Comparing the Impact of Voluntary and Mandatory Bundled Payments on Disparities in Surgical Care

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Project Summary This study examines how bundled payments implemented via voluntary and mandatory participation impact access and outcomes among vulnerable patients – evidence needed to inform policymakers about the broader policy impact and whether to scale bundled payments through voluntary and/or mandatory participation. As the largest payer for lower extremity joint replacement (LEJR), one of the fastest growing elective procedures in the country, Medicare has implemented bundled payments in an effort to improve value. However, there are marked disparities in access and outcomes for LEJR. Bundled payments could reduce or exacerbate LEJR disparities for patients who are vulnerable based on race/ethnicity or socioeconomic status, and these effects may vary by participation mechanism. Hospitals serving vulnerable patients may be less likely to participate in voluntary bundled payment programs because of perceptions that cost and outcomes are harder to influence among these patients. Different effects may occur among vulnerable patients in mandatory bundled payment programs, in which hospital participation is based on policymaker perceptions about the likelihood of cost savings. As a result, it is important for policymakers to understand whether and how access and outcomes change differentially for vulnerable versus non-vulnerable individuals after hospitals initiate participation in bundled payments. Additionally, understanding how observed effects vary by duration of participation, continuation versus disenrollment in bundled payments, or safety-net status of hospitals are key facets of understanding policy impact. We hypothesize that hospitals in bundled payments will be less likely than non- bundled payment hospitals to be located in markets with a high proportion of vulnerable patients; that compared to non-vulnerable patients, vulnerable patients will have a lower likelihood of receiving elective LEJR after hospitals start participating in bundled payments compared to hospitals that do not participate; and that compared to non-vulnerable patients, vulnerable patients will experience smaller increases in quality and smaller decreases in utilization and cost after hospital participation in bundled payments.