Episodes of Care and Accountable Care Organizations appear to be part of your
future. They were initially promoted by
MedPAC as the only opportunity to realize any real cost savings supported by
Rand research, and now it has been taken up by Congress in their health care reform
bills. The Senate Bill, America’s Health
Future Act of 2009, calls for the Department of Health and Human Services to
develop and evaluate bundled payments for acute inpatient hospital services and
post-acute care for an Episode of Care that begins three days before
hospitalization and spans 30 days following discharge. The House Tri-Committee on America’s
Affordable Health Choices Act of 2009 also asks that Accountable Care Organizations,
bundled payments and medical homes be adopted on a large scale if pilot
programs prove they are effective at reducing cost.
CMS has already moved
forward with efforts to assess the impact of bundled payments on reducing cost,
improving efficiency and improving quality and patient health through their
Acute Care Episode bundled payment initiative.
The hospitals provided a bundled charge for certain orthopedic and
cardiovascular procedures and associated care, and any savings generated by
their ability to provide care for that sum, below the standard DRG payment, will
be shared by CMS, the hospital and the patient.
The ACE demonstration is currently limited to inpatient stays but they
are looking at expanding the project to post acute care and to address hospital
readmissions. The ACE Demonstration was
slated to begin in 2009, but only three of the five selected facilities began
their participation in 2009.
Baptist Healthcare was
one of the first ACE hospitals to begin the program and they are already seeing
results from their roll out of the program.
Baptist was able to enlist the participation of doctors by ensuring that
they would be paid, at a minimum, their full part B benefits, yet allowing them
to share in any hospital bonuses. In the
first month, Baptist only paid monthly bonuses to a few of the 150 or so
eligible doctors. Over time, however,
that number has grown to bonus payments to 90 doctors. They have found that their savings are in the
seven figures, largely driven by standardizing options for expensive medical
devices, but they have also seen an increase in their quality scores and they
have been able to reduce patient lengths of stay and post surgical infection
If Baptist’s results are
shared with the other demonstration facilities, than a broader adoption of a
bundled payment could create significant cost savings for Medicare. In general, however, most agree that any
real quality improvements and cost savings can only be gained through
addressing the entire continuum of care for a patient and making sure that all
providers of care have the same motivations and goals. Since not all providers work within the
hospital structure, other payment models are needed to address these gaps in
care. Some private programs, such as the
Prometheus Project, are addressing those gaps by looking at chronic disease
management bundles. Medical homes and
other state and private initiatives are also underway, so the actual structure
of any future bundled payment model remains undefined.