Initiative aims for improved care at lower cost
A couple of years ago, Medicare sent cost reports to every Western Pennsylvania hospital, detailing how federal dollars were being spent for patients who underwent hip replacement operations at each institution — how much for surgery, rehabilitation, nursing home and all the rest.
Excela Health orthopedic surgeon Gregory Bisignani said poring over the figures became a bonding experience.
“For the first time in 20 years, we could see the numbers, see where the money was being spent, to identify savings,” Dr. Bisignani said. “It brought everybody together.”
Guided by the Medicare cost report, Excela tweaked the way it treated patients undergoing hip replacement surgery, besting its two bigger academic medical center peers in Pittsburgh with an “excellent” rating for quality, while earning some of the savings generated through improved efficiencies.
In addition to lower cost of care, Excela’s results in the first year of Medicare’s Comprehensive Care for Joint Replacement Model included fewer hospital readmissions for such things as
implant failure and infection.
Cutting medical costs while improving quality of care is a big challenge, but Medicare and private insurers are turning away from the traditional way of paying doctors and hospitals, called fee for service, to reward providers for the quality of the care they provide and how well the patient does.
Medicare’s alternative reimbursement plans have been around for years — the first one was introduced in 1991. The idea has gotten legs since then, with the latest version of bundled payments starting in October and covering 32 episodes of care.
Alternative ways of paying for medical care are here to stay, said Chris Garcia, CEO of Remedy Partners, a Darien, Conn.-based consultant.
“We anticipate that bundled payments will become a permanent part of Medicare in the next five years,” Mr. Garcia said. “The only way you make money in the program is if the patient achieves a better outcome.”
Starting the program
Here’s how the hip replacement program started.
In 2016, Medicare began requiring hospitals in Allegheny and six surrounding counties to accept bundled payments for hip and knee replacement surgery — one check for everything from preparing the patient for surgery through the operation and rehabilitation, up to three months after surgery.
The thinking was that a single payment would force doctors and administrators to find ways to reduce costs while meeting Medicare’s quality metrics.
Medicare and hospitals agreed on a certain price for a group of surgery-related services. If the actual cost came in under the target, the hospital pocketed a share of the savings.
Excela’s take for the oneyear trial was $85,718. The Greensburg-based hospital system received an “excellent” quality rating from Medicare, which compares to a rating of “good” for Allegheny General Hospital and six UPMC hospitals, including UPMC Presbyterian.
A close look at the Medicare numbers showed that rehabilitation in a nursing home was a sweet spot for savings.
About one-third of the total cost of an average surgical procedure covers care outside the hospital, Remedy Partners’ Mr. Garcia said. The average cost is $500 a day and 28 days is the average nursing home stay for rehabilitation, for a total average cost of $14,000.
“There are many patients whocould equally recover in the home setting,” Mr. Garcia said.
Excela orthopedic surgeon Christopher Bellicini said 75 percent to 80 percent of his hip replacement patients go home the day of surgery, where they receive rehabilitation care.
“Common sense and hard work are very inexpensive tools, and using them, we’re able to cut cost,” Dr. Bellicini said.
Navigating the system
Nationwide, Medicare paid for more than 400,000 hip and knee replacement operations in 2014 at a cost exceeding $7 billion for hospitalizations alone, according to the Centers for Medicare and Medicaid Services, which oversees Medicare.
Medicare pays between $16,500 and $33,000 for joint replacement surgery, hospitalization and recovery, nationwide, and complication rates from infection or failure of the implant can triple the cost.
When Medicare’s test kitchen — the Center for Medicare and Medicaid Innovation — rolled out the bundled payment initiative for joint replacement surgery in 2016, hospitals in 67 geographic areas of the country, including Pittsburgh, were mandated to participate. Overall, government savings were estimated at $36 million for 2017.
Since then, hospital participation in the trial became voluntary.
Six surgeons perform about 1,300 joint replacement operations annually at two of Excela’s three hospitals. To up its game, Excela shifted two veteran nurses to orthopedics to act as patient guides.
“So many patients really need help navigating the health care system,” said Pam Kaczmarkiewicz, a registered nurse for 26 years and one of the Excela nurse navigators. “They get nervous right up to the day of the surgery, asking questions.”
Debilitating pain often forces patients to decide when to schedule joint replacement surgery and the nurses are there in the doctor’s office when the decision is made. The introduction comes with a business card, complete with the nurse’s picture and cell number.
Then the nurse tracks each patient through the pre-surgery education class, operation, recovery and rehabilitation.
Ms. Kaczmarkiewicz helped self-employed builder Mark Rega through hip replacement surgery in September. Mr. Rega, 58, of Latrobe, remembers getting answers quickly to his questions about how his high blood pressure would affect his operation and recovery and other issues.
“She was top-notch, topnotch,” Mr. Rega said. “She’s just really on it.”
Mr. Rega recovered at home with visits from a physical therapist and later, as he grew stronger, visits to an Excela outpatient rehabilitation center. Most recently, his doctor cleared him to climb ladders again.
Before Excela’s involvement in the Medicare program, 17 percent to 20 percent of its patients left the hospital for rehabilitation in a nursing home.
Excela has been achieving rates of 10 percent and 12 percent since starting the program, Ms. Kaczmarkiewicz said.
The average stay in a nursing home for Excela patients is 20 days, which the hospital system shrunk to less than five days with the help of the nurse navigators.
Surgical patients who have to be readmitted to the hospital because of infections and other reasons can blow a hole in a hospital’s savings; Medicare has given doctors and nurses a financial incentive to keep that from happening.
Hospital readmission rates for Excela’s joint replacement patients are under 1 percent, down from 7 percent to 10 percent before the start of the Medicare program.
“They’re making a difference,” said Denise Addis, who is director, medical quality at Excela. “We’re moving the dime on this.”