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The American Journal of Managed Care June 2018
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Physician Practice Variation Under Orthopedic Bundled Payment
Joshua M. Liao, MD, MSc; Ezekiel J. Emanuel, MD, PhD; Gary L. Whittington, BSBA; Dylan S. Small, PhD; Andrea B. Troxel, ScD; Jingsan Zhu, MS, MBA; Wenjun Zhong, PhD; and Amol S. Navathe, MD, PhD
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Physician Practice Variation Under Orthopedic Bundled Payment

Joshua M. Liao, MD, MSc; Ezekiel J. Emanuel, MD, PhD; Gary L. Whittington, BSBA; Dylan S. Small, PhD; Andrea B. Troxel, ScD; Jingsan Zhu, MS, MBA; Wenjun Zhong, PhD; and Amol S. Navathe, MD, PhD
This study demonstrates that variation reduction is an important, but not requisite, component of organizational success under orthopedic bundled payment.
RESULTS

The overall patient and program characteristics across the BHS bundled payment program have been described previously.5 From that sample, we included 34 physicians in this analysis, 97% of whom were male, 100% whom had obtained allopathic medical degrees, 91% of whom had graduated from US medical schools, and 82% of whom were board certified (Table). On average, physicians in this cohort had 26 years of experience and a total volume of 106 cases across our study period, ACE year 1 to BPCI year 2.

The mean age of patients cared for by these physicians was 72 years. They were predominantly female, and the mean Elixhauser Comorbidity Score was 1.1, with the 5 most common coexisting clinical conditions being hypertension (76%), diabetes (21%), hypothyroidism (21%), obesity (19%), chronic obstructive pulmonary disease (16%), and depression (10%). Readmissions and ED visits occurred in 5% and 6% of cases, respectively.

Implant Costs

Overall, mean implant costs decreased 5.8% across the study period, from $5026 in the first year of bundled payment (ACE year 1) to $4732 through 5 years (BPCI year 2). There was also an overall downward shift in distribution of implant costs among physicians. Compared with ACE year 1, for example, more physicians in BPCI year 2 had average implant costs between $4500 and $5000 (22 vs 9) and fewer physicians had average implant costs of $5550 or greater (1 vs 10) (Figure 1).

After accounting for patient and physician characteristics, higher implant cost was associated with younger patient age and earlier study year. There was a decline in between-physician variation across study year and program period (eAppendix Figures 1 and 2 [eAppendix available at ajmc.com]), from an ICC of 0.26 in ACE year 1 to 0.06 in BPCI year 2, a difference that was not statistically significant on pairwise testing (P = .26). Adjusted random effects analysis demonstrated statistically significant between-physician variation in implant costs (overall ICC = 0.11) unexplained by observable variables (P <.001) (eAppendix Table 1).

Institutional PAC Provider Utilization

The proportion of patients discharged to institutional PAC providers remained relatively steady during ACE: 42% in ACE year 1 and 40% in ACE year 3 when PAC was not included in bundled payment. When PAC was included in bundles under BPCI, however, discharge to institutional PAC providers decreased to 31% in BPCI year 1 and to 25% in BPCI year 2. Across the ACE program period, most physicians discharged at least half of their patients to institutional PAC providers (Figure 2). In comparison, by BPCI year 2, most physicians discharged at least half of their patients to home or HHAs (80% of physicians in BPCI year 2 compared with 38% and 42% in ACE year 3 and ACE year 1, respectively).

After multivariable adjustment, higher institutional PAC provider utilization was associated with earlier study year, female patient sex, younger patient age, higher Elixhauser Comorbidity score, and readmissions. Between-physician variance in institutional PAC provider utilization decreased over the study period from 0.59 in ACE year 1 to 0.48 by BPCI year 2, with ICCs of 0.15, 0.14, and 0.13 in ACE year 1, ACE year 3, and BPCI year 2, respectively, without a statistically significant overall change (P = .86). Overall, the extent of between-physician variation (overall ICC = 0.09) unexplained by observable variables was also statistically significant (P <.001) (eAppendix Table 2).

Total Episode Payments

Over the 5 years of the study, mean total episode payments decreased 21% from $23,634 in ACE year 1 to $18,699 in BPCI year 2. Compared with ACE year 1, there was an overall narrowing and downward shift in distribution of total episode payments among physicians. For example, the number of physicians with total episode payments less than $20,000 increased from 6 to 21 and there were fewer physicians with total episode payments greater than $27,500 (9 vs 2) (Figure 3).

After accounting for readmissions and ED visits, as well as patient and physician characteristics, higher total episode payment was associated with younger patient age and earlier study year.

Between-physician variance in total episode payments increased slightly over time (eAppendix Figures 3 and 4), and the ICC decreased by a statistically nonsignificant amount, from 0.12 in ACE year 1 to 0.10 in BPCI year 2 (P = .81). The extent of between-physician variation (overall ICC = 0.07) unexplained by observable variables was also statistically significant (P <.001) (eAppendix Table 3).

Association Between Physician Practice Characteristics and Outcomes of Interest

In multivariable analyses, increasing physician clinical practice volume was associated with small but significant decreases in total episode payments (coefficient, –0.00022; P <.001) and institutional PAC provider utilization (coefficient, –0.00020; P <.001), but not changes in implant costs (coefficient, 0.00015; P = .32). Results from analysis using a dichotomized volume indicator did not yield qualitatively different results. Similarly, lower practice quality, defined as increasing proportion of episodes with PLOS, was associated with increased total episode payments (0.2086; P = .002) and increased institutional PAC provider utilization (2.2347; P = .001) but not changes in implant costs (0.1695; P = .19).


 
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