• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

MassDevice

The Medical Device Business Journal — Medical Device News & Articles | MassDevice

  • Latest News
    • Cardiovascular
    • Orthopedics
  • Wall Street Beat
    • Funding Roundup
    • Mergers & Acquisitions
  • Podcasts
    • MPR: Breakthrough Products Series
  • Resources
    • About MassDevice
    • Newsletter Signup
    • Job Board
    • Leadership in Medtech
    • Manufacturer Search
    • MedTech 100 Index
    • Videos
    • Whitepapers
  • DeviceTalks Tuesdays
    • DeviceTalks
  • Coronavirus: Live updates
Home » Medicare’s bundled ortho payments yield modest savings

Medicare’s bundled ortho payments yield modest savings

January 2, 2019 By Nancy Crotti

Medicare’s randomized trial of a new bundled payment model for hip and knee replacement surgeries led to $812 in savings per procedure, a 3.1% reduction in costs when compared with traditional means of paying for care, according to new research.

The study from Harvard T.H. Chan School of Public Health and Harvard Medical School found that the bundled payment model was also associated with a reduction in the use of skilled nursing care after hospitalization, but had no effects on complication rates among patients.

Published online today in the New England Journal of Medicine, the study confirms what an earlier Medicare study had found in terms of savings. In September, the Centers for Medicare & Medicaid Services (CMS) announced that Medicare payments for lower extremity joint replacement care fell by 3.3% among participating hospitals compared to a control group in the first year of its bundled payment pilot program. Quality of care was maintained in both settings, the federal health insurer said.

“Interest in bundled payments has exploded the past few years,” said Michael Barnett, one of the lead authors on the study and assistant professor of health policy and management at Harvard Chan School. “The big question has always been whether this new model can lead hospitals to meaningfully reduce spending without harming patients. This study indicates that with the right financial incentive, hospitals can save money without compromising quality by sending more patients home rather than to a nursing facility.”

Bundled payments are an alternative payment strategy that health plans, Medicare, and Medicaid are experimenting with to reduce expenses. Unlike traditional fee-for-service payments, bundled payments provide a single, fixed payment for a procedure and follow-up care rather than individually paying all parties separately.

In January 2016, CMS required all hospitals in 67 geographic areas to participate in the five-year “Comprehensive Care for Joint Replacement” (CJR) program aimed at lowering healthcare costs and improving outcomes. The program bundles payments for hip and knee replacements from hospital admission to 90 days after discharge.

Under the model, hospitals in the selected cities received bonuses or penalties depending on how much they spent on follow-up care 90 days after joint-replacement patients were discharged. The program is the largest randomized policy experiment in Medicare to date of a new payment model.

To determine if the bundled payment model was effective at reducing costs and complications, the Harvard researchers analyzed data from the first two years of the program (2016-2017). They compared costs associated with 280,161 joint replacement procedures in 803 hospitals that were required to participate in the bundled payment program with 377,278 procedures in 962 hospitals that were not participating in the program.

The analysis showed that before accounting for administrative costs, bonuses and penalties, the bundled payment model resulted in a modest 3% savings for each patient and that complications rates did not increase. The cost savings were driven almost exclusively from reducing the use of post-acute care nursing facilities, the researchers said.

One concern that has been expressed over bundled payments is that such models may incentivize hospitals to avoid operating on sicker, more costly patients. The Harvard study, however, showed that the model had little impact on the number of higher-risk patients who received lower extremity joint replacements.

The study adds to the growing body of evidence that bundled payment models reduce spending without sacrificing quality of care, the researchers said. They added that the cost savings associated with bundled payments grew during the 18-month study period and that it is likely savings would continue to grow as the bundled payment model matured.

“While there is widespread agreement that we need to move away from our typical payment system, how to do so remains unclear,” said Ateev Mehrotra, senior author and associate professor of health care policy at Harvard Medical School. “We need more rigorous experiments such as this one.”

 

Filed Under: Healthcare Reform, Hospital Care, Medicare, News Well, Orthopedics Tagged With: Centers for Medicare and Medicaid Services (CMS), Harvard Medical School, Harvard T.H. Chan School of Public Health, New England Journal of Medicine

In case you missed it

  • BD touts study of antigen test over molecular test for identifying infectious COVID-19 cases
  • Titan Medical closes on $11.5M offering
  • GE ticks up on mixed-bag Q4
  • BD CEO Polen to also serve as board chair
  • Moderna details ‘proactive’ strategy to fight emerging COVID-19 variants  
  • Surmodics’ DCB shown non-inferior to Medtronic’s In.Pact Admiral
  • Longeviti Neuro Solutions ClearFit implant wins FDA clearance for use in ultrasound
  • Medical Alley startups raise $1.4B
  • Johnson & Johnson pharma sales drive Street-beating Q4 results
  • Abbott Panbio rapid antigen test wins CE mark for asymptomatic COVID-19 screening
  • Orthospin wins FDA clearance for robotic external fixation system
  • 3M ticks up on Street-beating Q4, strong healthcare performance
  • Butterfly Network names new CEO before going public via merger
  • Authorities investigating death of California recipient of COVID-19 vaccine
  • FDA clears Aerobiotix system to clean air inside hospitals
  • Inogen names new CEO
  • FDA clears Theranica device for adolescent migraines

RSS From Medical Design & Outsourcing

  • Freudenberg Medical expands U.S. molding operations
    Freudenberg Medical announced that it has expanded injection molding operations at its Baldwin Park, Calif., operation, which is focused on thermoplastics. Freudenberg Medical Baldwin Park has added six injection molding machines including three new Arburg molding machines, a work cell for two-shot molding and a Wittmann Battenfeld micro-molding machine with in-process visual inspection capability. The… […]
  • Cretex Companies names new CEO
    Cretex Companies has announced the retirement of CEO Lynn Schuler effective January 31, 2021. Schuler will be succeeded as CEO by company president and COO Jeff Wollerman. Schuler has been with Cretex Companies for 36 years and held numerous leadership positions, including six years as a business unit president and two years as CFO. Schuler… […]
  • How continuous glucose monitors have transformed the diabetes landscape
    Continuous glucose monitors (CGMs) are among the most potent diabetes management tools to emerge in recent decades. FDA approved the first professional CGM in 1999, and the technology has evolved swiftly since then. Current models beam data via Bluetooth to smartphones (plus the Apple Watch) and the cloud, enabling patients to explore their blood glucose… […]
  • FDA clears Theranica device for adolescent migraines
    Theranica announced today that the FDA has granted expanded clearance for the use of its Nerivio acute migraine treatment device by people 12 years and older. The use of the device in the treatment of adolescents is supported by a study recently published in Headache. According to the study, 28 of 39 (71%) of the… […]
  • Alleviant Medical wins FDA breakthrough device designation for transcath heart failure treatment
    Alleviant Medical (Austin, Texas) has received FDA breakthrough device designation for its no-implant, interatrial shunt technology for treating certain types of chronic heart failure. Founded in 2017, Alleviant’s minimally invasive transcatheter tech decompresses the left atrium without a permanent cardiac implant or open-heart surgery. Alleviant developed the teach to treat people who have heart failure […]
  • AdvaMed wants input on Biden pandemic DPA use
    AdvaMed reacted to President Joe Biden’s plan to use the Defense Production Act (DPA) to tackle the pandemic with some cautionary words. In a letter responding to Biden’s 200-page COVID-19 plan, the medtech trade group asked for collaboration and urged the president to consider the industry’s experience with DPA orders issued by former President Trump.… […]
  • January 2021 Issue: The Leadership in Medical Technology Issue
    9 lessons in crisis management from Stryker CEO Kevin Lobo These 10 stories mattered the most for medtech in 2020 How ResMed is advancing sleep and respiratory care How Dexcom CEO Kevin Sayer is leading the company forward Black engineers group works to promote diversity in medtech, equity in healthcare Taking the guesswork out of… […]
  • Olympus recalls thousands of endo devices due to packaging defect
    Olympus is recalling approximately 26,000 disposable EndoTherapy devices because of a packaging defect that could compromise their sterility. The announcement affects113 models distributed in the U.S.since early 2019, with different numbers of SKUs available in different regions worldwide. The company is asking customers to quarantine the devices until they can be shipped back to Olympus.… […]
  • FDA says to limit mask decontamination to 4 cycles
    Soon after healthcare workers began warning of personal protective equipment (PPE) shortages, companies and other organizations started claiming their decontamination systems could reprocess used filtering facepiece respirators (FFRs) such as N95s up to 20 times. The FDA began issuing emergency use authorizations (EUAs) for FFR decontamination systems with a range of allowable cycles and major… […]
  • 5 innovations to make duodenoscopes more single-use — and save lives
    Duodenoscopes are important medical devices that are used for endoscopic retrograde cholangiopancreatography (ERCP) procedures. However, the devices have had serious problems in the past. Luckily, several medical device companies have stepped in to solve the problems. Duodenoscopes are flexible, lighted tubes threaded through the mouth, throat and stomach into the top of the small intestine.… […]
  • Plastic Molding Manufacturing adds 5 molding machines
    Plastic Molding Manufacturing (Hudson, Mass.) announced that it has added five new injection molding and two coordinate measuring machines in upgrades to its manufacturing and quality operations. The $1 million-plus investment will enable the custom molding company to distribute the pair of 214-ton machines, two 259-ton machines, and a 101-ton machine throughout its manufacturing network,… […]

Primary Sidebar

MEDTECH 100 INDEX

Medtech 100 logo
Market Summary > Current Price
The MedTech 100 is a financial index calculated using the BIG100 companies covered in Medical Design and Outsourcing.
Need Medtech news in a minute?
We Deliver!

MassDevice Enewsletters get you caught up on all the mission critical news you need in med tech. Sign up today.

Tweets by @MassDevice
MDO ad

Footer

MASSDEVICE MEDICAL NETWORK

DeviceTalks
Drug Delivery Business News
Medical Design & Outsourcing
Medical Tubing + Extrusion

MASSDEVICE

Subscribe to MassDevice
Advertise with us
About
Contact us

Add us on Facebook Follow us on Twitter Connect with us on LinkedIn Follow us on YouTube

Copyright © 2021 · WTWH Media LLC and its licensors. All rights reserved.
The material on this site may not be reproduced, distributed, transmitted, cached or otherwise used, except with the prior written permission of WTWH Media.

Advertise | Privacy Policy | RSS