The CORE Institute's condition-based bundles — a new approach to eliminating waste

Written by Laura Dyrda | December 20, 2016 | Print  |

The Harvard Business Review profiled Phoenix-based The CORE Institute's new condition-based approach to eliminating unnecessary care as an alternative to procedure-based bundled payments.

In 2009, The CORE Institute took on financial risk for the physician-related medical expenses based on a per member per month fee from the insurance company that totaled around 20 percent of the physician medical expense for care. Now, the practice handles the entire diagnosis-based spend, meaning the provider can choose alternative therapies to surgery.


The practice covers all scenarios, whether it's an MRI, hospitalization after surgery or medication for musculoskeletal pain. The article highlights three key notes about the diagnosis-based payments:


1. The CORE Institute designed the condition-based bundle to keep patients healthy and prevent further issues. The practice has evidence-based protocols and patient pathways to optimize care as well as a postoperative blood clot clinic to prevent patients from returning to the ER with blood clot-related issues after surgery.


2. The condition-based model incentivizes physicians to select high value treatment, whether it's operative or nonoperative.


3. The CORE Institute physicians can choose the site of service — a hospital, surgery center or another facility. The CMS bundled payment program currently focuses on hospital admissions, a more expensive site of service.


The practice implemented analytics and practice management tools to track patient information and automate functions when possible to remain efficient, effective and compliant. The CORE Institute's IT has become so sophisticated they now have launched predictive analytics tools with the ability to identify the most successful site for patients to recover from surgery, among other uses.


Since beginning the condition-based care program in 2012, the organization has reduced per member per month costs by around 50 percent with some at-risk patient populations and showed their costs are around 30 percent lower than others in the region. Savings primarily came from fewer readmissions after surgery and discharging fewer patients to nursing homes.


"For medical conditions or sets of related medical conditions that can easily be treated on their own, the advantage of the condition-based payment model relative to the global payments model is that the provider is only financially accountable for the types of diagnoses that it can reasonably influence," wrote David J. Jacofsky, MD, CEO and founder of The CORE Institute, and Derek A. Haas, project director of the Value-Based Care Delivery initiative and Harvard Business School fellow, in the article.


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5 key thoughts on value-based payments for rural practices

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