The 7 Pillars of Value-Based Care in Total Joint Arthroplasty

    The Bundled Payments for Care Improvement initiative has been a success at the authors’ institution, reducing length of stay, discharge to inpatient facilities, and readmission rates without sacrificing quality of care. In this article, they discuss the clinical pillars that support their evidence-based protocols and clinical care pathways, all designed to bring value to the episode of care for each total joint arthroplasty patient.


    David Novikov, BS; Joseph A. Bosco III, MD; and Richard Iorio, MD


    The cost of healthcare in the US was projected to reach a total of $3.2 trillion as of 2015. [1] This rising liability has sparked interest in medical economics and has prompted the creation of healthcare payment reforms that stress value-based care (VBC) in an effort to improve the coordination, quality, and cost-effectiveness of care delivered. [2]

    As a product of the Affordable Care Act, the Center for Medicare and Medicaid Innovation (CMMI) first announced the Bundled Payments for Care Improvement (BPCI) initiative in 2011, with the goal of examining the effectiveness of 4 payment models among 48 clinical conditions based on the Medicare Severity-Diagnosis Related Group (MS-DRG). [3] A 3-year voluntary initiative, with an optional institutional 2-year extension, the BPCI program included 3 retrospective payment models that calculated target payments that were discounted and based on historical payments made by the Centers for Medicare and Medicaid Services (CMS) for similar MS-DRG episodes of care (EOC). [4]

    Participants – including surgeon groups and hospitals – received discounted Medicare fee-for-service payments that would then be compared with the set target price. Savings could be gain-shared among the providers if the CMS payments failed to reach the target price. Alternatively, financial risk would fall on the healthcare organization if CMS payments surpassed the target price.

    Major joint replacement of the lower extremity has been one of the most common conditions covered by the BPCI program, with an estimated $7 billion in hospitalization costs incurred to Medicare in 2014. [5,6] The success of the BPCI initiative within the orthopaedic community has been widespread, as participants were able to reduce healthcare spending without sacrificing the quality of care delivered. [7,8]

    In April 2016, CMS expanded on BPCI’s success with the development of the Comprehensive Care for Joint Replacement (CJR) program. Spanning 791 hospitals within 67 metropolitan areas across the US, CJR was initially a 5-year mandatory program similar to BPCI but with a target price that adapts to the average cost of a participants geographic region. [6] In late 2017, CMS released revisions to the CJR model that included: [9]

    • A decrease in the number of Metropolitan Statistical Areas (MSAs) – from 67 to 34 – in the mandatory program, with the remaining mandatory MSAs representing the most expensive regions for CMS TJA care delivery
    • An option for select hospitals to choose to participate in the model
    • Technical modifications and clarifications for a number of payments, quality provisions, and reconciliations
    • An expansion to increase eligibility of a number of clinicians that qualify as affiliated practitioners under the Advanced Alternative Payment Model track.

    In January 2013, the BPCI Model 2 was implemented for total joint arthroplasty (TJA) at the authors’ tertiary acute care academic medical center. Coverage for the EOC begins 72 hours prior to surgery and includes all costs through 90 days following discharge. Three years after implementation, the authors’ institution had decreased the average hospital length of stay (LOS); rate of discharge to an inpatient facility; and 30-day, 60-day, and 90-day all-cause readmission rates, while simultaneously decreasing the average 90-day cost per EOC. [10]

    As a result, evidence-based protocols and clinical care pathways were further developed at the authors’ institution to focus on bringing value to each individual EOC and TJA patient. These strategies rest on 7 clinical pillars that were defined by the authors and their colleagues after evaluating their success with BPCI:

    • Optimizing patient selection and comorbidities
    • Optimizing care coordination, patient education, shared decision making, and patient expectations
    • Using a multimodal pain management protocol and minimizing opioid use to facilitate rapid rehabilitation
    • Standardizing prophylaxis treatment for venous thromboembolic disease (VTED) by risk standardizing patients, minimizing use of aggressive anticoagulation, and optimizing blood management
    • Minimizing post-acute care (PAC) facility and resource utilization and maximizing home resources for patient recovery
    • Using transparent, real-time, accurate data to track quality metrics, resource utilization, and costs
    • Gainsharing to align stakeholder interests in an effort to deliver value-based care

    Following is a discussion of the importance of these 7 pillars and how their implementation has allowed the authors’ institution to adapt to the current economic environment in healthcare.

    Patient Selection and Comorbidity Optimization

    In the VBC setting, the shift in financial responsibility has placed a greater emphasis on preventing hospital readmissions, as all costs incurred in the first 90 days postoperatively are accrued to the bundle. Numerous studies have identified preoperative comorbidities as a major contributor to suboptimal postoperative patient outcomes and increased hospital costs. [11-16] On average, 18.45% and 5.65% of payments for an EOC are required to cover readmission costs in patients with extremely severe comorbidities and major comorbidities, respectively. [17] Modifiable risk factors (MRF) that have been shown to influence readmission include:

    • LOS
    • Body mass index
    • Diabetes
    • Cardiovascular diseases
    • VTED
    • Infection risk factors: Staphylococcus aureus colonization, human immune deficiency virus infection, hepatitis C infection
    • Tobacco use
    • Substance abuse
    • Psychiatric conditions
    • Frailty
    • Fall risk

    Several risk stratification instruments are available, such as the American Society of Anesthesiologist (ASA) score; however, they include non-MRFs and MRFs. Furthermore, they simply categorize patients as at-risk for perioperative complications, failing to guide medical optimization protocols. As a result, in 2013 the authors’ institution implemented a Perioperative Orthopaedic Surgical Home (POSH) program, which includes a Readmission Risk Assessment Tool (RRAT) (Figure 1), to better stratify and optimize TJA candidates.

    Figure 1. Readmission Risk Assessment Tool (RRAT). The RRAT tool [44] can be used to risk-stratify patients undergoing TJA for the risk of readmission. Left column contains the modifiable risk factor categories with their respective risk factors in the 3 adjacent columns. The severity of risk factors is graded from 1 to 3 and the total score is summed. RRAT scores ≥3 should result in a hard stop until the patient is optimized. Stop hand indicates hard stop until modifiable risk factor is resolved.

    *Patient has a history of coronary artery disease, cerebrovascular accident, peripheral vascular disease or venous thromboembolic disease, age ≥60 years and at least 21 cardiac risk factors; renal insufficiency (CrCl < 60ml/min); diabetes; COPD; hypertension; recent smoker (<30 days); cancer; heart failure.

    **Has VTED risk factors: cerebrovascular accident, COPD, BMI ≥40, coronary artery disease, peripheral vascular disease, thrombophilia (activated protein C resistance, elevated factor VIII and lipoprotein A).

    The relationship between readmission after TJA and the RRAT score has been shown to be positively correlated, with a RRAT score of 3 or more found to be predictive of a high risk of readmission. [11] Using the RRAT, surgeries for patients who are at a high risk for readmission are delayed until their MRFs are medically optimized. With the help of POSH, 90-day readmission rates at the authors’ institution have been reduced from 13% to 4% in all patients and from 15% to 7% in CMS patients, and current readmission rates continue to drop further (Figure 2). [10]

    Figure 2. 90-day readmission rate of TJA patients before and after POSH implementation (Q3 = quarter 3; Q1 = quarter 1; Q2 = quarter 2; CY = calendar year).

    With the help of the POSH program and the RRAT, comorbidity optimization allows for the alignment of the hospital, surgeon, patient, and payer, while simultaneously emphasizing cost-effectiveness and quality in the provision of care.

    Patient Education, Expectations, and Care Coordination Optimization

    The creation of standardized care management and clinical pathways (SCMCP) for each EOC has been shown to reduce LOS and costs without sacrificing complication rates, patient-reported outcomes, or patient satisfaction. [18] SCMCPs serve as a framework for the total EOC for a patient from the time of diagnosis through the PAC period. [18] In addition, they can improve patient-reported outcomes and decrease the utilization of costly PAC facilities by establishing appropriate expectations, as well as engaging and educating patients and their families in the discharge process. [19-21] Coordination of care has historically aligned VBC goals, and it has been shown to reduce LOS, readmission, and cost without sacrificing outcomes. [18,19,22]

    SCMCPs have been developed at the authors’ institution, through the work of a multidisciplinary team of nurse practitioners (NP), clinical care coordinators (CCC), physical therapists, nurses, care managers, social workers, fellows, and attending surgeons, to guide patients throughout their EOC. Increased oversight of implant costs and waste has led to a 50% reduction in implant costs associated with historical spend for the EOC. [20] Coordination among anesthesia, preadmission testing, and medical clearance teams helped reduce cancellations, eliminate unnecessary tests, and optimize patient safety while emphasizing cost-effectiveness. [8] This has resulted in a reduced mean LOS (4.27 vs. 2.92 days), a decrease in discharge to inpatient facilities (71% to 21%), and a 20% decrease in costs to Medicare in the latest reconciliation in 2016. [8] Maximizing discharge to home as a goal of admission is a key contributor to minimizing readmission rates and post-acute care costs.

    The implementation of SCMCPs has improved communication among the patient, the care management team, and the provider; ensured follow-up in the post-discharge period; and helped enhance patient outcomes. The institution’s goal is to create a pathway in which more than 80% of a TJA patient’s EOC is funneled through these SCMCPs.

    Multimodal Pain Management Protocol

    As the EOC increases to 90 days after discharge, surgeons are placing a greater emphasis on perioperative optimization, including pain management. Perioperative pain management and the opioid burden affect LOS, are independent risk factors for readmission when opioid abuse or opioid related complications are  present, and are major contributors to EOC costs. [23,24] Traditional pain management protocols, including opioid patient-controlled analgesia (PCA), oral opioids, and peripheral femoral nerve blocks (FNB), are effective at controlling pain but can prolong hospital LOS and delay return to function. [23] Alternative protocols have been adopted with the hope of preserving adequate pain control, minimizing opioid use, reducing complications, and ultimately decreasing LOS. [23]

    In May 2014, the authors’ institution began an iterative modified pain management protocol that included:

    • Replacement of FNBs with intraoperative periarticular infiltration of liposomal bupivacaine (LB)
    • Use of oral multimodal agents
    • Use of periarticular short-acting LB
    • Discouragement of PCAs

    A retrospective analysis was then over the next 2 years focusing on financial and quality metrics, postoperative patient-reported pain scores, opioid use, and physical therapy (PT) milestones among 3 patient cohorts:

    • FNB, no LB, PCA
    • No FNB, LB, PCA
    • No FNB, LB, no PCA

    Patients who received LB without FNB and PCA were more often discharged home (P=0.010), had a shorter LOS (P<0.001), incurred less hospital cost (P=0.005), consumed fewer opioids, and had equivalent pain control (P=0.214). [25]

    To be successful in a VBC model, hospital costs need to be minimized and changes in perioperative protocols need to be carefully evaluated. The analysis of cost-effectiveness for interventions in VBC needs to be considered over the entire episode, not just the hospital stay, to determine the incremental cost-effectiveness rate.           

    VTED Risk Stratification and Blood Management Optimization

    Optimization of VTED prophylaxis is important to the success of VBC, as pulmonary embolism is one of the most common causes of 30-day readmissions. [26] Finding the optimal balance of VTED prophylaxis and bleeding prevention can minimize the risk of costly complications such as wound hematomas, periprosthetic joint infections, and need for readmission/reoperation. [27,28] Deciding on a suitable prophylactic therapy to achieve efficacy and safety necessitates an individualized evaluation of the patient’s risk profile.

    In 2013, the authors’ institution implemented a risk-stratified VTED prophylaxis protocol for patients undergoing TJA in an effort to reduce or maintain VTED rates while also minimizing the complications of aggressive prophylaxis. [28] In an evaluation of the protocol, 2611 patients were separated into 2 cohorts:

    • Patients in cohort 1 received anticoagulation irrespective of their risk factor profiles as per standard of care at that time (warfarin, enoxaparin, rivaroxaban).
    • Patients in cohort 2 received anticoagulation based on their individualized VTED risk profiles. [29]

    The risk-stratified cohort had a lower incidence of VTED, decreased 30-day readmission rate, fewer adverse events, and a lower rate of infection compared with the non-risk stratified cohort. These results failed to reach clinical statistical significance due to the underpowered size of the study. However, standard-risk patients within the risk-stratified cohort who received aspirin and used sequential pneumatic compression devices had an 18.15% lower cost per EOC, with no difference in VTED rate, when compared with high-risk patients (P<0.001). [28]

    In addition to VTED risk-stratification, the authors’ institution has safely reduced blood loss and postoperative transfusions with the implementation of a standardized tranexamic acid (TXA) protocol and a strict transfusion guideline: [30]

    • All TJA patients receive 1 gram of intravenous TXA after anesthesia induction.
    • Total hip arthroplasty (THA) patients also receive 1 gram of TXA before wound closure.
    • Total knee arthroplasty (TKA) patients also receive 1 gram prior to tourniquet release.

    An evaluation of this protocol found transfusion rate reductions of 10.8% and 12.4% in THA and TKA patients, respectively, compared with a cohort of patients who did not receive TXA. [30] In line with the institution’s VBC goals, costs were reduced $3,083 and $2,852 for THA and TKA patients, respectively, per hospital episode. The TXA cohort had a lower rate of VTED and comparable rates of intra- and postoperative myocardial infarction and stroke compared with the non-TXA cohort. Patients were only transfused for symptomatic anemia unresponsive to fluid bolus and conservative management (hemoglobin under 7, arrhythmia, electrocardiogram changes, cardiac stress). [30]

    By implementing VTED risk-stratification and TXA protocols, the authors’ institution has successfully delivered value without sacrificing safety throughout the EOC.

    Minimization of Post-acute Facility and Resource Utilization

    A significant portion of costs – 35% – for a single EOC is attributable to PAC and discharge disposition. [31,32] With wide variation among PAC practices and no significant difference in outcomes, a cost-conscious approach to this portion of an EOC can result in appreciable savings and value creation. [31,33] In addition to higher costs, patients discharged to PAC facilities are at an increased risk for complications, are less satisfied, and have higher reoperation and readmission rates compared with patients discharged home. [34-37] At the authors’ institution, patients discharge to facilities have a 11.6% higher 90-readmission rate than those that are discharged to home (Figure 3).

    Figure 3. 90-day readmission rates by discharge disposition. SNF: 12.35%; IP Rehab: 12.32%; Home: 7.5%; HHA: 5.51% (SNF = skilled nursing facility; IP Rehab = inpatient rehabilitation facility; HHA = home health aide)

    The decreased use of inpatient post-acute facilities was minimized to capitalize on potential PAC savings for the authors’ institution. This led to an overall 40% average decrease in inpatient post-acute facility utilization and a savings of approximately $4,777 per EOC. [38] In addition, extending hospital LOS up to 5.2 days longer than average still amounted to a lower cost than discharging the patient to a PAC facility. [39]

    To minimize patient stays and resource utilization at a PAC facility, staff at the authors’ institution have fostered relationships with facilities that meet certain quality and care criteria. This so-called narrow network was achieved by implementing the following requirements for participation in the EOC:

    • Bi-directional electronic exchange of information
    • Biweekly updates on high-risk patients
    • Weekly calls with the interdisciplinary team
    • PAC report cards
    • Quarterly PAC committee meetings

    Employing these strategies allowed the authors’ institution to achieve an average LOS of 11 days at their preferred PAC facilities, compared with 20.75 days at other PAC facilities. [29] VBC goals were met by minimizing and standardizing patient stays in inpatient post-acute discharge facilities and limiting their use.

    Transparent, Real-time, Accurate Data

    To continue to adapt and improve within the bundled payment environment, it is imperative for BPCI participants to measure and track their performance in as close to real time as possible in order to influence outcome and behavior. The use of real-time data to track quality metrics, such as complication and readmission rates, LOS, financial performance, and discharge to PAC facilities, allows for the successful evaluation of individual provider performance and the distribution of reimbursement from VBC proceeds. [40] Data gathered on performance and quality metric reviews allows for the group to understand the challenges they face in reaching certain VBC goals.

    Since joining BPCI, the authors’ institution has used data to monitor:

    • Quarterly EOC cost composition
    • Average spend amounts
    • Readmission rates
    • Discharge disposition rates
    • Physician scorecards

    This has created actionable data as the institution works toward VBC goals. It has enabled physicians to score themselves relative to their peers and acceptable standards at the institution. If acceptable performance is not realized, examination, counseling, observation, and advice are generated to change behavior. The performance dashboards are transparent and all stakeholders are able to see data for the institution and understand where they stand in relation to other participants.

    Gainsharing and Alignment

    Gainsharing helps in the achievement of VBC goals, as it aligns physicians with hospitals through shared risk and reward and the realization that all participants are able to improve efficiency and quality within the healthcare organization. [41-43] The better the alignment, the more chance for success. [40]

    Since entering the BPCI program, the authors’ institution has implemented biweekly TJA physician resource utilization and quality performance reviews that include discussion of:

    • Costs
    • LOS
    • Discharge disposition
    • Infection rate
    • VTED rate
    • Readmission rate

    The regular examination of these metrics has resulted in an 8% decrease in the 90-day readmission rate, a 1.6-day decrease in LOS, a 43% decrease in discharge to inpatient PAC facilities, and a 30% cost reduction per EOC. [40]

    Alignment of the physicians and the hospital has allowed the physicians to share in the proceeds of providing BPCI care at EOC costs below the target price. By using physician dashboards and real-time data reporting, the authors’ institution has improved behavior and increased quality, leading to 7 consecutive positive reconciliations with CMS. Furthermore, transparent dashboards hold physicians accountable and effectively promote physician-hospital alignment for the benefit of the patient and the institution.


    In the current quality-driven healthcare climate, there is little room for unnecessary expenditure. Although reimbursement for TJA has historically been based on volume, the shift toward a system that emphasizes value has prompted the refinement of institution-wide protocols and provider practices.

    The authors’ experience and success with the BPCI initiative has allowed their institution to formulate 7 clinical pillars that can help in the attainment of VBC. These principles are applicable to the EOC for all TJA patients regardless of insurer or payment methodology, and they can help with the improvement of quality and financial performance in the TJA population at any hospital.

    CMS will release BPCI Advanced in October 2018 and allow physicians and third parties to join hospitals as conveners for the EOC. CMS will qualify BPCI A as an advanced alternative payment model (AAPM), which will serve as a substitute for the merit-based incentive payment system (MIPS). This will qualify participating surgeons for the automatic 5% increase in CMS reimbursement under the AAPM model rather than being subject to the zero sum quality tract of MIPS (plus or minus up to 9%). The AAPM branch of CMS reimbursement will be a better measure of surgeon value than the MIPS system.

    Key Points

    • The rising cost of healthcare has sparked interest in medical economics and has prompted the creation of healthcare payment reforms that stress value based care.
    • Bundled payments models seek to aggregate fee-for-service payments into a broader fixed amount with the hope of maximizing quality and minimizing cost.
    • Preoperative modifiable risk factor optimization through the POSH program helps reduce 90-day readmission rates and improve financial and patient outcomes.
    • Standardized care management and clinical pathways improve communication between patient and provider, facilitate follow-up in the acute discharge period, and help enhance patient outcomes.
    • Replacing FNBs with periarticular LB injections and minimizing the use of PCA leads to shorter hospital stays, fewer complications, increased cost-savings, less opioid use, and equivalent pain control.
    • Less-aggressive VTED prophylaxis with aspirin and pneumatic compression devices in risk-stratified patients helps reduce costs and anticoagulation-related complications without increasing the risk for VTED.
    • Implementing standardized TXA and transfusion protocols has led to decreased blood loss and fewer transfusions.
    • Limiting the use of inpatient PAC discharge facilities can help reduce readmission rates and decrease costs.
    • Monitoring quality metrics allows for (1) successful evaluation of individual provider performance, and (2) continuous improvement and better understanding of potential challenges in meeting value-based care goals
    • Physician-hospital alignment through gainsharing distributes the risk and the reward in the delivery of value-driven care and maximizes physician buy-in to the process of improving patient outcomes and the delivery of cost effective care

    Author Information

    David Novikov, BS, is a research fellow in the Department of Orthopaedic Surgery at NYU Langone Health – Hospital for Joint Diseases, New York, New York. Joseph A. Bosco III, MD, is a board-certified orthopaedic surgeon, Vice Chairman for Clinical Affairs in the Department of Orthopaedic Surgery, and Director of the Center for Quality and Patient Safety at NYU Langone Health – Hospital for Joint Diseaes, New York, New York. Richard Iorio, MD, is Chief of Adult Reconstruction and the William and Susan Jaffe Professor of Orthopaedic Surgery in the Department of Orthopaedic Surgery at NYU Langone Health – Hospital for Joint Diseases, New York, New York.


    Mr. Novikov has no disclosures relevant to this article. Dr. Bosco has no disclosures relevant to this article. Dr. Iorio has the following disclosures:

    • Co-founder Labrador Healthcare Consulting Services
    • Co-founder MyArthritisRx
    • Co-founder Responsive Risk Solutions
    • Co-founder Value Based Healthcare Consortium
    • Consultant for Johnson and Johnson
    • Consultant for Medtronic
    • Consultant for Zimmer Biomet
    • Consultant for Pacira
    • Product liability consultant for DePuy Orthopaedics
    • Advisory Board for Wellbe, Pacira, MedTel, Muve Health, Force Therapeutics
    • Institutional Research Support: Orthofix, DJO, Vericel, Orthosenseor, Bioventus, Smith and Nephew and Ferring


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