Bundled payments in spine surgery

Abstract

Interest in the application of bundled payments to the field of spine surgery continues to grow. There may be great potential for cost-savings for spinal procedures under bundled payments. However, challenges such as heterogeneity of DRGs, complex procedures requiring lengthy recoveries, and appropriate outcomes measurement pose barriers to successful bundled payment design. In this paper, we review the challenges and opportunities posed by bundled payments in spine surgery. We also present several key considerations for policymakers interested in payment reform within spine surgery. Surgeon involvement will be critical in providing guidance for generating effective alternative payment models.

Introduction

Spine surgeries are associated with an increasing economic burden as expenditures have only continued to rise in the last few decades.1, 2 The projected demand for spine surgery is likely to continue rising, if historic growth rates are any indication.3, 4, 5, 6 Policymakers seek to address the growing economic burden through alternative payment models, such as bundled payments. By bundling compensation, payers provide a pre-determined level of compensation for all services related to an episode of care (from pre-operative through post-operative care). Policymakers hope that by bundling these payments over an episode of care, providers will be incentivized to decrease the overall cost of care while maintaining or even improving healthcare quality. As an alternative to the current fee-for-service model, these reforms effectively shift the financial risk of care on to hospitals and providers. Indeed, previous reports are optimistic regarding the opportunity for bundled payments to significantly reduce costs incurred by the Centers for Medicare and Medicaid Services (CMS) and other third party payers.⁷

The rising interest in bundled payments for spine surgery follows promising leads of bundled payments in total joint arthroplasty (TJA). Like spine surgery, TJA presented a prime opportunity for cost reduction, with over 450,000 Medicare patients undergoing these procedures and over $7 billion in expenditures for hospitalizations.⁸ Preliminary results of a Bundled Payments for Care Improvement (BPCI) program for TJA display an over 95% patient satisfaction rate as well as a 22% decrease in medical costs as compared to fee-for-service payments, without a negative impact on patient outcomes. However, spine surgery differs from TJA in several significant ways. First, patients can be more medically complex with many associated comorbidities. Next, numerous diagnosis related groups (DRGs) which include a variety of diagnoses and fusion levels, as well as the multitude of surgical procedures and options for a particular diagnosis, makes the use of this model particularly challenging. Therefore, the aim of this article is to review the challenges and opportunities presented by bundled payments for spine surgery, and offer some key questions that need to be addressed in seeking to design a successful bundled payment for spine surgery.