How one orthopedic group developed physician-owned bundled payments — And scaled their model

Written by Laura Dyrda | August 05, 2016 | Print  |

Charlotte, N.C.-based OrthoCarolina published an article in the New England Journal of Medicine Catalyst examining the practice’s process for creating a physician-owned bundled payment.

The group, which includes more than 100 physicians across several sites, was able to lower costs 10 percent to 30 percent and improve outcomes for hip and knee replacement surgery by creating a standardized coordinated care program and commercial bundled payment contracts. In the bundles, surgeons took primary financial risk, according to the report.

 

Before the program was in place, employers were incentivizing patients to go into narrow networks for surgery in other states and the health systems in the area weren’t prepared to enter into risk-baring contracts or lower prices.

 

However, OrthoCarolina was ready to explore bundled payments. Here are a few key steps they took:

 

1. Invested in technology to collect patient-reported outcomes at regular intervals before and after surgery.

 

2. Collected hospital-based data in addition to patient-reported data.

 

3. Invited all total joint replacement surgeons to develop evidence-based common care pathways for hip and knee replacements through a consensus process.

 

4. Eliminated things that didn’t add value to the patient outcome or experience.

 

5. Obtained cost data and negotiated a 90-day bundled rate with one large payer with stop-loss protections and exclusions to limit the physicians’ risk to performance risk instead of actuarial risk. The practice negotiated facility fees with the hospital and professional fees with the clinicians in addition to fees for physical therapy and other providers.

 

6. OrthoCarolina acted as a third-party administrator responsible for paying all participants.

 

7. Achieved cost reductions with a hospital partner.

 

8. Produced a Joint Journal for the bundled patients and families explaining every step of the process to engage patients and families.

 

9. Assigned navigators to guide patients throughout the process and act as a first responder to direct questions.

 

10. Form a coordinated care team with the hospital to make sure the care pathways and expectations were met and communications were consistent. There were weekly huddles to deal with issues and improve patient care processes.

 

Four years after implementing the program, the practice had data on 200 patients who participated in the bundle. They found:

 

• 0 percent reoperations
• 0.5 percent deep vein thrombosis
• 100 percent discharged home
• 100 percent pain control
• One fewer days stayed in the hospital — 2.5 days to 1.5 days
• 98 percent patient satisfaction

 

After creating the program, OrthoCarolina launched a new company to scale the process and bring physician-owned bundled payments to other facilities.

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