Archive May 2018 XIX, No. 5

The Brave New World of Bundled Joint Payments

Expert advice on how to succeed in a packaged-price model with hugely popular and highly expensive joint replacements.

Kendal Gapinski

Kendal Gapinski, Contributing Editor


Joint Surgery
PURCHASING POWER A key to a successful bundled joint program is standardizing your implants and negotiating the best price for artificial knees and hips.

Bundled payments are advancing across surgical specialties, but joint replacement is at the forefront of the packaged pricing movement. Some say total joints is the ideal condition for applying a fixed price to individual episodes of care because of a surgical technique that's uneven and lacks uniformity.

"Total joints is an incredibly high-volume and high-expense procedure," says Sharat K. Kusuma, MD, FAAOS, MBA, a surgical consultant and former director of adult reconstruction at the Grant Medical Center in Columbus, Ohio. "The problem is that the variability in the procedure is unacceptable. Bundled payments force clinicians to consider how their technique is impacting the overall cost and standardize to make care more consistent."

If you're thinking of participating in a bundled payment program for total joints, keep in mind that these programs require your facility to take on more responsibility of the total care of the patient during and after the procedure — beginning with admission and ending 90 days after discharge. But some say the rewards of better quality, tighter care coordination and lower costs might make it worthwhile.

A standard joint replacement bundle is around $30,000 for a 90-day episode, with average savings ranging from $1,000 to $5,000, says Amol Navathe, MD, PhD, an assistant professor at the University of Pennsylvania in Philadelphia, Pa.

"There's a lot of variation across total joint cases that can be smoothed out and waste that can be cut out, and those savings can then be split among the other stakeholders," says Dr. Navathe. "Bundling payments for a total episode of care for total joint cases is becoming more popular, since it's ideal for creating alignment with insurance providers, the physician, nurses and physical therapists."

There's also a "day-of-surgery" only model that covers the surgery center, the surgeon and the anesthesiologist for about $20,000, says Stephen Lucey, MD, an orthopedic surgeon at the Surgical Center of Greensboro (N.C.). Dr. Lucy and a group of orthopods formed Delta Joint Management Group to help organize and implement a bundled payment program at their surgical center.

"With our model the surgeon runs the business and takes the risk so he may receive more reward than just his surgical fee if results are excellent and the business does well," says Dr. Lucy.

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