Impact of Bundled Payment Reforms on Racial and Socioeconomic Disparities in Hip and Knee Replacement Surgeries

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Project Abstract: Hip and knee replacement surgeries for elderly Medicare beneficiaries have important clinical implications given their effectiveness for advanced osteoarthritis; and important financial implications given their high volume, expenditure, and expected growth in demand. Racial and socioeconomic disparities in the care of these surgeries are well-documented. Our preliminary analysis and other studies have demonstrated that blacks undergo these surgeries less frequently and have poorer outcomes as compared to whites, and that patients from lower socioeconomic strata face greater barriers than those from the upper socioeconomic strata in their access to these surgeries. In 2016, the Centers for Medicare and Medicaid Services introduced the Comprehensive Care for Joint Replacement (CJR) Model, which is a bundled payment reform that bundles/includes most spending related to these surgeries (beginning with the inpatient stay, continuing to post-acute care, and ending 90 days after discharge from the hospital) under a single surgical episode. Hospitals, clinicians and post-acute care facilities are therefore financially incentivized to improve the coordination of care across settings, to keep their spending low and to meet important quality benchmarks. However, experts have raised concerns that in the absence of metrics aimed at reducing disparities, the design of the CJR is likely to exacerbate disparities in hip and knee replacement care across patients of different racial and socioeconomic categories, and across hospitals that serve varying proportions of minority patients. These concerns have considerable face validity, yet the impact of bundled payments in general, and the CJR in particular, on disparities has not been empirically evaluated. In light of these gaps in empirical literature, the aims of our proposal are to evaluate the impact of the CJR on racial and socioeconomic disparities in utilization (Aim 1), inpatient outcomes (Aim 2), and post-acute care outcomes (Aim 3) of hip and knee replacement care. Furthermore, we will identify key mechanisms that influence CJR's impact on disparities, and investigate if the changes in outcomes and disparities that we expect are mediated by the choice of post-acute care facility to which a patient is discharged (Aim 4). The overarching rationale for these aims is that in pursuit of financial rewards from the CJR, hospitals are likely to avoid sicker patients, many of whom are likely to be racial and socioeconomic minorities; and hospitals, clinicians, and post-acute care facilities will adopt cost-reduction strategies that may target and adversely influence minority patients, thereby exacerbating disparities. We will conduct rigorous longitudinal analyses using national data to address the specific aims and test associated hypotheses. The knowledge gained from our study will inform the design of current and future bundled payment reforms such that these reforms can prevent the exacerbation of and contribute in reducing existing racial and socioeconomic disparities in hip and knee replacement surgeries."