Explaining bundled payments and why they drive down healthcare costs

What are bundled payments and why do they drive down healthcare costs?

Second of two parts.

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.