Bundled payment predicament
Study looks at varied costs of post-discharge care
Variation in what Medicare pays for certain surgeries raises questions about how best to care for patients after they leave the hospital, according to a study. The research, published in the journal Health Affairs, also suggests that financial incentives for many hospitals under bundled payment models may prove to be a “wash,” the authors said.
Many hospitals were high cost for one surgery, but not others, the study found. Therefore, bundled payments— under which hospitals receive a lump sum for multiple medical services related to a procedure— could offer financial gains for some surgeries but create financial pressure for others.
Researchers with the University of Michigan and the Dartmouth Institute for Health Policy and Clinical Practice analyzed Medicare spending on four surgeries from the point at which patients entered the hospital through 30 days after they left.
Post-discharge care and physician services largely accounted for the 10% to 40% difference between high-cost and low-cost hospitals, after researchers accounted for geographic cost differences—such as cost of living—and the severity and complexity of patients’ conditions.
David Miller, an assistant professor at the University of Michigan Medical School in Ann Arbor and one of the study’s authors, said the findings could lead to further research that would identify which post-discharge care is “money well spent” and which may be opportunities to eliminate costly waste.
Skilled nursing, home healthcare and rehabilitation hospitals were the source of “a large and highly variable” amount of payments after accounting for differences in geographic costs and illness, the study said.
Hospitals in the highest quintile received $2,500 to $7,750 more than hospitals in the lowest quintile based on the analysis of Medicare fee-for-service hip replacement, coronary artery bypass graft, back and colectomy surgery patients between January 2005 and November 2007. For hip replacements, post-discharge care accounted for 85% of the difference between the highest-cost and lowest-cost hospitals.
The numbers suggest, the researchers wrote, that “strong incentives exist for the CMS to expand or refine its bundled payment policies to include spending for home health, rehabilitative and skilled-nursing services provided after hospital discharge.”