Bundled payments for hip, knee replacement reduced costs with no change in complications

The mandatory bundled payment programs saved costs largely because fewer patients were sent to post-acute care facilities after hip or knee replacements, a study found.


The implementation of mandatory bundled payments for joint replacement was associated with reduced spending and no change in complication rates, a recent study found.

The study analyzed the effects of Medicare's Comprehensive Care for Joint Replacement (CJR) program, which, starting in 2016, randomly assigned hospitals in some areas to receive bundled payments for hip or knee replacement. Using Medicare claims from 2015 through 2017, the authors compared 280,161 hip- or knee-replacement procedures at 803 hospitals in 75 metropolitan statistical areas that were assigned bundled payments to 377,278 procedures at 962 hospitals in 121 control areas that didn't have bundled payments for joint replacement. Results were published by the New England Journal of Medicine on Jan. 2.

The study found greater decreases in institutional spending per joint-replacement episode in the treatment areas than in control areas; the between-group difference was −$812, or a −3.1% differential decrease (P<0.001). This difference was driven largely by a 5.9% decrease in patients discharged to post-acute care facilities. There were no significant differences in the composite rate of complications (P=0.67) or the percentage of joint-replacement procedures performed in high-risk patients (P=0.81).

The mandatory nature of the CJR model made it an unusual and controversial experiment in payment reform, the study authors noted. The Trump administration changed it to a partly voluntary program in March 2018, but the data used in this study help answer the question of whether benefits seen from previous bundled payment programs were attributable to hospitals volunteering to participate. “Our findings suggest that the changes observed in voluntary programs may be echoed in mandatory programs,” the authors wrote. They also found that spending was decreasing over the studied 18 months, suggesting that greater cost reductions might eventually be seen from the program.

The authors said that it is not surprising that the savings mostly came from reductions in the use of post-acute care services, because this is a large and highly variable component of the cost of joint replacements, and “hospitals may have successfully identified patients who are at the margin of needing post-acute care services who could instead be safely discharged home with home health services.” They noted that the study did not include patient-centered outcome measures, including functional status, pain, and satisfaction. Other limitations of the study include that its results may not be generalizable to bundled payment programs other than hip- or knee-replacement procedures.