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Two-Year Evaluation of Mandatory Bundled Payments for Joint Replacement
Michael L Barnett1, Andrew Wilcock1, J Michael McWilliams1
1From the Department of Health Policy and Management, Harvard T.H. Chan School of Public Health (M.L.B., A.M.E., E.J.O.), the Department of Health Care Policy, Harvard Medical School (A.W., J.M.M., D.C.G., A.M.), and the Department of Medicine, Brigham and Women's Hospital (M.L.B., J.M.M., A.M.E., E.J.O.) - all in Boston; and the Department of Medicine, Washington University School of Medicine in St. Louis, St. Louis (K.E.J.M.).
The New England Journal of Medicine
|January 3, 2019
Summary
The Comprehensive Care for Joint Replacement (CJR) program modestly reduced spending for hip and knee replacements. This bundled payment model did not increase patient complication rates during the initial two years.
Area of Science:
- Health Economics
- Orthopedic Surgery
- Healthcare Policy
Background:
- Medicare's Comprehensive Care for Joint Replacement (CJR) is a mandatory bundled-payment model for hip/knee replacements.
- Hospitals in selected areas face financial bonuses or penalties based on episode spending (hospitalization + 90 days post-discharge).
Purpose of the Study:
- To evaluate the impact of the CJR program on healthcare spending and patient outcomes.
- To assess changes in institutional spending, complication rates, and patient risk profiles post-CJR implementation.
Main Methods:
- Difference-in-differences analysis of Medicare claims from 2015-2017.
- Comparison of hip/knee replacement episodes in 75 mandatory CJR areas versus 121 control areas.
- Primary outcomes: institutional spending, complication rates, high-risk patient percentage; adjusted for patient/procedure characteristics.
Main Results:
- A $812 (3.1%) differential decrease in institutional spending per episode in CJR areas compared to control areas.
- Spending reduction primarily driven by a 5.9% decrease in discharges to post-acute care facilities.
- No significant differential effect on complication rates or the proportion of high-risk patients.
Conclusions:
- The CJR program achieved a modest reduction in joint replacement episode spending in its first two years.
- The program did not lead to an increase in postsurgical complications.
- Bundled payment models show potential for cost savings in joint replacement procedures without compromising patient safety.
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