Pennsylvania Employees Benefit Trust Fund Bundled Payment Pilot Improves Patient Outcomes, Significantly Decreases Professional Services Costs

Pennsylvania Employees Benefit Trust Fund Bundled Payment Pilot Improves Patient Outcomes, Significantly Decreases Professional Services Costs

NEWTOWN, CT and HARRISBURG, PA – August 30, 2016 – In addition to cost savings, dramatic care process improvements and positive patient care evaluations were key results of a bundled payment pilot conducted by the Pennsylvania Employees Benefit Trust Fund (PEBTF), an insurer for 74,000 Pennsylvania public employees and 64,000 retirees. The yearlong bundled payment model study was conducted in 2015 and focused on total knee replacements and total hip replacements, with 69 patients participating.

A case study on the findings was made available today by the nonprofit Health Care Incentives Improvement Institute (HCI3).

PEBTF worked with HCI3 to design and implement the precise elements of the program, including the use of HCI3’s PROMETHEUS Analytics program to create episode budgets and evaluate quality data. The Orthopedic Institute of Pennsylvania (OIP), of Harrisburg, Pa., led the clinical engagement with patients.

Outpatient costs went down an average of $4,189, but the structure of the facility’s reimbursement rate, negotiated with third-party administrators, meant inpatient costs did not drop, even when care improved and shortened hospital stays. These inpatient stays were reimbursed per case, regardless of the length of the hospital stay.

“If facility payments don’t go down when hospital stays are shortened, they reduce the opportunity to capture savings that result from better quality care, better patient engagement and more efficient processes,” said François de Brantes, HCI3 executive director. “One of the lessons learned from this pilot is that facilities and surgeons should have distinct budgets and two-sided risk arrangements. That way quality and cost improvements stemming from one cannot obliterate the lack of improvement from the other.”

With the results in from the knee and hip replacement pilot, PEBTF is evaluating other episodes of care: that may be appropriate for bundled payment such as lower back pain and cardiac procedures.