Spending and quality after three years of Medicare's bundled payments for medical conditions: quasi-experimental difference-in-differences study

Abstract

Objective: To evaluate whether longer term participation in the bundled payments for care initiative (BPCI) for medical conditions in the United States, which held hospitals financially accountable for all spending during an episode of care from hospital admission to 90 days after discharge, was associated with changes in spending, mortality, or health service use.

Design: Quasi-experimental difference-in-differences analysis.

Setting: US hospitals participating in bundled payments for acute myocardial infarction, congestive heart failure, chronic obstructive pulmonary disease (COPD), or pneumonia, and propensity score matched to non-participating hospitals.

Participants: 238 hospitals participating in the Bundled Payments for Care Improvement initiative (BPCI) and 1415 non-BPCI hospitals. 226 BPCI hospitals were matched to 700 non-BPCI hospitals.

Main outcome measures: Primary outcomes were total spending on episodes and death 90 days after discharge. Secondary outcomes included spending and use by type of post-acute care. BPCI and non-BPCI hospitals were compared by patient, hospital, and hospital market characteristics. Market characteristics included population size, competitiveness, and post-acute bed supply.

Results: In the 226 BPCI hospitals, episodes of care totaled 261 163 in the baseline period and 93 562 in the treatment period compared with 211 208 and 78 643 in the 700 matched non-BPCI hospitals, respectively, with small differences in hospital and market characteristics after matching. Differing trends were seen for some patient characteristics (eg, mean age change -0.3 years at BPCI hospitals v non- BPCI hospitals, P<0.001). In the adjusted analysis, participation in BPCI was associated with a decrease in total episode spending (-1.2%, 95% confidence interval -2.3% to -0.2%). Spending on care at skilled nursing facilities decreased (-6.3%, -10.0% to -2.5%) owing to a reduced number of facility days (-6.2%, -9.8% to -2.6%), and home health spending increased (4.4%, 1.4% to 7.5%). Mortality at 90 days did not change (-0.1 percentage points, 95% confidence interval -0.5 to 0.2 percentage points).

Conclusions: In this longer term evaluation of a large national programme on medical bundled payments in the US, participation in bundles for four common medical conditions was associated with savings at three years. The savings were generated by practice changes that decreased use of high intensity care after hospital discharge without affecting quality, which also suggests that bundles for medical conditions could require multiple years before changes in savings and practice emerge.

Fig 1

Risk adjusted changes in spending associated with hospital participation in bundled payments for care improvement for four medical conditions, 2011-16. The associations between participation in the bundled payments for care improvement initiative (BPCI) and changes in spending were estimated with separate difference-in-differences models, using a hospital condition specific indicator of entry to the BPCI programme, patient and time varying market characteristics, and quarterly time and hospital fixed effects. All models were generalized linear models with a log-link function and gamma distribution. Low volume hospitals with fewer than 10 episodes for each condition were treated as a single hospital to enable clustered models to converge for the skilled nursing facility care and outpatient professional fees outcomes. BPCI hospital participation was associated with a decrease in all institutional post-acute care spending and skilled nursing facility care spending specifically, as well as outpatient professional fees, combined with increases in spending for home health services

Fig 2

Risk adjusted changes in mortality and use associated with hospital participation in bundled payments for care improvement for four medical conditions, 2011-16. The associations between participation in the bundled payments for care improvement initiative (BPCI) and changes in mortality and use were estimated with separate difference-in-differences models, using a hospital condition specific indicator of entry to the BPCI programme, patient and time varying market characteristics, and quarterly time and hospital fixed effects. All models were ordinary least squares except for total number of days for skilled nursing facility care we used a generalized linear model with log-link function and negative binomial distribution. BPCI hospital participation was not associated with a change in the primary outcome of 90 day mortality. BPCI hospital participation was associated with a differential decrease in total days for skilled nursing facility care. *Reported estimate is a percent (not percentage point) difference