For spine surgery bundled payments, does physician variation matter? 5 key findings


A new study published in the American Journal of Managed Care examines how orthopedic physician practices can vary under bundled payments.


The study authors examined combined claims data and hospital cost data for 3,614 joint replacements performed by 34 physicians. All surgeries were performed under bundled payments at San Antonio-based Baptist Health System. Study authors found:

1. The variation in institutional postacute care provider utilization, implant costs and total episode payments varied significantly between physicians. The difference wasn't explained by observed variables.

2. The intraclass correlation decreased from 0.26 to 0.06 for implant cost over the five-year study period. The institutional PAC provider utilization dropped from 0.15 to 0.13 and the total episode costs went from 0.12 to 0.10.

3. Lower total episode payments and institutional PAC provider utilization occurred with higher physician case volume and quality.

4. There wasn't a change in implant cost between high and low volume physicians.

5. The study authors concluded, "Although some organizational strategies achieve gains by reducing physician variation, variation reduction is not an absolute requisite for success under bundled payment."

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