The Institute for Health Improvement calls for key players in the health care industry to reach the “triple aim,” whereby providers work together to enhance patient satisfaction, improve population health, and lower per-capita health care costs.

The North Carolina Medical Journal recently featured an article written by Richard Bruch, MD, on how commercial insurers and the government are attempting to execute the triple aim by changing the way doctors are paid. Payment is slowly shifting towards value, or health outcomes, rather than fee-for-service. The idea of value-driven payment is to promote quality care while reducing unnecessary health care expenditures.

Bundled payments and Accountable Care Organization (ACO) risk-sharing are two examples:

  • Bundled payments – A lump sum payment that is divvied up among all providers responsible for a patient’s entire episode of care. (i.e pre-op and post-op care).
  • ACOs – The Medicare Shared Savings Program (MSSP) pushes for groups of physicians and hospitals to not only care for a defined patient population within a target spend, but also to take on partial risk if the cost of their patient population exceeds its budget. If a hospital comes in under the target spend, it shares savings with Medicare. If patient costs runs over budget, that hospital is responsible for financial losses. Reimbursement is also contingent upon metrics that are supposed to be tied to improving patient health.

For EmergeOrtho (formerly Triangle Orthopaedic Associates, the state’s largest private orthopedic practice), value-driven payment models seem to be working:

 In 2012, Triangle Orthopaedic Associates, P.A. (TOA) entered into a contract with Blue Cross and Blue Shield of North Carolina (BCBSNC) to provide total knee replacements for BCBSNC’s adult commercial patient population under a prospective bundled payment program. Soon after surgery, the bundled payment is made to TOA. TOA then pays the hospital for inpatient medical and surgical care, pays the anesthesiology expenses, and is responsible for all postoperative care expenses for the contracted number of months. In this program, a TOA care coordinator guides patients through the surgical and recovery process, and outpatient physical therapy visits do not require separate patient copayments. After 1 year, BCBSNC reported 97% patient satisfaction and 22% lower medical costs compared to the marketplace [1]. Throughout the entire episode of care, a patient receives only 1 bill, and patients greatly appreciate the increased attention to their needs. 

Given this success, the BCBSNC prospective bundled payment program with TOA has been expanded to include total hip replacements.  

For more insight, read the full article here.