Last week at JAMA Surgery, a great team from Harvard published an article that looked at the spillover of practice changes from Medicare Fee for Service to Medicare Advantage due to a bundled payment program.(**)
It is unknown whether participating hospitals change care patterns only for patients subject to the payment bundle or if changes spillover onto care for other patients undergoing joint replacement. Spillovers to Medicare Advantage (MA) patients would indicate that clinicians have a consistent approach to discharge planning regardless of payor and would suggest Medicare’s payment reforms have had a broader societal effect….
In hospitals affected by the CJR program, the use of institutional post–acute care differentially decreased by 2.1% (95% CI, −3.9% to −0.2%; P = .03) among MA patients and 2.3% (95% CI, −4.0% to −0.7%; P < .01) among traditional Medicare patients
What does this mean?
- Docs and hospitals respond to incentives if they are sufficiently big and powerful enough
- Docs and hospitals don’t selectively change practice patterns
- Creating the counterfactual for estimating savings is hard
The Comprehensive Joint Replacement (CJR) program is a Medicare effort to bundle payments for the entire episode of care for a knee or hip replacement. The surgical team is giving a big check and from that check, all services associated with a joint replacement have to be paid for. If the surgical team can keep costs underneath the lump sum, they profit. If costs stay above the lump sum, the surgical team eats a loss. This program does a good job of cutting out expensive outliers and squeezing post-acute care spending. It has lowered direct, traditional Medicare costs by about 3% compared to the normal fee for service payment method.
This letter asks if practice patterns are different for people covered by traditional Medicare who are now in this CJR bundled payment model and people who are covered by Medicare Advantage who are not in the payment model.
They find that in hospitals that were required to accept CJR bundles, there were fewer post-acute care claims for all people covered by any Medicare payment stream. Once a hospital is in CJR, practices change for everyone. This makes sense and it aligns with previous knowledge that once a patient is under treatment, clinical practice is usually fairly consistent across payers unless there is a payer intervention.
However, it makes estimating the actual effect of the program harder as there are now direct savings from the Medicare FFS program and then indirect savings in Medicare Advantage. I would also hypothesize that these practice changes cascade to privately insured, Exchange insured and Medicaid patients as well but that is not shown in this study. There has been good evidence that Medicare Advantage has “spill-over” effects once the a certain amount of market share in a county is gained. I think that this paper adds to the growing evidence that payment reform in traditional Medicare also has dynamic spill-over effects into Medicare Advantage. This is good news in the quest for value even as it makes the program evaluator’s job a whole lot harder.
** Wilcock AD, Barnett ML, McWilliams JM, Grabowski DC, Mehrotra A. Association Between Medicare’s Mandatory Joint Replacement Bundled Payment Program and Post–Acute Care Use in Medicare Advantage. JAMA Surg. Published online October 02, 2019. doi:10.1001/jamasurg.2019.3957