Page 26 - Hoag Orthopedic Institute 2015 Outcomes Report

VALUE
BUNDLED PAYMENTS
Medicare has traditionally made separate payments to providers for each of the individual services they furnish to beneficiaries for a single illness or course of treatment. This system
has resulted in fragmented care with minimal coordination among providers and across health care settings. Payments rewarded the quantity of services offered by providers, rather than the quality of care furnished.
Next generation health care is all about optimizing patient outcomes while minimizing expenses. The Affordable Care Act includes tools to improve the quality of health care that can also lower costs for taxpayers and patients. Research has shown that bundled payments can align incentives for providers, including hospitals, post-acute care providers and physicians, and encourages them to work closely together across all specialties and settings.
Transitioning to a value-based system requires new delivery and business models. Under the CMS Bundled Payments for Care Improvement initiative, organizations revise their infrastructure to enter into payment arrangements that include financial and performance accountability for episodes of care.
HOI has developed a bundled payment program with three local commercial payers, which covers facility and professional costs for certain
procedures and includes a warranty period.
Two global payment programs cover facility and professional costs during the surgical episode. One of these is for cash-pay accounts, and the other involves a third-party administrator that coordinates medical travel cases for self-insured employers.
The bundled payment initiative was launched by CMS in 2013, yet HOI became an early adopter of the bundled payment model in 2011, and was the lead hospital in the California bundled payment pilot for the commercial payer market. Since that time, Cigna, Aetna and Blue Shield have continued to contract with HOI on bundled payments for joint replacement procedures. So far, more than 250 bundled payment episodes have been generated.
HOI has achieved high levels of patient satisfaction through its bundled payment plans. Advantages the bundled and global payment models provide to payers and patients include price transparency and predictability for specific procedures and care pathways. The HOI bundle payment program
is also available to self-pay patients and to self-insured employers via their third party plan administrators.
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