In 2009, a bundled payment model was implemented for total hip and knee replacement on a health system level in Stockholm. In 2010, a joint study was set up in collaboration between the Stockholm County Council, Karolinska Institutet and the Institutet for Strategy and Competitiveness at Harvard Business School to study the effects of this model. The outcomes of this study will be submitted for publication during 2012, but we would like already now to share some of the preliminary findings on how the bundled payment changed the market dynamics and made providers start to compete on value.
Prior to 2009, THR and TKR were predominantly performed by acute care hospitals under global budgets and DRG-based reimbursement schemes. Payer follow-up was mainly focused on volume, waiting times and process measures. National quality registries showed that Stockholm providers delivered high quality care, but patients were suffering from long waiting times due to insufficient capacity.
To address the capacity limitations, to increase the multitude of providers, and to encourage providers to innovate and compete on value, the Stockholm County Council decided to implement a bundled payment system in 2009 called OrthoChoice.