National Study’s Findings Supports Minimus Institute’s Use of Bundled Payments to Reduce Costs of Joint Replacement Surgery by 20 Percent

MONTEREY, Calif., Jan. 23, 2017 /PRNewswire/ -- Monterey-based Minimus Institute, a national state-of-the-art surgical institute that is a leader in commercially insured bundles, got a boost recently from a national study on such payments.

A study published in the Journal of the American Medical Association found bundled payments for joint replacement surgery can reduce costs by up to 20 percent without sacrificing patient outcomes.

Minimus, which has championed the use of bundled payments for individual patients, generates even more savings for patients by using commercially insured bundles for larger companies and their employees and federally insured patients.

According to ASC Communications, in the study researchers used Medicare claims to analyze 3,924 lower extremity joint replacement procedures at San Antonio-based Baptist Health System between July 2008 and June 2015. The patients participated in Centers for Medicare & Medicaid Services' (CMS) voluntary Acute Care Episodes and Bundled Payments for Care Improvement demonstration projects.

The five findings of the study:

1. Baptist Health System achieved on average $5,577 in cost savings per joint replacement procedure.
2. During the seven-year period, Baptist Health System reduced average Medicare costs by 20.8 percent for 3,738 joint replacements without complications.
3. For 204 episodes with complications, Medicare episode expenditure fell 13.8 percent on average.
4. Episodes with prolonged length of stay fell 67 percent.
5. Study researchers estimated if every hospital utilized this bundled payment model, Medicare could save $2 billion annually.

In a bundled payment situation, providers and/or healthcare facilities are paid a single payment for all the services performed to treat a patient undergoing a specific episode of care.

Under this model, a payer would collectively reimburse the providers involved, using a set price for the episode of care, which is usually based on historical costs. Providers who exceed the pre-arranged reimbursement for the surgery bear the financial responsibility for overages, which is intended to encourage standardized, cost-effective care decisions.

The federal government has initiated broad adoption of the bundled payment methodology in the inpatient setting. This has not, however, been widely adopted in the ambulatory environment with commercially insured or federally insured patients.

From 2010 to 2015, over 2,000 commercially insured bundled surgical cases were performed in California ASCs with overnight stay capability administered by Global One Ventures ("Global 1") a Third Party Administrator (TPA). The surgery case types included total and partial joint replacement and repair, major spine surgery, hysterectomy, thyroidectomy, mastectomy and breast reconstruction. The payers included Blue Shield of California, UHC, and large self-insured employers and union groups.

The bundle included all facility and professional fees during the episode of care. The bundled surgical cases were managed by a TPA with a network of 38 ASCs and over 300 physicians. The bundled payment agreements were approved by the California Department of Managed Care (DMHC) and underwent a regulatory review by the California Department of Insurance (DOI).

Results from the implementation included: high patient satisfaction rates (98% would recommend a bundled payment methodology to friends); low complication rates (ER rate, infection rate and readmission rate of 0.67% in 2015); and significant financial savings (an average of $7,648 per case). The total cost is 30%-60% less per bundled case than if the procedure had been performed in the hospital setting

Minimus Institute is an extension of Monterey Peninsula Surgery Centers (MPSC), one of the largest locally owned and operated outpatient surgery organizations in the United States.  Minimus extends MPSC's outreach to formally become a national surgery referral center offering patient-focused surgical care in a concierge setting, featuring world-class surgeons and an innovative transparent pricing and outcome reporting system.

Background on MPSC:
MPSC and its surgeons are recognized leaders in outpatient surgical care as measured by the high demand for its services, extremely low infection rates, 99% patient satisfaction scores and affordable, transparent pricing. It is known for performing complex surgery, including total joint replacements, major spine surgeries, hysterectomies, breast reconstruction and thyroidectomies in the outpatient setting. In excess of 31,500 surgical procedures in 13 specialties are performed annually at MPSC by its 190 physicians on staff. Our world class surgeons, anesthesiologists, technology and techniques have resulted in exceptionally low complication rates and soaring patient-satisfaction scores.  

Minimus Institute:
Minimus Institute is a national state-of-the-art surgical institute located in a beautiful setting on California's Central Coast, providing patients access to world-class surgeons and exceptional value. Offering transparent pricing and clear, comprehensive outcome information and patient-satisfaction scores, Minimus demystifies the surgical-care experience allowing patients to make the most informed decisions about their care.

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SOURCE Minimus Institute