Holding the line: Pilot program uses collaboration to reduce medical costs

By Amanda Schoenberg

A pilot program to change how doctors and hospitals bill Medicare has lowered costs and reduced readmission rates in the first year. 

In 2009, Lovelace Health System was chosen for the Acute Care Episode demonstration program, in which hospitals receive one “bundled” payment from the Centers for Medicare & Medicaid Services for in-patient orthopedic and cardiac procedures. Before the project, doctors and hospitals billed separately for Part A and Part B care. 

Lovelace was the only health system in New Mexico chosen to participate. Other sites are in Oklahoma, Colorado and Texas. 

As part of the program, doctors and administrators work closely to cut costs and improve quality. In the first year, readmission rates for certain orthopedic procedures dropped from 5 percent to zero and orthopedic implant costs dropped 10 percent. 

Medicare savings by the end of March were estimated at $268,000 for cardiac and orthopedic procedures. 

Through the program, fee-for-service Medicare patients treated at Lovelace receive incentive payments of up to $572 for orthopedic and $993 for cardiac procedures. Nine orthopedic and 28 cardiac surgeries are eligible. 

Patricia Moses, 69, a West Side resident who had her left knee replaced, chose Lovelace after Dr. Krishna Tripuraneni of New Mexico Orthopaedics Associates told her about the incentive payment. 

Moses spent three days in the hospital and two weeks in a rehab facility. Her experience at Lovelace was a positive one, she says. 

“I was actually walking my dog within three weeks,” she says. “I was very pleased with the care I had there.” 

She received about $200 a few months after the surgery. 

Moses was also “pleasantly surprised” she didn’t have to fill out “reams of paperwork” to participate. She plans to have her right knee replaced in July at Lovelace, and will then be eligible for another payment. 

The orthopedic pilot program started in November 2010. By the end of March, 252 surgeries were performed. 

Cardiac procedures started in November 2011 and included 206 surgeries by March. Both will end in October 2013. 

The pilot project “forced us into a collaborative effort,” says Dr. Richard E. White Jr., a consultant for orthopaedic program development and research director for the New Mexico Center for Joint Replacement Surgery. 

Before the project, each doctor decided how to care for patients without standard protocol, he says. The pilot project called for a more systematic approach relying on evidence-based medicine. 

Two common orthopedic problems are readmissions and infections, he says. They are best prevented with standardized care, such as when doctors use the same approach to avoid blood clots. 

Doctors who meet quality guidelines and help with efficiency and standardization are also eligible to earn bonuses. 

Doctors and administrators also got together to cut costs. For example, surgeons have a preference card listing every glove, suture and instrument they want for surgery. Once instruments are opened, they are discarded even if they are not used during surgery. 

When doctors and administrators did a systematic review, they realized many were never used. Savings found just from removing unneeded items were dramatic, White says. 

As part of the pilot, doctors also asked orthopedic implant companies to reduce the costs of their devices, he says. On the cardiac side, project goals included reducing infection and increasing efficiency, says Dr. Robert Federici, executive medical director of cardiology at Heart Hospital of New Mexico at Lovelace Medical Center. 

The process began by evaluating best practices, adding checklists, cutting unnecessary tests and standardizing equipment. 

Streamlining means staff members who plan discharges now get involved the day a patient is admitted. The goal is to “figure it out on day one or two instead of at the end,” Federici says. 

With the pilot project, doctors are included in discussions in a way they were not before, he says. 

The old way was, “‘I’m the doctor, I’ve been trained to make decisions relatively autonomously,’” he says. “The new paradigm of taking care of patients is ‘this is a team effort.’” 

Doctors like the chance to participate, Federici says. 

“We always think we’re the spokesperson for the patient,” he explains. 

Both White and Federici expect the model to take off. The current system for Medicare reimbursement is not working, they say. 

“This is the favorite for the next payment system for Medicare,” White says. “It almost assuredly will happen.” 

Although the pilot began with orthopedic and cardiac surgeries, Federici predicts similar approaches for other areas of medicine.

“This is definitely the direction medicine is going to go,” he says.

ACE article
Photo Courtesy of ABQ Journal
Patricia Moses, who has had her left knee replaced and will have her right knee replaced this summer, walks with her dog, Ciaran.

ACe article 2
Photo Courtesy of ABQ Journal
Dr. Robert Federici, executive medical director of cardiology at Heart Hospital of New Mexico at Lovelace Medical Center, performs surgery in the catherization lab.

White: Pilot project "forced us into a collaborative effort." 


ABQ Journal

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