WASHINGTON -- How physicians are paid shapes the way care is delivered, but there can be unintended consequences of certain payment models.
At an American Enterprise Institute briefing Wednesday, Kevin Bozic, MD, MBA, an orthopaedic surgeon and professor at Dell ľֱ School at the University of Texas at Austin, told the story of a 68-year-old patient who had a knee replacement through Medicare's Bundled Payment for Care Improvement (BPCI) model.
It was a "perfect bundle," at least per Medicare's terms. The patient stayed in the hospital for only 1 night, and was discharged directly to her home without any post-acute care. She had no complications and no readmissions within 90 days of the surgery, he said.
However, when she visited Bozic 18 months later, she was miserable, he said. Why? The surgery wasn't right for that patient.
"A knee replacement, as effective as it is, is not a good treatment for anxiety and depression," which had gone unnoticed and untreated in the patient, he explained.
One-third of patients seen for joint pain screen positive for anxiety and depression, which needs to be treated "way before" anyone considers a major surgery like a knee replacement, he said.
But multiple factors make surgery more attractive for patients and for providers, Bozic told ľֱ after the briefing. For instance, patients may be looking for a "quick fix," payment systems incentivize more services, and providers lack the "collective expertise" to address problems in more comprehensive ways because healthcare systems are fragmented, he noted.
Instead of bundling at the procedure level, Bozic said he believes in bundling "upstream" at the condition level.
At his institution, many providers have adopted a different bundled payment model for managing hip and knee arthritis. The care team includes behavioral health specialists, nutritionists, physical therapists, chiropractors, acupuncturists, advanced practice nurses, and surgeons.
All patients seen for joint pain have their pain evaluated, along with their functional status and quality of life. Mental health is also evaluated using validated tools. Together, these evaluations help determine the most appropriate treatment for the individual patient.
"I am the least important person on that team," said Bozic, noting that only 10%-15% of patients with joint pain are appropriately referred for surgical treatment.
Just as the procedural level bundles encourage better care coordination among acute and post-acute providers, bundling at the condition level incentivizes better care coordination across an array of providers who manage arthritis, he said.
During 18 months of using this model, Bozic said his group has seen "significantly" reduced per-capita costs through better patient management, which includes lowering the number of surgeries by 25%. The incorporation of nutritional and behavioral health-related services also improves patients' overall health.
Bozic emphasized that "bundling at the procedure level limits value creation by ignoring the concept of appropriateness." Bundling by condition improves care coordination, helps remove the incentive for more procedures, and measures what matters most to patients -- pain, quality of life, functional status, and overall mental health.
Asked how providers might adopt a similar model, Bozic advised targeting high-volume, high-cost conditions.
"You wouldn't do this for some rare skin disorder because it doesn't justify the investment in either the outcomes measurement or the team," he noted.
A team needs to be assembled to focus on managing a particular condition, then agree on what to measure, and determine whether the intervention is having a meaningful impact, he said.
Bozic pointed out that providers have to commit to stepping away from fee-for-service and commit to contracts at the condition-level for this model to be successful.
"We are pushing payers as hard as possible to pay us with risk based on outcomes at the condition level," he said.
In another panel at the briefing, Gail Wilensky, PhD, an economist and senior fellow at Project HOPE in Bethesda, Maryland, said one benefit of a condition-based model is that providers are more likely to target the "relevant" medical problem.
"It's not the right treatment if it doesn't get at what matters to the patient," said Wilensky, who headed the Centers for Medicare & Medicaid Services (when it was known as the Health Care Financing Administration) under President George H.W. Bush.
As for challenges in scaling condition-centric bundled payment models, there isn't "a natural current organization structure" that fits these models, Wilensky said. "You really do have to be flexible in your thinking -- think virtual (telemedicine) -- and have cooperative regulatory groups and payers to be able to support that. But it is much closer to what makes sense."
The briefing was co-sponsored by the USC-Brookings Schaeffer Initiative for Health Policy and the Pacific Business Group on Health.