April Fools? CJR incentivizes Hospitals to be PRO’s at Surgical Patient Experience

April 1st marks the start of the five-year, Comprehensive Care for Joint Replacement (CJR) mandatory bundled payment model from the Centers for Medicare and Medicaid Services (CMS) for Medicare patients undergoing hip or knee joint replacement surgery. Hospitals in 67 MSAs will join their peers currently participating in the Bundled Payment for Care Improvement (BPCI) initiative. CMS estimates the CJR program will save $343 million over the five-year life of the program. Reducing cost is good for all involved so long as the quality of care is not sacrificed. Based on the program’s final rule as written, CJR holds the promise to improve overall quality of care.

Hats off to CMS for constructing a model that incents providers to compete on improving the overall “patient experience.” Yes, I said: “EXPERIENCE!” This term used by global companies like BMW, Westin and Vail Resorts. Each of those organizations spend significant energy ensuring their customers have an exceptional experience and rely on loyalty and repeat business, based on their customer’s experience. Positive customer experience is Integral to the fabric of these highly successful companies.

As a 30-year veteran in healthcare, and a recent orthopedic patient (yes, a ski accident at a Vail property), I can attest that healthcare has a lot to learn about how to create and deliver a consistently positive experience across the surgical episode. From the discussion of outcome expectations with your surgeon, to pre-op preparation/education to surgical scheduling to the surgical experience itself through the post-operative care management instructions and coordination, the healthcare industry typically relies on paper forms that are usually found crumpled in the bottom of a draw-string plastic bag with the patient’s shoes. When a hip or knee joint replacement is equivalent in cost to a BMW 3 series, why would this type of experience acceptable to anyone?

While CMS may not have all the right measures as it rolls-out the CJR model, its 20-point quality scale leverages two current quality surveys that can be an initial proxy for patient experience. It provides hospitals the opportunity to earn 2 points (what I call extra credit) just for collecting “Patient Reported Outcomes,” (PROs) in a format acceptable to CMS in performance year one (April 1 – September 30, 2016). Thereafter, PROs will become an ongoing performance measure. CMS has even created allowances for shortening inpatient stays, loaning technology and encouraging gainsharing among providers to help focus all parties on optimizing the episode of care.

In order for a hospital to qualify for the maximum reconciliation amount over baseline (i.e., up to 20% of patient charges in performance years 4 and 5), they need to reduce costs versus the baseline, plus collect PROs and demonstrate superiority versus their MSA peers each performance year. With the reported average cost of a hip or knee episode at $26,000, the reconciliation amount can range from a savings or loss of $5,000 per patient. Certainly, that is an amount sufficient enough for providers to shift their practices from fee-for-service volume to patient experience focused, value based care.

Congratulations to CMS for helping healthcare providers understand that surgical care is NOT just about a successful procedure. It is about restoring a patient’s health and providing an exceptional experience in the process! And that is no April fools…

Authored by: Patrick C. McCarthy, Esq.

ValidCare is a digital healthcare company. We own and operate the industry’s only “Patient Experience Network,” for surgical procedures. Our customers use our network to accelerate their transformation and performance in value-based care models.

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