Bundled payments in orthopaedics.

H ealthcare spending currently accounts for approximately 18% of the Gross Domestic Product in the United States, up from 13% in 2000. Hospital reimbursement for total joint replacement (Diagnosis Related Group 470) represented the largest Diagnosis Related Group payment by the Centers for Medicare & Medicaid Services (CMS) to hospitals in 2008, accounting for 4.6% of payments [1]. In light of the billions of dollars CMS pays each year for joint replacement surgery, and the volume of procedures performed, CMS has begun to study different payment models to better control costs and incentivize higher quality care delivery. The current fee-for-service payment model has been scrutinized because it incentivizes increased utilization of services, and costs to the healthcare system, while providing few incentives to improve quality or reduce cost. Modification in the packaging of and payment for care into bundles has been identified as a possible strategy to align the incentives of healthcare stakeholders around value instead of volume. Four models of bundling payments are being tested by CMS under the Bundled Payments for Care Improvement initiative, as authorized by the Patient Protection and Affordable Care Act [3]. The objective of bundled payments is to align stakeholders’ incentives to improve overall quality of care, minimize cost by making hospitals and physicians financially accountable for postdischarge care, and allow gainsharing between hospitals and physicians across services. Gainsharing refers to an arrangement between a physician or group of physicians and a hospital to share in the cost savings resulting from specific actions taken by providers to improve the efficiency of care delivery without compromising overall quality of care. Examples of specific actions include decreasing costs associated with implants and other supplies, reducing length of hospital stay, avoiding unplanned readmissions, and reducing utilization of postacute care services. The Acute Care Episode (ACE) Project [4], a 3-year venture undertaken by CMS between 2009 and 2011, bundled payments for both THA and TKA procedures at three hospitals in the United States. The objective of the project was to reduce costs and create an operational framework where any savings that were achieved could be shared between patients, doctors, A Note from the Editor-in-Chief: We are pleased to present to readers of Clinical Orthopaedics and Related Research the latest Orthopaedic Healthcare Worldwide column. This section explores the political, social, and economic issues associated with delivering musculoskeletal care in the many environments in which our specialty is practiced, both in the United States and around the world. We welcome reader feedback on all of our columns and articles; please send your comments to [email protected]. Each author certifies that he or any member of his immediate family, has no commercial associations (eg, consultancies, stock ownership, equity interest, patent/licensing arrangements, etc) that might pose a conflict of interest in connection with the submitted article. All ICMJE Conflict of Interest Forms for authors and Clinical Orthopaedics and Related Research editors and board members are on file with the publication and can be viewed on request. The opinions expressed are those of the writers, and do not reflect the opinion or policy of CORR or the Association of Bone and Joint Surgeons.