May 14, 2018

Why UnitedHealthcare's bundled payment program is expanding to nearly 40 markets

Daily Briefing

    UnitedHealthcare last week announced that it will expand its bundled payment program for spinal surgeries and knee and hip replacements to 37 markets, citing improved patient outcomes and nearly $18 million in employer savings in its current markets.

    Upgrade your joint replacement pathway for CJR

    According to Forbes, the news that UnitedHealthcare is seeing positive results through bundled payment models is "significant" given the federal government's slow transition to value-based payment models in Medicare. (Daily Briefing is published by Advisory Board, a division of Optum, which is a wholly owned subsidiary of UnitedHealth Group. UnitedHealth Group separately owns UnitedHealthcare.)

    About the program

    UnitedHealthcare launched its spine and joint solution program in 2016 in 28 markets. Under UnitedHealthcare's program, participating medical providers involved in the "defined episode of care," such as a hip replacement, receive a single payment instead of a traditional fee-for-service reimbursement that pays each provider, treatment, or diagnostic test individually. Under the bundled payment program, hospitals and providers are held accountable for the quality and cost of the entire care episode, from the surgery through outpatient rehabilitation or related care.

    Patients also received incentives for selecting a "participating facility rather than another in-network medical facility, … such as cash, gift cards, and additional vacation days for recovery," according to UnitedHealthcare.

    Program savings, expansion

    So far, UnitedHealthcare said the program has generated nearly $18 million in savings for the more than 115 participating employers. Specifically, the program has saved an average of $18,000 per operation when compared with median costs within the same city, which has led to more than $3,000 in out-of-pocket savings for patients.

    The program has also contributed to a 22% reduction in hospital readmissions, as well as a 17% reduction in complications for patients having joint replacement surgeries, Becker's Hospital Review reports.

    Based on those results, UnitedHealthcare said this year it will expand its program to 46 facilities, up from 40 in 2016, and to 37 markets, up from 28.

    Sam Ho, UnitedHealthcare's CMO, said the spine and joint solution program "is one example of the ways we are reshaping how health care is delivered, helping enhance care coordination, improve outcomes and deliver greater value." He added that the program's initial results "demonstrate the value of this program to health care providers, employers and their employees, helping to improve health outcomes and make care more affordable for more people" (Japsen, Forbes, 5/9; Haefner, Becker's Hospital Review, 5/9; United Healthcare release, 5/9).

    Upgrade your joint replacement pathway for CJR

    The Comprehensive Care for Joint Replacement (CJR) model is CMS’s first mandatory bundled payment program. It holds hospitals accountable for managing outcomes across a 90-day episode of care for two common Medicare inpatient surgeries—hip and knee replacements.

    Consider these five strategies to reduce variation across the joint replacement care episode, and then access our Joint Replacement Pathway Toolkit to find implementation guidance and resources.

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