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National Representativeness Of Hospitals And Markets In Medicare's Mandatory Bundled Payment Program
Joshua M Liao1, Ezekiel J Emanuel2, Daniel E Polsky3
1Joshua M. Liao is associate medical director for contracting and value-based care, director of the UW Medicine Value and Systems Science Lab, and an assistant professor in the Department of Medicine, University of Washington, in Seattle, and an adjunct senior fellow at the Leonard Davis Institute of Health Economics, University of Pennsylvania, in Philadelphia.
Insights
Medicare
Area of Science:
- Health Economics
- Healthcare Policy
- Medical Payment Models
Background:
- Medicare's Comprehensive Care for Joint Replacement (CJR) program, initiated in 2016, is a mandatory alternative payment model for hip and knee replacements.
- The program aims to provide generalizable evidence on the national scalability of bundled payment models.
- Understanding variations in market and hospital characteristics within CJR is crucial for assessing its broader applicability.
Purpose of the Study:
- To compare CJR markets and hospitals with national benchmarks regarding baseline quality and spending.
- To identify hospital structural characteristics linked to early savings within the CJR program.
- To inform the potential national expansion of bundled payment models.
Main Methods:
- Utilized data from Medicare, the American Hospital Association, and the Health Resources and Services Administration.
- Analyzed structural market and hospital characteristics.
- Assessed baseline hospital episode quality and spending performance.
Main Results:
- Observed differences in structural market and hospital characteristics between CJR participants and non-participants.
- Found largely similar baseline hospital episode quality and spending performance across groups.
- Identified heterogeneity in hospital characteristics associated with early CJR savings.
Conclusions:
- Medicare can likely expect similar results from scaling the CJR program to additional urban markets covering 71% of beneficiaries.
- Policy adjustments may be necessary for extending market-level programs to diverse regions or enabling varied hospital types to achieve bundled payment savings.
- The CJR program provides valuable insights into the implementation and potential of alternative payment models in healthcare.
Abstract:
In 2016 Medicare implemented its first mandatory alternative payment model, the Comprehensive Care for Joint Replacement (CJR) program, in which the agency pays clinicians and hospitals a fixed amount for services provided in hip and knee replacement surgery episodes. Medicare made CJR mandatory, rather than voluntary, to produce generalizable evidence on what results Medicare might expect if it scaled bundled payment up nationally. However, it is unknown how markets and hospitals in CJR compare to others nationwide, particularly with respect to baseline quality and spending performance and the structural hospital characteristics associated with early savings in CJR. Using data from Medicare, the American Hospital Association, and the Health Resources and Services Administration, we found differences in structural market and hospital characteristics but largely similar baseline hospital episode quality and spending. Our findings suggest that despite heterogeneity in hospital characteristics associated with early savings in CJR, Medicare might nonetheless reasonably expect similar results by scaling CJR up to additional urban markets and increasing total program coverage to areas in which 71 percent of its beneficiaries reside. In contrast, different policy designs may be needed to extend market-level programs to other regions or enable different hospital types to achieve savings from bundled payment reimbursement.