2018 John Charnley Award: Analysis of US Hip Replacement Bundled Payments: Physician-initiated Episodes Outperform Hospital-initiated Episodes.

BACKGROUND: The Centers for Medicare & Medicaid Services (CMS) launched the Bundled Payment for Care Improvement (BPCI) initiative in 2013 to create incentives to improve outcomes and reduce costs in various clinical settings, including total hip arthroplasty (THA). This study seeks to quantify BPCI initiative outcomes for THA and to determine the optimal party (for example, hospital versus physician group practice [PGP]) to manage the program. QUESTIONS/PURPOSES: (1) Is BPCI associated with lower 90-day payments, readmissions, or mortality for elective THA? (2) Is there a difference in 90-day payments, readmissions, or mortality between episodes initiated by PGPs and episodes initiated by hospitals for elective THA? (3) Is BPCI associated with reduced total Elixhauser comorbidity index or age for elective THA? METHODS: We performed a retrospective analysis on the CMS Limited Data Set on all Medicare primary elective THAs without a major comorbidity performed in the United States (except Maryland) between January 2013 and March 2016, totaling more than USD 7.1 billion in expenditures. Episodes were grouped into hospital-run BPCI (n = 42,922), PGP-run BPCI (n = 44,662), and THA performed outside of BPCI (n = 284,002). All Medicare Part A payments were calculated over a 90-day period after surgery and adjusted for inflation and regional variation. For each episode, age, sex, race, geographic location, background trend, and Elixhauser comorbidities were determined to control for major confounding variables. Total payments, readmissions, and mortality were compared among the groups with logistic regression. RESULTS: When controlling for demographics, background trend, geographic variation, and total Elixhauser comorbidities in elective Diagnosis-Related Group 470 THA episodes, BPCI was associated with a 4.44% (95% confidence interval [CI], -4.58% to -4.30%; p < 0.001) payment decrease for all participants (USD 1244 decrease from a baseline of USD 18,802); additionally, odds ratios (ORs) for 90-day mortality and readmissions were unchanged. PGP groups showed a 4.81% decrease in payments (95% CI, -5.01% to -4.61%; p < 0.001) after enrolling in BPCI (USD 1335 decrease from a baseline of USD 17,841). Hospital groups showed a 4.04% decrease in payments (95% CI, -4.24% to 3.84%; p < 0.01) after enrolling in BPCI (USD 1138 decrease from a baseline of USD 19,799). The decrease in payments of PGP-run episodes was greater compared with hospital-run episodes. ORs for 90-day mortality and readmission remained unchanged after BPCI for PGP- and hospital-run BPCI programs. Patient age and mean Elixhauser comorbidity index did not change after BPCI for PGP-run, hospital-run, or overall BPCI episodes. CONCLUSIONS: Even when controlling for decreasing costs in traditional fee-for-service care, BPCI is associated with payment reduction with no change in adverse events, and this is not because of the selection of younger patients or those with fewer comorbidities. Furthermore, physician group practices were associated with greater payment reduction than hospital programs with no difference in readmission or mortality from baseline for either. Physicians may be a more logical group than hospitals to manage payment reduction in future healthcare reform. LEVEL OF EVIDENCE: Level II, economic and decision analysis.

Critical Lessons From High-Value Oncology Practices.

IMPORTANCE: Cancer care is expensive. Cancer care provided by practice organizations varies in total spending incurred by patients and payers during treatment episodes and in quality of care, and this unnecessary variation contributes to the high cost. OBJECTIVE: To use the variation in total spending and quality of care to assess oncology practice attributes distinguishing "high value" that may be tested and adopted by others to produce similar results. DESIGN, SETTING, AND PARTICIPANTS: "Positive deviance" was used in this exploratory mixed-methods (quantitative and qualitative) analysis of interview results. To quantify value, oncology practices located near the US Pacific Northwest and Midwest with low mean insurer-allowed spending were identified. Among those, practices with high quality were selected. A team then conducted site visits to interview practice personnel from June 2, 2015, through October 3, 2015, and to probe for attributes of high-value care. A qualitative analysis of their interview results was performed, and a panel of experienced oncologists was convened to review attributes occurring uniquely or frequently in low-spending practices for their contribution to value improvement and ease of implementation. Four positive deviant (ie, low-spending) oncology practices and 3 oncology practices that ranked near the middle of the spending distribution were studied. MAIN OUTCOMES AND MEASURES: Thematic saturation in a qualitative analysis of high-value care attributes. RESULTS: From the 7 oncology practices studied, 13 attributes within the following 5 themes emerged: treatment planning and goal setting, services supporting the patient journey, technical support and physical layout, care team organization and function, and external context. Five attributes (ie, conservative use of imaging, early discussion of treatment limitations and consequences, single point of contact, maximal use of registered nurses for interventions, and a multicomponent health care system) most sharply distinguished the high-value practice sites. The expert oncologist panel judged 3 attributes (ie, early and normalized palliative care, ambulatory rapid response, and early discussion of treatment limitations and consequences) to carry the highest immediate potential for lowering spending without compromising the quality of care. CONCLUSIONS AND RELEVANCE: Oncology practice attributes warranting further testing were identified that may lower total spending for high-quality oncology care.

Profit efficiency of physician practices: a stochastic frontier approach using panel data.

While determinants of efficiency have been the subject of a large number of studies in the inpatient sector, relatively little is known about factors influencing efficiency of physician practices in the outpatient sector. With our study, we provide the first paper to estimate physician practice profit efficiency and its' determinants. We base our analysis on a unique panel data set of 4964 physician practices for the years 2008 to 2010. The data contains information on practice costs and revenues, services provided, as well as physician and practice characteristics. We specify the profit function of the physician practice as a translog functional form. We estimated the stochastic frontier using the comprehensive one-step approach for panel data of Battese and Coelli (1995). For estimation of the profit function, we regressed yearly profit on several inputs, outputs and input/output price relationships, while we controlled for a range of control variables such as patients' case-mix or share of patients covered by statutory health insurance. We find that participation in disease management programs and the degree of physician practice specialization are associated with significantly higher profit efficiency. In addition, our analyses show that group practices perform significantly better than single practices.

Insights of private general practitioners in group practice on the introduction of National Health Insurance in South Africa.

BACKGROUND: The South African government intends to contract with 'accredited provider groups' for capitated primary care under National Health Insurance (NHI). South African solo general practitioners (GPs) are unhappy with group practice. There is no clarity on the views of GPs in group practice on contracting to the NHI. OBJECTIVES: To describe the demographic and practice profile of GPs in group practice in South Africa, and evaluate their views on NHI, compared to solo GPs. METHODS: This was a descriptive survey. The population of 8721 private GPs in South Africa with emails available were emailed an online questionnaire. Descriptive statistical analyses and thematic content analysis were conducted. RESULTS: In all, 819 GPs responded (568 solo GPs and 251 GPs in groups). The results are focused on group GPs. GPs in groups have a different demographic practice profile compared to solo GPs. GPs in groups expected R4.86 million ($0.41 million) for a hypothetical NHI proposal of comprehensive primary healthcare (excluding medicines and investigations) to a practice population of 10 000 people. GPs planned a clinical team of 8 to 12 (including nurses) and 4 to 6 administrative staff. GPs in group practices saw three major risks: patient, organisational and government, with three related risk management strategies. CONCLUSIONS: GPs can competitively contract with NHI, although there are concerns. NHI contracting should not be limited to groups. All GPs embraced strong teamwork, including using nurses more effectively. This aligns well with the emergence of family medicine in Africa.

The relationships of physician practice characteristics to quality of care and costs.

BACKGROUND: Medical group practices are central to many of the proposals for health care reform, but little is known about the relationship between practice-level characteristics and the quality and cost of care. METHODS: Practice characteristics from a 2009 national survey of 211 group practices were linked to Medicare claims data for beneficiaries attributed to the practices. Multivariate regression was used to examine the relationship between practice characteristics and claims-computable measures of screening and monitoring, avoidable utilization, risk-adjusted per-beneficiary per-year (PBPY) costs, and the practice's net revenue. RESULTS: Several characteristics of group practices are predictive of screening and monitoring measures. Those measures, in turn, are predictive of lower values of avoidable utilization measures that contribute to higher PBPY costs. The effects of group practice characteristics on avoidable utilization, cost, and practice net revenue appear to work primarily through improved screening and monitoring. CONCLUSIONS: Practice characteristics influence costs indirectly through a set of statistically significant relationships among screening and monitoring measures and avoidable utilization. However, these relationships are not the only pathways connecting practice characteristics to cost and those additional pathways contain substantial "noise" adding uncertainty to the estimated direct effects. Some of the attributes thought to be important characteristics of accountable care organizations and medical homes appear to be associated with lower quality and no improvement in cost.

Financial impact of third-party reimbursement changes for CPT Code 29826: experience of a large group practice.

BACKGROUND: On January 1, 2012, the Centers for Medicare & Medicaid Services converted Current Procedural Terminology (CPT) code 29826 (arthroscopic acromioplasty) from a stand-alone code to an add-on code and reduced the relative value units from 19.58 to 5.24. The goal of this study was to quantify the financial impact of this change on a large single-specialty orthopaedic surgery practice. METHODS: Custom software was used to query the database that harbors billing data for a large single-specialty orthopaedic group. Data were independently generated based on patient identification data and insurance class, and compared between 2011 and 2012. Codes 29826, 29827 (shoulder arthroscopy, rotator cuff repair), 29822 (shoulder arthroscopy, debridement, limited), 29823 (shoulder arthroscopy, debridement, extensive), and 29824 (shoulder arthroscopy, distal claviculectomy) were all searched independently for each year and cross-referenced with each other and all other shoulder codes. Modifier codes for surgical assistants were analyzed separately and subsequently combined with primary surgeon data for financial analysis. This included assessment of surgeon reimbursement per occurrence of code 29826 and surgeon reimbursement by Medicare compared with non-Medicare payers. RESULTS: Code 29826 was used 1536 times in 2011 and 1410 times in 2012 (-2.59% after correcting for all shoulder arthroscopy cases per year). Code 29822 was used significantly more in 2012 both alone (1.45%, p = 0.001) and in total (2.45%), but the use of 29823 did not change (p = 0.17). A combination of three of the five selected codes was used significantly less in 2012 (p < 0.001), while the use of any combination of four codes was used significantly more in 2012 (p < 0.001). Assistant use did not appreciably change between years. Average reimbursement for code 29826 by all payers in 2011 was $456.84 and $441.64 in 2012. Average payment by Medicare was $268.58 in 2011 and $171.02 in 2012 (-36.3%). Medicare paid 54.3% of other payers per case in 2011 and 33.1% of other payers in 2012. CONCLUSIONS: Reimbursement for code 29826 by non-Medicare payers did not decrease dramatically between 2011 and 2012. However, Medicare reimbursement fell substantially.

Developing academic surgery in a socialized health care system: a 35-year experience.

The most important benefit of a socialized health care system is the elimination of the threat of personal financial ruin to pay for medical care. Serious disadvantages of a socialized health care system, particularly in a university hospital setting, include restricted financial resources for education and patient care, limited working facilities, and loss of physician-directed decision making in planning and prioritizing. This article describes how a group practice model has supported clinical and academic activities within the faculty of medicine of our university and offers this model as a possible template for other surgical and medical disciplines working in an academic socialized environment.

Establishing a multidisciplinary academic cosmetic center.

The demand for cosmetic services has risen rapidly in recent years, but has slowed down with the current economic downturn. Managed care organizations and Medicare have been steadily reducing their reimbursements for physician services. The payment for reconstructive surgical procedures has been decreasing and is likely to worsen with healthcare reform, and many plastic surgery residency programs are facing fiscal challenges. An adequate volume of patients needing cosmetic services is necessary to recruit and train the best candidates to the residency programs. Self-pay patients will help ensure the fiscal viability of plastic surgery residency programs. Attracting patients to an academic healthcare center will become more difficult in a recession without the appropriate facilities, programs, and pricing strategies. Setting up a modern cosmetic services program at an academic center has some unique challenges, including funding, academic politics, and turf. The authors opened a free-standing academic multidisciplinary center at their medical school 3 years ago. The center is an off-site, 13,000-sq ft facility that includes faculty from plastic surgery, ear, nose, and throat, dermatology, and vascular surgery. In this article, the authors discuss the process of developing and executing a plan for starting an aesthetic services center in an academic setting. The financing of the center and factors in pricing services are discussed. The authors show the impact of the center on their cosmetic surgery patient volumes, resident education, and finances. They expect that their experience will be helpful to other plastic surgery programs at academic medical centers.

Development of an activity-based costing model to evaluate physician office practice profitability.

OBJECTIVE: Newer treatment regimens for age-related macular degeneration have significantly affected traditional and non-traditional retinal services across all types of practice settings around the country as they seek to find a balance among delivering best patient care, keeping operating costs under control, and maintaining profitability. DESIGN: A systematic retrospective review of a multi-city, multi-physician retinal practice's accounting system to obtain data on revenues, expenses, and profit. Data reviewed were from practice management systems to obtain claims level data on clinical procedures across 7 primary activity centers: non-laser surgery, laser surgery, office visits, optical coherence tomography (OCT), non-OCT diagnostics, drugs and drug injections, and research. PARTICIPANTS: All treated patients from a retina practice from January 1, 2005, to December 31, 2007. METHODS: Retrospective claims data review from a multi-physician retina practice detailing Current Procedural Terminology and Healthcare Common Procedure Coding System procedures performed and billed, submitted charges, allowed charges, and net collections. Analyses were performed by an outside firm and verified by a risk advisory firm. MAIN OUTCOME MEASURES: Identifying practice efficiencies/inefficiencies as they relate to patient care. RESULTS: An elaborate analysis using activity-based costing (ABC) showed that increased office visits and OCT and non-OCT diagnostics had a significant negative impact on the practice's profit margins, whereas surgical procedures contributed to the majority of the practice's profit margins because of the lower operating costs associated with surgery. CONCLUSIONS: The practice was able to accommodate the demand in patient volume, medical retina services, and medical imaging with the advent of anti-vascular endothelial growth factor therapy and realized a seismic shift in operating costs. The practice attempted to deliver state-of-the-art patient care in a cost-effective manner, yet underwent a significant decline in its financial health.

Impact of the economic downturn on adult reconstruction surgery: a survey of the American Association of Hip and Knee Surgeons.

To evaluate the effects of the economic downturn on adult reconstruction surgery in the United States, a survey of the American Association of Hip and Knee Surgeons (AAHKS) membership was conducted. The survey evaluated surgical and patient volume, practice type, hospital relationship, total joint arthroplasty cost control, employee staffing, potential impact of Medicare reimbursement decreases, attitudes toward health care reform options and retirement planning. A surgical volume decrease was reported by 30.4%. An outpatient visit decrease was reported by 29.3%. A mean loss of 29.9% of retirement savings was reported. The planned retirement age increased to 65.3 years from 64.05 years. If Medicare surgeon reimbursement were to decrease up to 20%, 49% to 57% of AAHKS surgeons would be unable to provide care for Medicare patients, resulting in an unmet need of 92,650 to 160,818 total joint arthroplasty procedures among AAHKS surgeons alone. Decreases in funding for surgeons and inadequate support for subspecialty training will likely impact access and quality for Americans seeking adult reconstruction surgery.