Below are some of the details
and insights we uncovered in our
The history: In 1983 Medicare
said they were not going to pay
per item, but by diagnosis. They
came up with 500+ diagnoses,
and applied a fixed reimbursement amount to each. This forced
hospitals to bundle charges so that
they could make a profit. In the
90s Medicare started paying a set
amount for surgical fees, a global
fee for all the care associated with
a procedure. Each episode of care
was incorporated in a single figure.
This took the risk away from Medicare and shifted it to the provider.
The other major change was the
definition of an episode of care.
Now it’s not just a single period in
a hospital, but begins with admission and extends into discharge
and rehab, up to 90 days—the
whole continuum of care. Now
outpatient care is bundled as well.
This forces providers to coordinate
care within these bundles, while
also maintaining quality of care.
CCJR: We asked Dr. Mazanec for
insights into the Comprehensive
Care for Joint Replacement (CCJR)
program and the potential ramifications for medical device companies. This act covers knee and hip
replacement surgery. All the care,
from admission up to 90 days—the
surgeon, hospital, physical therapy,
home care, rehab—is bundled together, and a targeted price is set,
based on historical data. So if the
hospital comes in under the target,
they get the additional money. If
not, they have to give money back.
This controls costs and drives better coordination of care. Reducing
readmissions becomes important,
because that’s an expensive event.
The health organization has to
make sure complications are addressed. This addresses the post-acute phase of care, where much
of the cost inflation happens, up
to 40 - 50% (sometimes called the
“area of uncoordinated care”). Hip
replacement may need some home
care, but rehab is more costly for
knee replacement. Also, previously
six different orthopedic surgeons
may have preferred six different
kinds of hardware at varying costs.
Now hospitals are negotiating
harder, using brand A rather than
brands A, B, C and D.
You may have PTs who don’t work
at the hospital, you may have a
rehab facility that isn’t part of the
hospital system. This is where the
information highway becomes im-
portant, with the post-acute people
needing to maintain contact with
the surgeon. The new parameters
will hold together the various com-
ponents. You have to have all the
providers in the loop, so you can
track and record data, and provide
clinical decision support within
the hospital and afterwards. This
will keep down complications, like
blood clot events.
And the EMR has to be able to
guide the post-acute phase, rehab
and home care, in maintaining
continuity of care, so co-morbid-ities like hypertension have to be
managed to avoid visits to the ER
and/or potential re-hospitalization.
The EMR has to have a user-friendly interface that engages the
clinicians to collaborate and cooperate. There’s likely to be a significant role for telemedicine in the
post-acute phase, to provide better
care and to save money. For instance, when people get discharged
after a heart attack, a myocardial
infarction, this can have a significant effect in terms of reduced
hospitalization, reduced ER visits,
which could be an almost million-dollar savings according to one
study, based solely on telemedicine
CCJR is going to drive better com-
*A sampling from Redefining Healthcare