Feasibility of Episode-Based Bundled Payment for a Pediatric Surgical Condition: Posterior Spinal Fusion

Episode-based bundled payment (EBBP) is an alternative model of health-care payment that aims to align providers' and hospitals' incentives toward delivery of more coordinated, higher quality, and lower cost care. EBBP programs have been studied for numerous adult conditions over the past decade, yet there have been no studies exploring the use of EBBP in pediatric conditions.

This article explores the feasibility of EBBP for a relatively common, costly, pediatric surgical procedure: spinal fusion for adolescent idiopathic scoliosis. We begin with a review of successful EBBP programs in the United States. We then apply American College of Surgeons criteria for bundled payment episode selection to identify benefits and challenges of using EBBP for this condition.

We identify several features of pediatric spinal fusion that make it an attractive EBBP target: high variability in costs with multiple distinct targets for cost reduction, high variability in quality across hospitals, and proven methods for improvement via application of standardized, evidence based pathways. We find that challenges to EBBP may arise due to the relatively low incidence of the procedure, which limits overall savings to the health-care community.

Our results suggest that spinal fusion for adolescent idiopathic scoliosis is an attractive pediatric target for EBBP, with potential benefits to patients, providers, health systems, and payers if limitations in procedure volume and administrative expense are overcome. The framework presented may also be useful for analyzing feasibility of EBBP for other pediatric conditions.