In the Face of ACA Repeal, Cost and Quality Pressures Will Remain Constant

In one of the most stunning political upsets in a generation, Donald Trump was elected to the Presidency. One of Trump’s favorite targets on the campaign trail was Obamacare (the Affordable Care Act [ACA]), which he promised to repeal. Although his rhetoric has softened somewhat after the election, opening the door for portions of the ACA to remain in place, Trump’s win combined with Republican control of both the House and Senate likely mean a number of significant changes in the months and years to come. Healthcare executives across the country are in a difficult position as they attempt to plan for the changes ahead and control risk in an environment of ambiguity. One impact of this uncertainty can be seen in stock prices: shares of HCA fell 11%, Tenet fell 25% and Community Health Systems fell 22% the day after the election and have not returned to their pre-election levels.

Last week brought some new signals of what might happen in 2017 and beyond after Mr. Trump announced he was nominating House lawmaker and former orthopedic surgeon Tom Price (R-Ga.) to lead the Department of Health & Human Services (HHS) and Seema Verma, a healthcare consultant, to serve as Administrator for the Centers for Medicare and Medicaid Services (CMS). Both appointments communicate a clear signal of Trump’s intention to reshape the ACA and Medicare/Medicaid in this country with potentially far reaching impacts on health reform, access and payment.

In evolving and uncertain times, it can be helpful to return to three principles and chart a course from there. First, we know healthcare is too expensive in the US—one of the only policy items where Republicans and Democrats both agree. Second, the focus of repealing Obamacare will be on access to care and less so on the delivery of care, where cost and quality will remain ascendant challenges. Third, patients and payers want high-quality care and sophisticated tools to demonstrate their quality. Anchoring on these three truths supports QURE’s fundamental premise that providers and health systems that want to succeed in this uncertain environment must remain focused on delivering value – the highest-quality care at the most efficient price.

Below we outline a few insights on what these developments likely mean for healthcare reform, payment and innovation.

What Do Trump’s Appointments Tell Us about the Future?

Representative Price currently serves as chair of the House Budget Committee and sits on the Health Subcommittee of the House Ways and Means Committee. Like Mr. Trump, Dr. Price has expressed his opposition to the ACA, but unlike the President-elect, he has proposed specific policy changes through bills sponsored in Congress. One such bill, HR2300, would repeal the ACA, eliminate the individual mandate and provide tax credits based on age to purchase health coverage. Price’s proposed bill would also set limits on tax exclusions for employer-sponsored plans and allow insurers to sell coverage across state lines—a provision that Trump has also endorsed on the campaign trail. Price is also in favor of giving states increased control over Medicaid funding through federal block grants based on a per capita funding formula.  

Price was a supporter of the Medicare Access and CHIP Reauthorization Act (MACRA), which provides a strong impetus for providers to move towards value-based care. He has, however, criticized the mandatory programs and reporting requirements that came out of the Centers for Medicare and Medicaid Innovation (CMMI). In September 2016, Price was the primary signatory on a letter from a group of 178 House Republicans and one Democrat asking CMS Administrators to “cease all current and future planned mandates” under CMMI.

Seema Verma, who was running a health policy consulting firm, made a national name for herself in Vice President-elect Mike Pence’s home state of Indiana where she helped broker a deal for Medicaid expansion. Like Price, Verma is a strong proponent of giving states expanded flexibility with Medicaid and supports expanded use of personal Health Savings Accounts (HSAs) to give consumers more control and responsibility for healthcare spending.

Factors Keeping the Focus on Value

While many questions remain, last week provided some important insights into Trump’s potential path forward. Here we highlight four trends, not meant to be exhaustive, indicating that high-value care will remain the important differentiator for successful health systems and providers:

  • Greater consumer responsibility for health spending: The existing trend of shifting costs to consumers and patients is unlikely to be slowed by any of the proposals set forth by Trump or his team. In fact, greater use of tax credits and HSAs is only likely to accelerate this shift. An increasing array of online tools is making it easier for consumers to identify lower cost providers and differentiate based on quality. As more of the cost of care comes out directly out consumers’ accounts, expect continued shifts away from high cost providers, such as the shifts we are seeing in elective outpatient imaging.
  • Sustained pressure on Medicare spending: Medicare makes up 15% of the federal budget today and is unlikely to see support for large spending increases from Dr Price or Mrs. Verma. Even as specific programs change and evolve within CMS, controlling costs will continue to be a priority for the new administration, especially with Representative Ryan leading the House.
  • Continued demand for high-value, low-cost healthcare from employers: Over half of all Americans get health insurance through their employers, and these employers are feeling crushed by rising costs. Regardless of what occurs in Washington, employer focus on controlling costs, such as high deductible plans, will remain a key component in healthcare selection.
  • More competition among payers: Changes such as allowing interstate sales of health insurance products is likely to drive competition among payers for increasingly price-sensitive consumers and cost-conscious employers. This competitive environment will drive continued growth of emerging plan structures, such as tiered-benefits and narrow networks that seek to reward high value providers and punish high-cost, highly variable ones.
  • Increased experimentation at the state level: One of the mantras of those advocating repeal of the ACA has been for increased control at the state-level, especially for Medicaid. Paying attention to your local state environment is likely to be even more important in the coming months and years. We will likely see strong success stories, and some failures, that will hopefully provide lessons for the whole nation.

With these changes there will be winners and losers; not even the Trump administration knows the exact details of how this will unfold.  We do know, however, that pressure to control costs will continue to come from inside and outside of Washington. We also know that variability in quality and cost is becoming a large influencer of both payment decisions and patient choice. Legislation and existing regulation, like MACRA, already create the impetus for moving away from a fee-for-service world, and Republican legislatures will need to figure out how to either refocus or build on existing successes in transitioning to a value-based environment. One of the most important parts of any plan to improve quality and reduce costs is engaging physicians in the process of standardizing care. If you are interested in how QURE’s proven CPV engagement approach can help you work with your physicians to improve value in an uncertain environment, give us a call today.






QURE’s Newest Publication on Our Work Managing Variation in Breast Cancer

Our recent publication that came out last month which highlights our results managing breast cancer in a multi-center trial that included 81 oncology practitioners across two NCI-accredited institutions, a multi-hospital system and a community based practice.

Highlights of the results include:

  • On average, breast cancer patients represented about 46% of the participating clinician’s patient panel; and the average percentage of time teaching was 14.2%
  • Baseline mean scores did not differ among the four sites, but significant variation was seen within each site at baseline.
  • Between baseline and the 4th round of cases and feedback, overall mean quality scores increased at each site. The size of the increase ranged from 14 to 70%  (P<0.01)
  • Each of the domain scores (history, physical, workup and Dx/Tx) also increased significantly from baseline
  • Variation decreased at all sites in all domains
  • Variation in areas of specific clinical interest (surgical decisions, axillary management, radiation therapy, chemotherapy and hormonal therapy) were identified and showed improvement.

Check out the publication here .

Targeting Improvements in Diagnosis to Reduce Costly Medical Errors

In early May, researchers from John Hopkins University published a study in The BMJ which estimated that medical errors lead to over 250,000 deaths in the United States each year (Makary and Daniel, 2016). Many of you will recall the landmark IOM report in 1999, which reported that there were 98,000 unnecessary deaths, erupting into a national uproar about poor quality of care in America (Kohn, Corrigan, and Donaldson, 2000). Fifteen years on, the number is even higher making medical error the third leading cause of death, surpassing common diseases like COPD, stroke and Alzheimer’s. Errors in diagnosis account for a significant portion of these medical errors; one study estimated that diagnostic errors account for nearly 30% of all paid malpractice claims (Tehrani, Ali S. Saber, et al. 2013). David Newman-Toker, MD, PhD, a lead researcher in this area, observed that “diagnostic errors could easily be the biggest patient safety and medical malpractice problem in the United States.”

Diagnostic errors, which occur when a diagnosis is missed, identified incorrectly or delayed, can have a significant impact on the cost and quality of care. In a best case scenario, treatment is delayed or applied inappropriately, leading to increased cost or inconvenience. In a worst case scenario, missed or incorrect treatment leads to significant morbidity or even death. In fact, researchers estimate that the number of misdiagnosis-related claims that cause preventable, permanent damage or death may be as high as 160,000 each year (Newman-Toker et al. 2013).

These studies highlight a serious, persistent problem which the health care community has struggled to address. In this newsletter, we will tackle this complicated issue by outlining difficulties measuring diagnostic errors and exploring a unique approach to improving clinical practice and preventing diagnostic errors.

Difficulties Measuring Diagnostic Errors

Not surprisingly, current tools to detect and study diagnostic errors are often inadequate. Current electronic medical records are not designed to easily flag these errors, longitudinal chart abstraction can be cumbersome and resource intensive, and patient registries are costly to set up and maintain. However, some researchers are taking creative approaches to quantify the problem at the population level.  One group reports that misdiagnosis rates in the U.S. typically average 15% (Bernes and Graber 2008). QURE’s own work has found that clinicians miss the patient’s primary diagnosis approximately 18% of the time, with the highest misdiagnosis rates found in cancer. A 2009 AHRQ report found that 28% of 583 diagnostic mistakes reported anonymously by doctors were life-threatening or had resulted in death or permanent disability (Schiff et al 2009). Another study found that one in ten autopsies uncovered some disease or condition that—had its existence been known when the patient was alive—would have altered his or her care or changed the prognosis (Shojania et al 2003).

At the individual health system and facility level, addressing the problem of missed diagnoses is even harder. Typically, measuring diagnostic errors requires extensive review of a patient’s chart or lengthy follow-ups. Even then, a diagnostic error may not be identified for years, potentially after a series of inappropriate treatments are revealed to be ineffective.

Since measurement of diagnostic error is difficult, most health system and clinical leaders have little understanding of their internal diagnostic error rates and the types of clinical cases most likely to lead to errors. In a 2015 report on diagnostic error, the Institute of Medicine’s Committee on Diagnostic Error in Health Care recognized the need to develop new “approaches to monitor the diagnostic process and to identify, learn from, and reduce diagnostic error” (IOM, 2015). Newman-Toker thinks that most clinical leaders are actually aware of the problem but are “afraid to open up a can of worms they couldn’t close” (Johns Hopkins Medicine 2013). Internist Mark L. Graber, founding president of the Society to Improve Diagnosis in Medicine, further claims that he is unaware of “a single hospital in this country trying to count diagnostic errors” (Boodman 2013).

Unique Approaches to Measure and Improve

Approaches that target system issues are needed to address diagnostic error. System issues include barriers preventing clinician communication, coordination and handoffs. There are also practice issues.  A diagnosis is a collective clinical effort that in today’s practice typically involves a team of health care professionals — from primary care physicians, to nurses, to pathologists and radiologists.  Research indicates that enhanced communication and collaboration among treating health care professionals can significantly improve diagnostic accuracy (IOM 2015). QURE’s own experience with an NCI-designated cancer center found diagnosis scores increased by 49% after members of the multidisciplinary care team came together to develop and implement a common set of diagnostic and treatment pathways. In this case, QURE’s Clinical Performance and Value (CPV) vignettes were used to identify gaps in care for pathways development and then measure compliance with the pathways through constructive feedback on performance across a multidisciplinary team.

For hospitals looking to understand, measure and reduce common diagnostic errors, research conducted by AHRQ has found that case-specific vignette simulations can be an effective tool to tackle this difficult issue (Converse et al., 2015). AHRQ cites a number of advantages of using simulated patient vignettes to measure care quality and identify behaviors that lead to diagnostic error. These advantages include controlling for patient variation, rapidly gathering data on practice patterns without the need for chart abstraction, avoiding challenges of incomplete patient data and the ability to generate large sample sizes to study variation in practice (Converse et al., 2015).  The unique advantage of the simulated case is that the diagnosis is known with certainty (Peabody et al., 2016)

Other methods of delivering feedback on potentially missed diagnoses, such as notifying physicians when a patient discharged from the hospital is subsequently readmitted with a different diagnosis are retroactive, can be difficult to implement in a meaningful way, and may come at the patient’s expense and health (Eva and Norman, 2005).  Again, simulations offer specific advantages and provide proactive learning and feedback to improve diagnostic capabilities. Since the characteristics and ultimate diagnosis of the patient is known in a simulation, systems can objectively measure diagnostic error rates and provide feedback on the missed signs and cognitive miscues that led to the error. Practice data generated from vignettes can be used to quickly provide practicing clinicians with feedback on the appropriateness of the work-up that led to that diagnosis. All this can be done without harming patients or laboring through exhaustive chart reviews.

Vignettes also have the advantage of fostering group discussions that are anchored in specific clinical scenarios, rather than hypothetical case anomalies. Only with vignettes can everyone take care for the exact same patient and then talk about why they did things differently, learning together along the way. These discussions can be key to creating a group collaborative culture, which research suggests has the potential to significantly improve diagnostic accuracy by facilitating conversations among clinicians about individual diagnosis (IOM 2015, Schiff et al. 2005).


Diagnostic error is a significant issue in US health care delivery, leading to poor outcomes and high costs. Despite this physical and economic burden, diagnostic errors are often overlooked because they are difficult to measure, and even harder to improve. However, unique and innovative approaches (such as QURE’s CPVs) offer a rapid, scalable tool to not only measure diagnostic errors at the individual clinician level, but also deliver personal and group feedback to improve performance.

For health systems, physician groups and payers looking to deliver the best possible care for patients, minimize risk and succeed in a value-based payment world, a comprehensive approach to understanding diagnostic pitfalls and getting the right diagnosis the first time is essential.





Berner, Eta S., and Mark L. Graber. “Overconfidence as a cause of diagnostic error in medicine.” The American journal of medicine 121.5 (2008): S2-S23.

Boodman, Sandra. “Misdiagnosis is more common than drug errors or wrong-site surgery”. The Washington Post. May 6, 2013.

Committee on Diagnostic Error in Health Care; Board on Health Care Services; Institute of Medicine; The National Academies of Sciences, Engineering, and Medicine; Balogh EP, Miller BT, Ball JR, editors. Improving Diagnosis in Health Care. Washington (DC): National Academies Press (US); 2015 Dec 29. 9, The Path to Improve Diagnosis and Reduce Diagnostic Error.

Converse L, Barrett K, Rich E, Reschovsky J. Methods of observing variations in physicians’ decisions: the opportunities of clinical vignettes. J Gen Intern Med. 2015 Aug;30 Suppl 3:S586-94.

Kohn L T, Corrigan J M, Donaldson MS (Institute of Medicine) To err is human: building a safer health system. Washington, DC: National Academy Press, 2000

Newman-Toker, David E., and Peter J. Pronovost. “Diagnostic errors—the next frontier for patient safety.” JAMA 301.10 (2009): 1060-1062.

Newman-Toker, David E., et al. “How much diagnostic safety can we afford, and how should we decide? A health economics perspective.” BMJ quality & safety 22.Suppl 2 (2013): ii11-ii20.

Peabody, John W., David R. Paculdo, Diana Tamondong-Lachica, Jhiedon Florentino, Othman Ouenes, Riti Shimkhada, Lisa Demaria, and Trever B. Burgon. “Improving Clinical Practice Using a Novel Engagement Approach: Measurement, Benchmarking and Feedback, A Longitudinal Study.” J Clin Med Res Journal of Clinical Medicine Research 8.9 (2016): 633-40. Web.

Phillips, Lauren. “Rooting Out Diagnostic Error in Health Care.” The Healthcare Finance and Management Association. Feb 10, 2016.

Schiff, G.D., Kim, S., Abrams, R., Cosby, K., Lambert, B., Elstein, A.S., Hasler, S., Krosnjar, N., Odwazny, R., Wisniewski, M.F. and McNutt, R.A., 2005. Diagnosing diagnosis errors: lessons from a multi-institutional collaborative project.

Schiff GD, Hasan O, Kim S, et al. Diagnostic Error in Medicine: Analysis of 583 Physician-Reported Errors. Arch Intern Med. 2009;169(20):1881-1887. doi:10.1001/archinternmed.2009.333

Shojania, Kaveh G., et al. “Changes in rates of autopsy-detected diagnostic errors over time: a systematic review.” Jama 289.21 (2003): 2849-2856.

Tehrani, A. S. S., Lee, H., Mathews, S. C., Shore, A., Makary, M. A., Pronovost, P. J., & Newman-Toker, D. E. (2013). 25-Year summary of US malpractice claims for diagnostic errors 1986–2010: an analysis from the National Practitioner Data Bank. BMJ quality & safet

QURE’s Newest Publication

Take a look at QURE’s latest peer-reviewed publication, “Improving Clinical Practice Using a Novel Engagement Approach: Measurement, Benchmarking and Feedback, A Longitudinal Study.” The study demonstrates how CPVs measure variation in breast cancer care across multiple health systems and, through individual and group feedback, drive significant improvements in adherence to evidence-based care and clinical pathways.

Read it here.

Dr. Peabody Interviewed by Medscape on MIPS

Check out this Medscape article featuring an interview with Dr. John Peabody, QURE’s President, discussing how Medicare’s new MIPS program is part of a larger move towards prioritizing value, and paying physicians accordingly.

The article is available here.

MACRA More than Just another Acronym: Accelerating Down the Path to Value-Based Care

A little over a year ago, Health and Human Services (HHS) secretary Sylvia Burwell announced the goal of tying 30% of payments to quality or value by the end of 2016 . This March, the Centers for Medicaid and Medicare Services (CMS) announced that they had achieved that goal– nearly one year ahead of schedule . CMS attributed the success to a jump in the number of new accountable care organizations (ACOs) and increasing participation of providers in alternative payment models like medical homes and bundled payments. The next milestone of 50% by 2018 is now looking more like an inevitable reality as CMS becomes more aggressive with the shift to value-based care. Mandatory programs like the bundled payment program for hip and knee replacement (known as CCJR) are a sign of the times to come as CMS continues to accelerate the shift towards value-based care.

Much of the framework guiding CMS’ new aggressive push towards value based care is an important piece of legislation signed into law last April by President Obama . The legislation, known as the Medicare Access and CHIP Reauthorization Act, is commonly referred to as MACRA. MACRA codifies how CMS will drive payments based on the quality of care delivered rather than the volume of services (e.g. procedures, visits, tests) provided. MACRA creates a new Merit-Based Incentive Payment System (MIPS) which combines the Physician Quality Reporting System (PQRS), Meaningful Use (MU) EHR incentive program, and Physician Value-Based Modifier into a single payment adjustment. Although MIPS will not directly impact payments 2019, it might just be the law that makes or breaks providers.

Breaking down MIPS
MIPS measure providers in four performance categories: (1) Quality (2) Resource Use (3) EHR Meaningful Use and (4) Clinical Practice Improvement Activities (CPIA). The MIPS quality measurement score continues to mandate PQRS reporting but will use an expanded list of quality measures. CPIA is potentially a powerful idea that assesses physicians in categories like population management, care coordination, practice assessment and steps taken to expedite future participation in alternative payment models. Interestingly, measurements of efficient resource utilization will triple in importance over the first three years of MIPS (from 10% to 30% weighting in the MIPS formula), signaling an added focus by CMS on the elimination of wasteful practices and procedures. See below for weights in the respective four categories.
MIPS table

An Alternative to MIPS is Available: The Alternative Payment Models Track
MACRA stipulates that providers may opt out of MIPS if they participate in an “Alternative Payment Models” (APMs) which can include a number of options including Multi-Physician bundled payments, episode-based payments and condition-based payments. Between 2019 to 2024, APM participating providers will be eligible to receive a 5% annual lump sum bonus on the physician’s fee schedule payments. To qualify, however, providers must meet increasing thresholds for the percentage of their revenue they receive through qualifying APMs.

What should physicians do now?

Embrace Individual Performance Data and Transparency: The new MIPS system will focus on giving a single score to each individual physician. All MIPS scores and individual category scores will be posted on the CMS Physician Compare website. The posted scores will show where providers fall in the distribution of their peers across the country.
Health systems and physician groups, who understand the implication of MIPS, will need to start thinking of efficient ways to measure individual performance data today and prepare their physicians to succeed under the new rules. Under PQRS, groups that did not report data only stood to lose two percent of their revenue. Under MIPS, however, that potential lose could jump to nine percent, depending on how well they score in the four performance categories. On the other hand, physicians who score extremely high, will also be eligible for a 27% payment bonus over a three year period under MIPS . Physicians will not only need to get used to getting measured but also having their performance available to consumers as CMS moves towards using transparency to improve performance.

What should hospitals do now?

Prepare their Providers for Culture Change (A Shift Towards Value-Based Care): Some components of MIPS, such as PQRS, already support elements of group performance reporting to CMS. However, as mentioned previously, most of the quality measures are collected on an individual basis. Hospitals will need to better understand how individual performance of docs is affecting the group and will need to foster a collective culture shift towards measurement and value-based-care. These strategies should focus on specific opportunities for improvement and delivered in a way that is non-threatening, while emphasizing the consequences of falling behind on the road to value based care. Providers are already overwhelmed with existing compliance burdens and MACRA should be presented as a piece of legislation put in place to facilitate the move towards value based care.
A simple approach to system engineering for quality are simulations. The Agency for Healthcare Research and Quality (AHRQ), through the consulting firm, Mathematica, concluded the same . AHRQ sought a reliable measure of care-process that could be conducted across groups of providers which could serve as important feedback on performance. AHRQ’s conclusion was that simulations, similar to the validation work QURE has conducted, is the best available, most robust option for engaging providers and identifying variation.

QURE’s Conclusions

With the passage of MACRA, the federal government has made it clear that the move to value-based care will proceed at an even faster pace. At the same time, CMS is demonstrating a continued willingness to work with providers to achieve these goals using multiple approaches as they seek the best way to pay for and deliver value-based care. One of the key messages from HHS is that it intends to make traditional, volume-based fee for service payment less profitable and more challenging. Providers who embrace value-based payment early and develop a culture of transparency, accountability and adherence to evidence-based guidelines stand a much better chance of thriving through this transition. Health care systems and physician organizations need to tools to prepare their physicians for these changes, and MACRA and MIPS only accentuates this need. QURE’s innovative CPV physician engagement platform has been designed and validated to change physician behavior, improve quality and reduce costs. If your organization needs help preparing your physicians for success, let’s set up a conversation to discuss how QURE can help standardize and elevate your clinical practice.

How Hospitals Succeed Under CCJR: Engage Physicians, Reduce Clinical Variation

On April 1, mandatory bundled payments arrived in orthopedics for lower-extremity joint replacement (LEJR). The Comprehensive Care for Joint Replacement (CCJR) bundled payment program is the first of its kind but there is every indication that CMS will use similar compulsory models in other clinical areas very soon. Understanding and adapting to CCJR will prepare you for these future changes to come. The question, then, is what is the best way to respond?

The CCJR bundle mandates that approximately 800 hospitals across the country assume financial risk for the cost and quality of a complete, 90-day episode of care. The episodes start on the first day of admission and extend through post-acute care for hip and knee LEJRs (MS-DRGs 469-470).

In other words – hospitals are now the payer. They are on the hook not only for the inpatient costs of care but also physician reimbursement and post-acute facility care in skilled nursing facilities, long-term care hospitals, rehabilitation centers and home health within that 90-day period. If hospitals can keep total costs under the target bundle reimbursement they ‘win,’ earning dollars for the difference; they can also add to the win and receive a bonus by earning quality-based performance payments. However, if costs exceed target bundle prices, these hospitals ‘lose’ and must pay CMS back the difference. With so many factors impacting success in CCJR, what are hospitals to do? The answer: engage physicians now and elevate the care they provide to this patient population.

The driving rationale behind CCJR and forthcoming bundled payment models is enhancing the VALUE in healthcare, i.e. providing the highest quality care at the lowest possible price. LEJRs are one of the most common and expensive surgeries incurred by Medicare beneficiaries and the variation in care and outcomes is well documented. For some hospitals, over half of LEJR costs are actually incurred after the patient leaves the hospital, in the post-acute setting. CCJR was designed to incentivize hospitals to work closely with their physicians to reduce the variation in how LEJRs are performed and improve post-procedure care and outcomes. In the LEJR care path, physicians have responsibility for developing best practices based on the evidence base, coordinating and managing several aspects of patient care during surgery and recovery, and ensuring their patients are discharged to an appropriate level of post-acute care.

Physician adherence to best practice standards greatly impacts post-surgical complications and LEJR bundled costs. According to the American Joint Replacement Registry, approximately 70% of LEJR surgical revisions occur within 3 months of the initial surgery, with infection and inflammation being the most common causes of readmission. There is readily-available guidance from the National Surgical Infection Prevention program (2004), Surgical Care Improvement Project (2006) and American Association of Hip and Knee Surgeons (2013) on pre-operative, prophylactic antibiotic infusion that can prevent these infections from occurring. Adherence to evidence-based medicine, however, is poor and the best guidance and protocols have minimal impact if they are not put into practice.

Thus, hospitals must engage their physicians and facilitate alignment around evidence-based pathways to make it under CCJR.  QURE’s President, John Peabody, MD, PhD, in the webinar “Demonstrating Who You Are in CCJR: Data Describes the Problem, Providers Deliver the Solution” (accessible on the QURE website here: CCJR Webinar Link) outlined how to engage orthopedic surgeons in CCJR. QURE recommends an approach that ‘Elevates the Quality of Practice Standardization’ by:

  • Measuring Clinical Practice through use of an easily accessible measurement tool, such as Clinical Performance and Value (CPV®) vignettes, to capture and analyze clinician behavior and practice from intake through post-acute treatment.
    • Baseline measurements, which few institutions do in enough meaningful detail, enable targeted efforts to reduce specific areas of unnecessary variation that impact cost and quality the most.
  • Instilling Accountability by serially assessing individual and group-level performance and improvement on targeting areas of variation.
    • Provide transparent performance scores and incentivize with CME credits.        
  • Facilitating Physician Behavior Change with customized feedback, education on improvement opportunities, and performance comparisons to their actual peers.
    • Group level discussions focused on care variation are among the most efficient ways to standardize practice.

Practice change doesn’t happen overnight. Hospitals will have to begin to lay the foundation for stronger provider engagement and practice changes in orthopedics to avoid CCJR penalties that will begin in one year. Additionally, the best hospitals will heed CJR as a clarion call to consider the changes required to engage physicians in the next targets for mandatory bundled payment (e.g. pneumonia, cardiology). Real cost-savings are only possible when physicians, the key providers of care, shift their practice towards evidence-based standards. In this scenario, hospitals, physicians AND patients win.


Dr. John Peabody Delivers Presentation on Engaging Providers to Succeed in CCJR Bundle Program

On February 24, 2016 Dr. John Peabody delivered an engaging presentation around structuring partnerships under the Center for Medicare and Medicaid Services’ Comprehensive Joint Replacement Bundle Program (CJR). Dr. Peabody and Jay Sultan of Edifecs provided examples of hands-on approaches for hospitals to strategically align orthopedic surgeons and post-acute providers under the CJR program. The presentation focused on tools that providers can use to help manage their performance to be successful under the new value-based environment.

The informative webinar focused on the following elements:

  • Learning about the impact of unwarranted clinical variation on quality and cost.
  • Tools and strategies for measuring clinical practice variation and engaging physicians in the new value-based environment.
  • Examples in which hospital leadership can partner with their physician leaders to standardize practice under the CJR bundle.
  • Effective strategies for accountability and alignment in the inpatient care and post-acute care through physician engagement and education.


A full audio recording of the webinar can be accessed here.

A Promising Future for Bundled Payments

You have no doubt been hearing the buzz around bundled payments lately. The Bundled Payments for Care Improvement (BPCI) initiative, launched in 2013 by the Centers for Medicare and Medicaid Services (CMS), is growing rapidly and now includes 48 different clinical conditions and over 1,600 different bundles at organizations across the country. More recently, CMS released a Final Rule on November 16th outlining the first ever mandatory episode-based bundled payment program targeting hip and knee replacements, one of the most common inpatient surgeries for Medicare beneficiaries (more on this later…). United Healthcare also announced recently they would be expanding their innovative oncology bundled payment initiative following favorable results in a pilot across five oncology practices. In this pilot, cancer care costs were reduced by 34%– or approximately $40,000 per chemotherapy patient[i]. Remarkably, United was able to accomplish this even with the skyrocketing costs of chemotherapy drugs (see our last newsletter on increasing cost of cancer drugs)[ii].

Interest in bundled payments as a means of controlling costs and improving quality has steadily increased. With providers and payers experiencing greater success with bundles, we’ll look back at early programs and evaluate lessons for future implementations.

Overview of Bundles (A Reminder)

Under a bundled payment arrangements, providers are reimbursed for a set of services rather than for every individual unit of care (as in the standard fee-for-service model). Providers are reimbursed under payment arrangements that define the breadth of the bundle (i.e., what services are included and over what length of time) and contain specific financial and performance accountability measures. These episodes can be relatively straightforward, such as bundling inpatient hospital services with physician payments, but can also be extended to include readmissions, outpatient care, and/or post-acute services within a single payment. A bundled payment arrangement therefore asks providers to assume financial risk for a wider array of services and costs, while offering financial incentives to share in the upside if that care can be delivered more efficiently and cost-effectively.

Lessons from an Ambiguous Start

Results from early implementations of bundled payments were mixed. One of the first examples of payment bundles was the very successful introduction of the DRG payment system in the early 1980s. Bundling inpatient hospital services into a single payment had a profound effect on care, leading to a dramatic 24% reduction in length of stay (3.4 fewer days) with no change in mortality or readmissions 180 days post discharge[iii]. Expanding bundles beyond DRGs yielded mixed results. The Acute Care Episode (ACE) Demonstration, launched in 2009 by CMS, provided an early glimpse into how bundled payment could affect the quality cost ratio. The ACE project bundles covered all Medicare Part A and Part B services, including physician services, but were limited to specific cardiovascular and orthopedic procedures. Participating hospitals reported a 10 to 12 percent decrease in material costs during the first year and no corresponding price increases in later years. According to a report released by the Healthcare Financial and Management Association, the largest cost savings came from standardization of high cost supplies, such as stents and joint implants[iv]. Dr. Landgarten, MD, CMO and Chief Quality Officer of the Tennessee-based health system Ardent– one of the five participating hospitals in the ACE project– attributed savings in orthopedics to physician engagement around supply costs, remarking that, “[physicians] have a vested interest in the financial and clinical outcome, and it was that leverage that helped achieve supply costs savings.”[v] There is only so much juice, however, in supply costs.

The Integrated Healthcare Association (IHA) bundled payment initiative and the PROMETHEUS Bundled Payment Experiment yielded less promising results, but led to important insights into the importance and complexity of execution. IHA attributed the difficulties it faced in implementation to the lack of information technology infrastructure and capabilities to disburse revenue[vi]. Delays in regulatory approvals of contracts with payers and a lack of consensus around how to define the bundle also hindered implementation[vii]. The PROMETHEUS Bundled Payment Experiment faced a number of similar challenges as well, particularly with regard to payment methodology. Specifically, pilot sites had difficulty executing contracts due to conflicting interests from providers and payers around payment distribution and bonuses. Findings from the PROMETHEUS program were published in Health Affairs and the authors also cited hesitations from providers for fear of sustaining significant financial losses[viii].

A Strong Resurgence                                                 

Much of the recent activity around bundles has been spurred by CMS, which has prioritized bundled payments as a key value-based purchasing strategy to help achieve CMS’ ambitious goal of having 30% of Medicare fee-for-service payments switch to value-based payments by 2016 and 50% by 2018[ix]. Building on the success and lessons of previous programs, CMS has, for the first time, made bundled payments mandatory for hospitals, doctors, and other providers. Beginning in 2016, Medicare’s Comprehensive Care for Joint Replacement (CCJR) program for knee and hip replacements will be mandatory in 65 metropolitan areas[x]. As outlined in the Final Rule, hospitals would be financially accountable for not only the costs of the surgery and subsequent hospital stay but also the payments to the surgeons and related medical costs in the 90 days after discharge.

Commercial payers like United are also following in the footsteps of CMS. Baptist Health South Florida reported savings of approximately two percent after the first year of its special oncology bundle program and is expanding to additional surgical and procedural services[xi]. OrthoCarolina, a collection of orthopedic practices across North Carolina, has also expanded their bundle program to other payers following early success with Blue Cross and Blue Shield of North Carolina (BCBSNC) around total knee replacement surgeries [xii].Most recently, as participants of Medicare’s BPCI program, OrthoCarolina reported that they had observed reductions in readmission rates (down 77%), length of stay (down 18%) and postoperative skilled nursing facility care placement (down 31%). According to Daniel B. Murrey, MD, CEO of OrthoCarolina, the program’s success was largely attributed to case managers who arranged preoperative physical therapy, care planning and management, and patient-specific goal setting. Case managers also called patients regularly during the first year after surgery[xiii].

Going Forward: Ensuring Success of Bundled Payment  

Bundled payment has laid down deep roots and is likely to only grow stronger over the coming years. Economic pressure to contain costs, greater transparency highlighting quality deficiencies, and stronger IT infrastructure to analyze and administer a bundle will support this growth. While these elements are all key, perhaps the greatest hurdle to a successful bundled payment, and thus the greatest opportunity for those that can successfully execute, is meaningfully engaging physicians to reduce unwarranted variation and standardize care around best practices.

Culture change and physician engagement have often been described as the most difficult challenges in healthcare. A number of the previous failures in bundled payment initiatives were attributed to a lack of engagement and alignment of objectives around the new payment model. Successful bundled payment initiative will require many doctors to change the way they think about and provide care. Hospitals and organizations will need to engage doctors by providing training tools, including measurement and feedback, which allow physicians to take the leadership role in modifying the processes of care to achieve improvement and financial success.

At QURE, we have a very unique tool, Clinical Performance and Value (CPV) vignettes, which are designed to engage clinicians in this exact type of care standardization. If success in bundled payment is top of mind for you, we would love to share more about how we can help.



[i]United Health Group, Study: New Cancer Care Payment Model Reduced Health Care Costs, Maintained Outcomes, July 2014,

[ii] Julie Appleby, UnitedHealthcare Expands Effort To Rein In Rising Costs Of Cancer Treatment, October 29, 2015.

[iii] Kahn, Katherine L., David Draper, Emmett B. Keeler, William H. Rogers, Lisa V. Rubenstein, Jacqueline Kosecoff, Marjorie J. Sherwood, Ellen J. Reinisch, Maureen F. Carney, Caren Kamberg, Stanley S. Bentow, Kenneth B. Wells, Harris Montgomery Allen, David Reboussin, Carol P. Roth, Carole Chew and Robert H. Brook. The Effects of the DRG-Based Prospective Payment System on Quality of Care for Hospitalized Medicare Patients: Executive Summary. Santa Monica, CA: RAND Corporation, 1991.

[iv] Healthcare Management Financial Association, Pursuing Bundled Payments Lessons from the ACE Demonstration,  April 2012,

[v] Herman, Bob. Two Major Lessons From CMS’ Bundled Payment ACE Demonstration,

[vi] Caillouette, James and Robinson, James. The “Failure” Of Bundled Payment: The Importance Of Consumer Incentives, August 21, 2014.

[vii] RAND Corporation, Effort to Adopt Bundled Payments Across California Falls Short of Goals, August 4, 2014.

[viii]  Peter S. Hussey, M. Susan Ridgely and Meredith B. Rosenthal, The PROMETHEUS Bundled Payment Experiment: Slow Start Shows Problems In Implementing New Payment Models, November 2011.

[ix] Centers for Medicare and Medicaid Services, Better Care. Smarter Spending. Healthier People: Paying Providers for Value, Not Volume, January 26, 2015.

[x] Centers for Medicare and Medicaid Services,


[xii] BlueCross BlueShield of North Carolina, BCBSNC and OrthoCarolina Team Up to Reduce Cost and Improve Quality of Knee Replacement Surgeries, March 26, 2014.

[xiii] Peggy L. Naas MD, MBA, and Brian McCardel, MD, Finding Value in Value-Based Payment Models: An update on bundled payment models for orthopaedics,


QURE Publishes Article on Using Vignettes to Measure and Encourage Adherence to Clinical Pathways in a Quality-Based Oncology Network

Check out QURE’s latest published article in Managed Care on our experience building the Moffitt Oncology Network Initiative using CPVs.

Our study suggests that fostering the adoption of breast cancer clinical pathways into an oncology network is feasible; however, adherence to pathways in breast cancer is varied and reducing such variation is a priority as oncology networks continue to grow in popularity.

Check out the full article here.

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