The keys to widespread bundled payments in orthopedics


Bundled payments provide a single payment for an episode of care and have been adopted by some insurers and healthcare companies.Two surgeons share their ideas on making bundled payments widely adopted in orthopedics.

Ask Orthopedic Surgeons is a weekly series of questions posed to surgeons around the country about clinical, business and policy issues affecting orthopedic care. We invite all orthopedic surgeon and specialist responses.

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Please send responses to Carly Behm at by 5 p.m. CDT Wednesday, Aug. 10.

Editor's note: Responses were lightly edited for clarity and length.

Question: How can bundled payments become more widely adopted in orthopedic surgery?

Philip Louie, MD. Virginia Mason Franciscan Health (Seattle): Bundled payments are a form of value-based payment strategies that orthopedic surgeons must be aware of, as there are both risks and benefits that directly impact their practices. I think the adoption of bundled payments in orthopedic surgery is incredibly multifactorial, so I'll focus on a couple specific areas. But, there are certainly several major factors that need to be considered. One of the greatest barriers to wide adoption of bundled payments is the lack of transparency surrounding the distribution of cost savings. There are several major stakeholders that are all involved in patient care — the hospital itself, the surgeons and those providers also participating in the episode of care. There must be defined criteria (that is agreed upon by all parties) established to create gain-sharing formulas prior to entering the bundled care agreements (i.e., cost of care, quality of care and minimum volumes achieved for eligibility in the program). A well-designed and transparent plan will avoid many disputes regarding how cost savings are eventually distributed. Each stakeholder wants to feel valued. The second area that I want to highlight is creating boundaries and requirements that decrease the incentive to "cherry pick" healthy patients or cut corners with regards to patient care in an effort to reduce overall costs. As there is a growing divide developing with disparities in surgical care in many regions of the country, we need to make sure that we continue to provide value-based and safe care to all communities.

David Kalainov, MD. Northwestern Medicine (Chicago): In the current healthcare environment, stakeholder education, appropriate care infrastructure and financial viability are key to gaining greater adoption of bundled payments in orthopedic surgery. I suspect that many orthopedic surgeons are unaware of their current participation and available opportunities for inclusion in one or more bundled payment models. Participation can be through the Centers for Medicare and Medicaid Services, a commercial health insurance carrier or a business entity. The most common bundled payment models in orthopedics are for hip and knee replacement surgery. A set reimbursement from the payer may be expected to cover all services associated with the operation, including a skilled nursing facility stay. Fair risk adjustments by the payers, financial projections/analyses by the care providers, and a multidisciplinary team of skilled and cost-conscious providers (surgeons, advanced practice providers, nurses, social workers, physiotherapists, and others) are important for high quality and success of bundled payment models. Simply put, an increase in the perceived value of bundled payment models will lead to wider adoption.

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