The Michigan Value Collaborative

Helping Michigan hospitals achieve their best possible patient outcomes at the lowest reasonable cost

Tag: Bundled payments (page 1 of 5)

Using Clinical Pillars to enhance value in a Joint Replacement Bundled Payment Program

Deby Evans

Deb Evans is the MVC Site Engagement Manager

An article published in the Journal of Arthroplasty in June 2017 discussed 5 clinical pillars that one hospital in New York identified for enhancing value in their joint replacement practices through the bundled payment program.

  1. Optimizing patient selection and comorbidities: The hospital identified common comorbidities within their Total Joint Arthroplasty (TJA) patient population. The most frequent were found to be musculoskeletal comorbidities, hypertension, hyperlipidemia, tobacco use and diabetes. Each of these comorbidities is associated with an increased risk for readmission. By incorporating the use of a readmission risk assessment tool (RRAT) into the Perioperative Orthopedic Surgical Home (POSH) initiative, the hospital identifies patients that are at high risk for readmission and delays surgery in favor of working to optimize the patient’s modifiable risk factors. By getting the patient in optimal condition for surgery, the risk of an unplanned readmission can be reduced, saving the hospital the associated costs.
  2. Optimizing care coordination, patient education, shared decision-making and patient expectations: Multiple studies have shown that splintered care pathways, unnecessary services and a lack of patient-centered care negatively impact clinical outcomes. Characteristics of programs that displayed improved patient outcomes were synchronized management among the patient’s care team and managing the expectations of the patient and family. The goal for this hospital was to institute a streamlined pathway for the duration of the episode of care that focused on collaborative decision making and standardized pathway criteria.
  3. Multimodal analgesia: An increased length of stay not only affects cost but also increases the risk of readmission. One of the factors known to influence length of stay is pain management. This facility reviewed their pain management protocol and made changes with the intention of decreasing opioid use while maintaining pain relief as well as facilitating early ambulation and rehabilitation and decreasing falls. These principles help to reduce length of stay by expediting discharge and decreasing the use of post-acute care facilities.
  4. Risk-stratified Venous Thromboembolic disease (VTED) prophylaxis: Use of an aggressive mode of VTED prophylaxis may be effective in preventing venous thrombosis, but has also shown to increase the risk of major complications. The institution performed a study to analyze their adapted risk-stratification algorithm with positive results. The use of this algorithm to identify which VTED prophylaxis trajectory was most appropriate helped the hospital optimize care and reduce costs.
  5. Minimize Post-acute care facility and resource utilization: Increased costs have been shown to be related to the use of post-acute care facilities and the associated resource utilization. In an effort to help control post-acute care costs, this institution worked on identifying selected post-acute care partners. Once identified the hospital and the partnering skilled nursing facility increased communication and collaboration through meetings and performance and resource utilization monitoring. By establishing these partnerships post-acute care length of stay was reduced with associated cost savings.

Through focusing on these five clinical pillars, this New York hospital was able to identify areas of improvement and subsequently implement initiatives targeted towards care and cost improvement. If your hospital is interested in identifying five clinical pillars of focus, the MVC Coordinating Center can help  identify common readmission diagnoses, along with post- acute care SNF utilization and length of stay information.

Moreover, the MVC Coordinating Center, in conjunction with MARCQI and MOPEN, is also holding workgroups on November 30th and December 7th to discuss pre- and post- surgical pain management. If you are interested in joining either of the workgroups, please register here.

Please contact Abeer Yassine at or Deb Evans at  for more information and if you have any questions.

Optimizing Post-Acute Care Spending: Care Setting or Intensity?

Scott Regenbogen

Dr. Regenbogen is a Co-Director of MVC and an Assistant Professor of Surgery at the University of Michigan.

MVC hospitals confronting the CMS Episode Payment Models, BCBSM Hospital P4P metrics, and other episode-based measures ask themselves (and us): “Where can we find opportunities to reduce episode spending?” A publication in last month’s Health Affairs authored by several members of the MVC Leadership, may help. This study suggests that hospitals can most effectively address post-discharge ancillary care costs by examining how frequently they choose to send their patients to inpatient rehabilitation care facilities after discharge.

In the past, we have found the greatest point of leverage in overall episode spending involves post-acute care services. An often cited paper from our previous MVC Director and current Associate for Strategy, David Miller, found that post-acute care was responsible for the greatest share of variation in episode payments after inpatient surgery, ranging from 31% for coronary bypass (CABG) to 85% for hip replacement (THR). However, it is less obvious how a hospital would set about addressing their patients’ post-acute care spending if they found themselves to be high utilizers.

This new study — authored by MVC Associate Director Lena Chen, Economist Edward Norton, and Co-Director Scott Regenbogen — asks a simple question: do high post-acute care expenditures result from (i) the decision to use any post-acute care; (ii) the choice of what kind of post-acute care to use; or (iii) the quantity of services used once enrolled in post-acute care.

To answer these questions, the study identified hospitals nationwide in the highest and lowest quintiles of post-acute care spending for fee-for-service Medicare beneficiaries undergoing colectomy, CABG, and THR. It then performed both price standardization and risk-adjustment, as we do in MVC data, to allow uniform comparisons of the spending that would be expected if all hospitals treated clinically similar patients under similar regional price and wage constraints. Next, it evaluated the degree to which remaining differences in utilization and spending could be explained by the choice of setting (home without services, home with visiting nursing or in-home rehabilitation, inpatient skilled nursing, inpatient rehabilitation etc.) versus the intensity of care (the quantity of services billed within the chosen modality of care). This analysis used the Oaxaca-Blinder decompensation method to identify the separate contributions of factors within and between the care settings.

The choice to use any inpatient rehabilitation explained the largest share of all variation in adjusted post-acute care spending, ranging from 26% for colectomy to 52% for CABG. The intensity of use of inpatient rehabilitation, in contrast, explained 3% or less of differences. Choice of skilled nursing was responsible for 16-25% of variation, and choice of home health accounted for another 8-13%. The only site and condition for which the intensity of care made a meaningful contribution was in skilled nursing facilities after colectomy, where the quantity of billed services contributed to 20% of variation.

These findings suggest that hospitals seeking to reduce their post-acute care costs after major inpatient surgery should first examine the proportion of their patients that enter the most expensive types of care after discharge. In general, they need worry less about the quantity of services that get used once the patients arrive there.

The research was supported by the National Institute of Aging (Grant No. P01AG019783-0751). Dr. Chen was also supported by the Agency for Healthcare Research and Quality (Grant No. K08HS020671).

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