Can private practices do orthopedic bundled payments? They're already happening

Written by Laura Dyrda | September 30, 2014 | Print  |

Can orthopedic specialty private practices feasibly provide comprehensive care and compete with hospital-employed surgeons in new care and payment models?

It is possible, as is exemplified by a few large groups around the country. OrthoCarolina was featured in The Charlotte Observer for innovating in providing coordinated care. The practice includes specialists from across the spectrum of care and adopted bundled payments for 90 episodes of care.


Their services also include a patient navigator to guide patients through the process. Blue Cross and Blue Shield of North Carolina contracts with OrthoCarolina for bundled joint replacements performed at a local hospital — Lake Norman Regional Medical Center in Mooresville — with additional contracts "in the works."


"We entered into a spine bundle for a single employer contract," says Daniel Murrey, MD, CEO of OrthoCarolina in Charlotte, N.C., in a Becker's Spine Review report. "It's currently relatively small but we are using it as a place to start and grow from there. Ultimately, most of the procedures we do are going to be paid for in some risk-bearing framework — likely bundled payment — going forward. It will likely be as a subset of population health."


Contracted bundled payments can generally run from $22,000 to $30,000 in North Carolina, according to the Observer report, compared with $27,500 to $47,300 in unbundled payment. Bundled payments could highlight cost and quality discrepancies to eventually reduce current issues with failed outcomes and high prices.


Earlier this year, the AHRQ released a report on California bundled payment programs, primarily headed by hospitals, which were unsuccessful in enrolling enough patients to gather meaningful data to determine whether the bundled payments resulted in better quality or lower costs. The members had difficulty agreeing on inclusion guidelines for the bundled payments and defining the bundle.


But not every orthopedic bundled payment program has had the same difficulty. Hoag Orthopedic Institute in Irvine, Calif., has offered bundled payments since 2008 to attract medical tourism and self-pay individuals. As an orthopedic specialty provider, HOI's program has been successful to gather data and treat patients. The AHRQ report on California's bundled payments noted ambulatory surgery centers participating in the bundled payment were successful in meeting high quality, low-cost goals, but payers were reluctant to send cases their way.


One of the reasons OrthoCarolina has been successful is its volume; the practice includes more than 130 surgeons and 25-plus locations.


Connecticut Joint Replacement Institute at Saint Francis Hospital and Medical Center also bundles payments for orthopedic procedures. They began the bundled payments more than five years ago and are under contract with the state-wide payer ConnectiCare.


"The most important element was creating the transparency between the three groups," says Maureen Geary, Program Manager of CJRI, in a Becker's Spine Review report. "We were able to work together and then take our bundled program to a variety of providers. It has been challenging to align the insurers and employers to assume a shared risk, integrated bundled payment model. However, we were able to sign the first contract in the state of Connecticut for a bundled payment. It was a huge undertaking."


Joint replacement bundled payments are gaining steam, but other orthopedic subspecialties, such as spine, may take more time.


"The biggest roadblock we have right now is spine care frequently isn't given all under the same roof and patients don't have a single plan; they go from one provider to the next," said Dr. Murrey. "If you could take them through the evidence-based protocol, they would have less expensive and more effective care. The challenge is we are still largely in a fee-for-service world that doesn't promote rationing resources and limiting care to what has been proven."


More articles on orthopedic surgery:
Coastal Orthopaedics moves to new Connecticut location
Spartanburg Regional Healthcare System opens sports medicine institute
Dr. Peter Asnis performs knee surgery on Boston Red Sox Clay Buchholz

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