty. Surgeons and hospitals that provide care at a cost lower than the target amount can keep the savings, as long as certain quality standards are met. However, if the cost is higher, the hospitals must cover the amount above the target price.

    The goal of these programs is to push healthcare providers to develop innovations and efficiencies that save money while preserving, or even improving, the quality of care. Savings can be used by the hospital to develop and deliver additional services that are aimed at improving quality and achieving the best use of health care resources.

    As the results reported in the new study suggest, bundled payment programs can work well. However, Dr. MacLean said the success of the bundled care program at HSS – and other medical centers that hope to achieve similar results – hinges on access to the kind of granular data about patient outcomes that CMS provides HSS and other facilities participating in the agency’s CJR payment model. Under the CJR, HSS is able to track the use of services and Medicare expenditures for individual patients once they leave the hospital, matching them with the hospital’s electronic medical records system.

    “These data allow us to better understand what happens to our patients once they are discharged and why some are readmitted,” Dr. MacLean said.

    One example of an enhancement in care enabled by access to granular CJR data was identification of a significant number of hip and knee arthroplasty patients who had excessively long post-discharge stays in skilled nursing facilities. “It didn’t make sense that patients who walked into a hospital for an elective procedure were staying in a nursing home for 26 days,” Dr. MacLean said.

    HSS responded to that information by implementing a health optimization program to identify and tailor care to patients with conditions associated with worse postoperative outcomes, such as uncontrolled diabetes mellitus and malnutrition. Surgeons at HSS now place greater emphasis on pre-surgery physical therapy to help optimize patients physically prior to their operations. In addition, the hospital has created clear pathways to help clinicians determine the optimal form of rehabilitation for patients on discharge.

    Although the CJR specifically covers knee and hip arthroplasty patients, Dr. MacLean said the lessons learned from the data have led to wide-ranging benefits.

    “The programs that we have put in place as a result of our analysis of CJR data have had a spillover effect on how we manage our entire population. As a proof point, our Medicare spending per beneficiary improved from the 62nd to the 16th percentile nationally during the study period,” she said.

    Dr. MacLean’s group is now working on an analysis of the effectiveness and efficiencies of HSS@Home, a telemedicine physical therapy program launched in 2018, before the COVID-19 pandemic.


    MacLean C, Titmuss M, Lee J, Russell L, Padgett D. The clinical, operational, and financial components of a successful bundled payment program for lower extremity total joint replacement. NEJM Catalyst Innovations in Care Delivery. 2021;2(10). doi: https://doi.org/10.1056/CAT.21.0240