Value-Based Health Care

Posted on Tuesday, November 29, 2016 in Signature Care Management

Everyone, it seems, is talking about trying to reduce the cost of healthcare. At Signature Medical Group, we're actually doing something about it. Signature is a national leader in value-based care that can reduce costs and improve outcomes for patients.

How does value-based care differ from traditional healthcare models?

In value-based care, doctors and hospitals are reimbursed for helping keep people healthy and for improving the health of those who have chronic conditions in a cost-effective way.

This differs from traditional fee-for-service (FFS) reimbursement, the payment method most widely used in healthcare. With FFS, doctors and hospitals are reimbursed based on the number of services they deliver, such as tests and procedures. Payment generally has little to do with whether a patient's health improves.

Under FFS, healthcare is fragmented with many providers who lack the focus on the overall value of care for the patient. Many healthcare experts believe that FFS is a major reason costs have driven upward.

Proponents of value-based care maintain that coordination of a patient's care between all providers improves quality and leads to more savings.

The promise of value-based care is especially important to Medicare. Baby boomers are now entering Medicare in record numbers, and with rising costs, the viability of the program is in jeopardy. For this reason, the agency that oversees Medicare has created a number of value-based care models to determine if providers can help Medicare rein in spending without diminishing the quality of care.

Signature Medical Group has tackled the challenge to reduce cost and improve care through its voluntary participation in Medicare's Bundled Payments for Care Improvement initiative. BPCI links payments for the many services Medicare patients receive in an episode of care, such as a hip or knee joint replacement.

At Signature Medical Group, we're proud of our role as a leader in transforming the nation's healthcare delivery system.

Signature is an awardee/convener in Medicare's Bundled Payments for Care Improvement initiative. As such, Signature has a unique responsibility-helping other physician groups around the country implement a bundled payments program for all the acute and post-acute orthopedic care of Medicare beneficiaries. Signature is the only independent doctors' group in the country to receive this designation for this model of care.

BPCI was created by the Center of Medicare and Medicaid Innovation to test new models of reimbursement for value-based healthcare (see Part I of this series).

Since the program's inception in January 2014, Signature has worked to build the nation's largest integrated orthopedic bundled payments program. We now oversee 2,000 independent doctors in 55 orthopedic groups in 26 states. They perform 50,000 hip and knee joint replacements annually.

In the program, doctors manage all care and services their patients receive for a 90-day episode of care, such as a hip or knee joint replacement. BPCI is the epitome of value-based care because reimbursement to doctors is subject to meeting quality and cost targets. For example, if the total cost of care for an episode exceeds the historic baseline, the doctor in charge must reimburse Medicare for the overage.

Signature and its partner physician groups have achieved significant cost savings for Medicare while improving the quality of care for their patients. Successes include:

  • Reduced cost per case in a hip or knee joint replacement ranging from $1,000 to $5,000.
  • Reduced inpatient rehabilitation use by 20-80 percent.
  • Reduced hospital readmission rates by 12-50 percent.
  • Reduced skilled nursing facility utilization by 10-50 percent.
  • Average patient satisfaction scores of over 97 percent.

Through its leadership and innovation, Signature Medical Group has shown enhanced care of patients through physician-led medicine can significantly improve outcomes and reduce costs nationwide.


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