UnitedHealth Adopts Bundled Payment Model for Orthopedic Care

By  – December 12, 2016

Healthcare payers are finding that their reimbursement totals show higher spend for hip, knee, and spine surgeries and other orthopedic care when compared to other forms of treatment. Along with the higher spend, members regularly show poor health outcomes, said Michelle Lobe, Vice President of Network Strategy and Innovation at UnitedHealthcare. To counter these problems, UnitedHealthcare announced this month in a press release its new prospective bundled payment model for hip, knee, and spine surgeries.

“The main reason for developing a [bundled payment] program is that, in most large companies, high spend is really associated with orthopedic procedures,” Lobe told “For the most part, about 17 percent of company spend is in the orthopedic arena. Hip, knee, and spine procedures constitute about 33 percent of that.”

“Many companies are looking for ways to streamline payment and provide quality centers for their members to have more efficient, high-quality surgery,” Lobe continued. “That was the birth of why we focused on centers of excellence for spine and joint surgery.”

With 17 percent of all healthcare spending based on treating musculoskeletal conditions and 33 percent for hip, knee, or spine treatment, “to put a real number on that, 17 percent of average healthcare spend is about $45 dollars per member per month. That’s real cost for a company,” said Dr. Jon R. Friedman, Chief Medical Officer of Complex Medical Conditions at Optum.

With a large percentage of payer reimbursement based in orthopedic care, health insurance companies that implement bundled payment models and partner with high-quality providers may see a decrease in cost for orthopedic surgeries. The decrease in cost may be related to members spending fewer days in the hospital and stronger population health results, said Lobe.

“We measure across the whole continuum,” Lobe added. “We looking at reductions in a number of measures. We’re looking at population measures. We’ve seen results in reduction in readmission rates and reduction in length of stays.”

Bundled payment models would be a beneficial solution for  cutting costs. Bundles hold healthcare providers accountable for quality of care and patient safety. For instance, providers looking to boost their revenue would be incentivized through a bundle to ensure fewer costly hospital-acquired infections.

By partnering with high quality providers, payers may also find their members experience better outcomes and decreased cost, the UnitedHealthcare press release stated.



Josh Sandberg

Josh Sandberg is the President and CEO of Ortho Spine Partners and sits on several company and industry related Boards. He also is the Creator and Editor of OrthoSpineNews.

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