The potential risk of using historic claims to set bundled payment prices: the case of physical therapy after lower extremity joint replacement.

BACKGROUND: One of the most significant challenges of implementing a multi-provider bundled payment contract is to determine an appropriate, casemix-adjusted total bundle price. The most frequently used approach is to leverage historic care utilization based on claims data. However, those claims data may not accurately reflect appropriate care (e.g. due to supplier induced demand and moral hazard effects). This study aims to examine variation in claims-based costs of post-discharge primary care physical therapy (PT) utilization after total knee and hip arthroplasties (TKA/THA) for osteoarthritis patients. METHODS: This retrospective cohort study used multilevel linear regression analyses to predict the factors that explain the variation in the utilization of post-discharge PT after TKA or THA for osteoarthritis patients, based on the historic (2015-2018) claims data of a large Dutch health insurer. The factors were structured as predisposing, enabling or need factors according to the behavioral model of Andersen. RESULTS: The 15,309 TKA and 14,325 THA patients included in this study received an average of 20.7 (SD 11.3) and 16.7 (SD 10.1) post-discharge PT sessions, respectively. Results showed that the enabling factor 'presence of supplementary insurance' was the strongest predictor for post-discharge PT utilization in both groups (TKA: ß = 7.46, SE = 0.498, p-value< 0.001; THA: ß = 5.72, SE = 0.515, p-value< 0.001). There were also some statistically significant predisposing and need factors, but their effects were smaller. CONCLUSIONS: This study shows that if enabling factors (such as supplementary insurance coverage or co-payments) are not taken into account in risk-adjustment of the bundle price, they may cause historic claims-based pricing methods to over- or underestimate appropriate post-discharge primary care PT use, which would result in a bundle price that is either too high or too low. Not adjusting bundle prices for all relevant casemix factors is a risk because it can hamper the successful implementation of bundled payment contracts and the desired changes in care delivery it aims to support.

Unraveling the Complexity in the Design and Implementation of Bundled Payments: A Scoping Review of Key Elements From a Payer's Perspective.

Policy Points Because bundled payments are relatively new and require a different type of collaboration among payers, providers, and other actors, their design and implementation process is complex. By sorting the 53 key elements that contribute to this complexity into specific pre- and postcontractual phases as well as the actors involved in the health system, this framework provides a comprehensive overview of this complexity from a payer's perspective. Strategically, the design and implementation of bundled payments should not be approached by payers as merely the introduction of a new contracting model, but as part of a broader transformation into a more sustainable, value-based health care system. CONTEXT: Traditional fee-for-service (FFS) payment models in health care stimulate volume-driven care rather than value-driven care. To address this issue, increasing numbers of payers are adopting contracts based on bundled payments. Because their design and implementation are complex, understanding the elements that contribute to this complexity from a payer's perspective might facilitate their adoption. Consequently, the objective of our study was to identify and structure the key elements in the design and implementation of bundled payment contracts. METHODS: Two of us independently and systematically examined the literature to identify all the elements considered relevant to our objective. We then developed a framework in which these elements were arranged according to the specific phases of a care procurement process and actors' interactions at various levels of the health system. FINDINGS: The final study sample consisted of 147 articles in which we identified the 53 elements included in the framework. These elements were found in all phases of the pre- and postcontractual procurement process and involved actors at different levels of the health care system. Examples of elements that were cited frequently and are typical of bundled payment procurement, as opposed to FFS procurement, are (1) specification of care services, patients' characteristics, and corresponding costs, (2) small and heterogeneous patient populations, (3) allocation of payment and savings/losses among providers, (4) identification of patients in the bundle, (5) alignment of the existing care delivery model with the new payment model, and (6) limited effects on quality and costs in the first pilots and demonstrations. CONCLUSIONS: Compared with traditional FFS payment models, bundled payment contracts tend to introduce an alternative set of (financial) incentives, touch on almost all aspects of governance within organizations, and demand a different type of collaboration among organizations. Accordingly, payers should not strategically approach their design and implementation as merely the adoption of a new contracting model, but rather as part of a broader transformation toward a more sustainable value-based health care system, based less on short-term transactional negotiations and more on long-term collaborative relationships between payers and providers.

Good, better, best? A comprehensive comparison of healthcare providers' performance: An application to physiotherapy practices in primary care.

Most payment methods in healthcare stimulate volume-driven care, rather than value-driven care. Value-based payment methods such as Pay-For-Performance have the potential to reduce costs and improve quality of care. Ideally, outcome indicators are used in the assessment of providers' performance. The aim of this paper is to describe the feasibility of assessing and comparing the performances of providers using a comprehensive set of quality and cost data. We had access to unique and extensive datasets containing individual data on PROMs, PREMs and costs of physiotherapy practices in Dutch primary care. We merged these datasets at the patient-level and compared the performances of these practices using case-mix corrected linear regression models. Several significant differences in performance were detected between practices. These results can be used by both physiotherapists, to improve treatment given, and insurers to support their purchasing decisions. The study demonstrates that it is feasible to compare the performance of providers using PROMs and PREMs. However, it would take an extra effort to increase usefulness and it remains unclear under which conditions this effort is cost-effective. Healthcare providers need to be aware of the added value of registering outcomes to improve their quality. Insurers need to facilitate this by designing value-based contracts with the right incentives. Only then can payment methods contribute to value-based healthcare and increase value for patients.