This blog appeared in Becker’s Hospital Review on February 1, 2019.
There are a lot of bundled payment programs, but the best known one is the Center for Medicare and Medicaid Services’ (CMS) Comprehensive Care Joint Replacement (CJR) program. It’s complex, but Medicare essentially sets a target for the total cost of a hip or knee replacement (including the physician, hospital, and rehabilitation fees), and pays a bonus if costs are kept down and quality measures are met. The hospital eats costs in excess of the target (Large physicians groups participate - take risk and reap rewards or penalties - through related mechanisms). A study of the CJR hip bundle found that the program reduced costs and improved quality compared to the traditional way of paying. Smart bundle administrators also discovered that by managing the amount of time patients spent in rehabilitation facilities after surgery, they could save thousands and improve outcomes. Other tweaks to the care pathway also helped.
Medicare doesn’t pay for pregnancy care, so an innovative Medicaid director would need to take the lead on creating an OB bundled payment. Fortunately, much of obstetrics is already paid as a bundle: physicians receive one payment that includes all prenatal and postpartum care as well as the delivery; hospitals receive one payment for the delivery and postpartum care. We’d want to add a few more things to the OB bundle: lab testing and genetic screening, ultrasounds, hospital visits and admissions during pregnancy, and all costs associated with the neonatal intensive care unit (NICU).
Including the NICU in the bundle is critical, for health and cost reasons: although many preterm deliveries are unavoidable, 10-30 percent of them can be avoided through the judicious use of risk-factor screening and progesterone supplementation, and the average preterm delivery costs $68,000. Even babies that are born at term, but before 39 weeks gestation, are more likely to end up in the NICU. Including NICU costs in the bundle creates an enormous incentive for physicians and the broader health system to invest in preventive prenatal care.
Assuming a sophisticated provider group or health system ‘owns’ the bundle, they have two levers to pull: eliminating excessive costs and reducing the use of unnecessary care that is part of current practice. There are small dollars to be saved by reducing low-value lab tests (particularly esoteric genetic testing) and excessive ultrasounds. Real money (and significant morbidity) can be saved by eliminating unnecessary cesareans. How about reducing postpartum length of stay by doing a better job preparing parents to parent and sending a nurse to their house for several hours the day after they go home? Another target could be avoiding soft-call (or unnecessary) inductions of labor that can take days of ‘cervical ripening’ because the patient isn’t ready to labor - resulting in expensive acute hospital days that cost thousands of dollars.
The real magic would come from innovation: group prenatal care, telehealth, use of midwives and lower-cost facilities like birth centers for appropriate patients -- all would drive better outcomes with less intervention, and ultimately, lower costs.
What quality metrics should the OB bundle consider? The first-time cesarean rate would make a great metric, and rewarding low c-section rates with real bonus dollars would be powerful. And let’s measure breastfeeding at six weeks -- not just breastfeeding initiation at discharge from the hospital.
Physicians (my colleagues) use the lens of risk avoidance to make decisions instead of deploying evidence-based practices that lead to better outcomes. It’s not good enough to claim success when an intervention didn’t result in harm; quality metrics are fundamentally measured after the fact. Furthermore, because obstetric and neonatal complications are (thankfully) rare, measurement requires inclusion of hundreds or thousands of patients to generate statistical significance. If two hospitals have the same obstetric outcomes, but one induced labor in 25 percent of their patients and the other induced 10 percent, there’s an opportunity to reduce unnecessary inductions of labor. The same approach applies to cesareans, ultrasound utilization, and hospitalization before delivery.
The CJR pilot proved that bundles improve outcomes and reduce costs in orthopedics. There’s an opportunity here to learn from that experience and make obstetrics both safer and less expensive.