By Guest Blogger Dr. Zeev Kain, President, American College of Perioperative Medicine and Chancellor’s Professor Department of Anesthesiology & Perioperative Care, University of California, Irvine School of Medicine.

CMS recently announced the Comprehensive Care for Joint Replacement (or CJR) demonstration, which requires over 800 hospitals to accept bundled payments for lower extremity joint replacement patients (Federal Register).

How does CJR work? Briefly, each hospital is given a bundled target price based on hospital-specific historical episode expenditures and regional episode costs. If a hospital's average episode cost is below the target price, they can receive a reconciliation payment (gain) from CMS. If their average cost is above the target price, they will owe CMS the difference (loss), beginning after the first year of the program.

In this model, hospitals have a huge financial stake in what happens to patients during the entire episode of care, so CMS is allowing hospitals to establish “CJR partners” in order to better coordinate care across the care continuum and control costs. These CJR collaborators may include: physicians or non-physician practitioners, physician group practices, in-patient rehab facilities, long-term care hospitals, skilled nursing facilities, home health agencies and provider/supplier of outpatient therapy services.

Prior to engaging in any “gain sharing” agreement, a hospital must establish written criteria that must be related to the quality of care and is not based on the volume of business generated by the partner. Hospitals can share both downside risk and upside gains with these “partners.” But CMS sets caps in the amount of payments that a “partner” can receive or make.

To learn more, join us at the Interdisciplinary Conference on Orthopedic Value Based Care in Newport Beach, where Kelly C. Price, Chief of Healthcare Data Analytics DataGen, Jonathan W. Pearce, Principal at Singletrack Analytics, and David Janiec, Director of Contracting at Rothman Institute, will discuss this topic in depth.

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Porter: We can’t solve the problems of health care with incremental add-on

“We can’t solve the problems of health care with incremental add-on solutions,” according to Michael Porter, a leading professor of business strategy and the Key Note speaker at the recent American Society of Anesthesiology 2016 Annual Meeting in Chicago.

“That has never worked,” Porter said. “We have to change the structure of how we deliver health care and how we think about health care.

“The starting point in fixing the problem is to deliver value for the patient. That will require better outcomes that matter to the patient and are relative to the total cost of delivering those outcomes.”

Porter emphasized the need to break the silos between the various medical specialties, as well as among hospitals and insurers.

There are two types of value-based reimbursement — capitation, such as ACOs, and bundled payment. Because bundled payment focuses on a full set of services needed over the cycle of treating a condition, it offers the best value while continuing to reward physicians.

Porter’s speech reflects the spirit behind the Interdisciplinary Conference on Orthopedic Value Based Care, Jan. 21-22, 2017. This conference aims to bring together orthopedic surgeons, anesthesiologists, orthopedic nurses, hospitalists, CRNAs, hospital executives, OR directors, orthopedic executives and many others. The conference will be held in Newport Beach, CA, and will include 3 tracks to address the clinical, operational and financial issues of value based care for the orthopedic patient.

For more information or to register, visit: