South County, BCBSRI bundling pay for hip, knee replacement

South County Hospital, Blue Cross & Blue Shield of Rhode Island and South County Orthopedics have entered a bundled payment agreement for hip and knee replacements. More

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South County, BCBSRI bundling pay for hip, knee replacement

SOUTH COUNTY HOSPITAL has signed a bundled payment agreement with Blue Cross & Blue Shield of Rhode Island and South County Orthopedics to cover hip and knee replacements from initial diagnosis through completion of physical therapy.
Posted 2/14/14

SOUTH KINGSTOWN – South County Hospital, Blue Cross & Blue Shield of Rhode Island and South County Orthopedics have entered a bundled payment agreement for hip and knee replacements.

The move comes amid a flood of similar bundling arrangements around the country, as providers and insurance carriers seek to simultaneously control costs and improve outcomes.

Hip and knee replacement surgeries are a particularly common treatment area to be targeted for bundling according to health care experts, including the Robert Wood Johnson Foundation’s Dr. Michael Painter.

“Hip and knee replacement surgeries clearly appear to be the most common inpatient procedures actively subject to or planned for bundled payments,” Painter wrote in an article about bundling for the foundation.

According to a release from South County Hospital spokeswoman Jamie DelVecchio, the agreement covers a number of services associated with the joint replacement surgeries.

“South County Hospital and South County Orthopedics have agreed with BCBSRI on key quality metrics, clinical best practices and an overall cost for a full suite of services,” DelVecchio said in the release. “The model is designed to coordinate all aspects of a patient’s care, including surgery, radiology, hospital services, pharmacy and physical therapy.”

South County Hospital performed approximately 1,200 of the procedures in the most recent fiscal year. Of those procedures, roughly 450 were insured by Blue Cross. An average cost for the procedures was not available.

South County Hospital Chief Financial Officer Tom Breen said that the impetus for the agreement came from Blue Cross, in recognition of the hospital’s existing high level of care.

“It was initially Blue Cross that approached us with an idea,” Breen said in a phone interview. “We embraced the idea; we have a very good orthopedics program already, which we think is why Blue Cross approached us in the first place.”

Breen pointed out that caregivers in a joint replacement episode had largely worked in isolation in the past and that the lack of integration resulted in both higher costs and less successful outcomes.

“We’re now looking to what happens from the time patients present to their primary care physician,” Breen said, “and we will now follow them through to the end of outpatient physical therapy after a procedure is complete. Our incentive is to really begin to measure quality and utilization of services throughout that entire episode, so that we can find ways to improve quality. Oftentimes when you’re improving quality you’re also lowering cost.”

Breen added that all three parties to the agreement stand to share in savings generated if cost and quality metric goals were met or exceeded. The breakdown of the share savings was private, according to Breen.

South County Hospital President Lou Giancola emphasized that quality of care and optimal outcomes were foremost.

“South County Hospital and its clinicians see the value of treating our patients in a way that considers their entire care experience,” Giancola said in the release. “We are pleased that our quality is being recognized this way by Blue Cross & Blue Shield of Rhode Island, and to be at the forefront of participating in this innovative model of care that is based on patient outcome.”

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