Spending and quality after three years of Medicare's bundled payments for medical conditions: quasi-experimental difference-in-differences study.

To evaluate whether longer term participation in the bundled payments for care initiative (BPCI) for medical conditions in the United States, which held hospitals financially accountable for all spending during an episode of care from hospital admission to 90 days after discharge, was associated with changes in spending, mortality, or health service use. Quasi-experimental difference-in-differences analysis. US hospitals participating in bundled payments for acute myocardial infarction, congestive heart failure, chronic obstructive pulmonary disease (COPD), or pneumonia, and propensity score matched to non-participating hospitals. 238 hospitals participating in the Bundled Payments for Care Improvement initiative (BPCI) and 1415 non-BPCI hospitals. 226 BPCI hospitals were matched to 700 non-BPCI hospitals. Primary outcomes were total spending on episodes and death 90 days after discharge. Secondary outcomes included spending and use by type of post-acute care. BPCI and non-BPCI hospitals were compared by patient, hospital, and hospital market characteristics. Market characteristics included population size, competitiveness, and post-acute bed supply. In the 226 BPCI hospitals, episodes of care totaled 261 163 in the baseline period and 93 562 in the treatment period compared with 211 208 and 78 643 in the 700 matched non-BPCI hospitals, respectively, with small differences in hospital and market characteristics after matching. Differing trends were seen for some patient characteristics (eg, mean age change -0.3 years at BPCI hospitals In this longer term evaluation of a large national programme on medical bundled payments in the US, participation in bundles for four common medical conditions was associated with savings at three years. The savings were generated by practice changes that decreased use of high intensity care after hospital discharge without affecting quality, which also suggests that bundles for medical conditions could require multiple years before changes in savings and practice emerge.

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Competing interests: All authors have completed the ICMJE uniform disclosure form at www.icmje.org/coi_disclosure.pdf and declare: support from the Commonwealth Fund for the submitted work; JAR reported consulting fees from Tuple Health. ASN reported receiving grants from Hawaii Medical Service Association, Anthem Public Policy Institute, the Healthcare Research and Education Trust, Cigna, Ochsner Health System, United Healthcare Blue Cross Blue Shield of NC, and Oscar Health; personal fees from Navvis Healthcare, Navigant, National University Health System – Singapore, Singapore Ministry of Health, the Medicare Payment Advisory Commission, and Agathos; personal fees and equity from NavaHealth; equity from Embedded Healthcare; speaking fees from the Cleveland Clinic; serving as a board member of Integrated Services. without compensation, and an honorarium from Elsevier Press, none of which are related to this manuscript. Since 2016, EJE reports speaker’s fees from Tanner Healthcare System, Mid-Atlantic Permanente Group, American College of Radiology, Marcus Evans, Loyola University, Oncology Society of New Jersey, Good Shepherd Community Care, Remedy Partners, Medzel, Kaiser Permanente Virtual Medicine, Wallace H Coulter Foundation, Lake Nona Institute, Allocation, Partners Chicago, Pepperdine University, Huron, American Case Management Association, Philadelphia Chamber of Commerce, Blue Cross Blue Shield Minnesota, UnitedHealth Group, Futures Without Violence, CHOP, Washington State Hospital Association, Association of Academic Health Centers, Blue Cross Blue Shield of Massachusetts, American Academy of Ophthalmology, Lumeris, Roivant Sciences, Medical Specialties Distributors, Vizient University Healthcare System, Center for Neuro-Degenerative Research, Colorado State University, Genentech Oncology, Council of Insurance Agents and Brokers, Grifols Foundation, America’s Health Insurance Plans, Montefiore Physician Leadership Academy, Greenwall Foundation, Medical Home Network, HFMA, Ecumenical Center – UT Health, American Association of Optometry, Associação Nacional de Hospitais Privados, National Alliance of Healthcare Purchaser Coalitions, Optum Laboratories, Massachusetts Association of Health Plans, District of Columbia Hospital Association, Washington University. Since January 2017, EJE has been a venture partner with Oak HC/FT, a firm that invests in health services but not pharmaceuticals or devices. EJE is on the board of two start-ups: Village MD and Oncology Analytics. EJE has investments in Gilead, Allergan, Amgen, Baxter, and UnitedHealth Group.