Medicare Bundled-Payments Model Cut Joint Replacement Costs By More than 20%

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PHILADELPHIA - Bundled payment models can push Medicare and health system costs down considerably without sacrificing quality of care, according to new research from the Perelman School of Medicine at the University of Pennsylvania. The study, the first to combine hospital cost and Medicare claims data to identify drivers of joint replacement cost savings – evaluated costs and care quality at for hip and knee replacements performed from 2008-2015 at the five-hospital Baptist Health System (BHS) network in San Antonio, Texas. Results, published online in JAMA Internal Medicine, show that the average cost dropped 20.8 percent while the effect on quality of care was unchanged or improved.

“This study outlines how one bundling participant achieved hospital and post-hospital discharge savings while reducing Medicare payments – all without compromising quality,” said lead author Amol S. Navathe, MD, PhD, an assistant professor in the department of Medical Ethics and Health Policy at the Perelman School of Medicine at the University of Pennsylvania, and a member of Penn’s Center for Health Incentives and Behavioral Economics. “The results offer guidance for both providers and a new administration considering decisions that will impact the health of patients and communities nationwide. Policymakers should take note of the fact the results suggest hospitals may directly benefit in bundled payment models.”