The Difference between Theory and Practice with CJR “In theory there is no difference between theory and practice. In practice there is.” – Yogi Berra

April 2016

On April 1, 2016 the theory that bundled payments will shift care from volume to value became reality for over 800 hospitals across the country that provide total joint replacement services. Health care providers facing this reality need to remember that as Medicare puts this theory into practice, not everything that a provider should be doing is spelled out in the program. For that reason it is critical to approach the first year of the Comprehensive Joint Replacement (CJR) program as an exercise in developing hands-on knowledge. This requires a commitment to measuring and analyzing cost and quality data beyond that which is required by the program. What strategies should drive this learning? Here are five things you should know.

  • Focus on understanding your own costs but be aware of the performance of others. In year one, don’t be lulled into complacency by the target price that depends on your own historical performance. The target price will shift to one that blends the performance of all participating providers in the census area defined by CMS.
  • Implement communication strategies across providers. A critical way to drive efficiency and to avoid adverse outcomes is to ensure that physicians, hospitals, and post-acute care providers commit to providing clinical information across transitions of care.  CJR covers 90 days post-discharge, so it makes every player along the care pathway a virtual partner. Make sure they are talking to one another.
  • Finalize your Gainsharing Strategy. The more you depend on physicians and post-acute care partners to manage clinical and financial risk, the more you should employ a gainsharing strategy.  In order to determine your optimal allocation to each of your partners you need to understand how much each contributes to quality and cost.
  • Commit to Managing Clinical Risk. Know your patient population and use risk-adjustment to identify true adverse outcomes. Understanding the interaction between length of stay (LOS), emergency department utilization, readmissions, and post-discharge deaths will help your clinicians make better site of service selections.
  • Measure what Matters. Avoid dependence on process measures that are not linked to improved quality or that drive up cost.   Many of the metrics currently measured for compliance and payment are not predictive of adverse events. Hospitals and clinicians must know their own adverse outcome rates (see communication above), how they compare with other providers, and the best methods to reduce complications of care. The best remedy to reduce cost and adverse outcomes is not compliance with process measures—it’s to reduce cost and adverse outcomes.

MPA Healthcare Solutions recognizes that in theory there is no difference between theory and practice, however in practice there is a difference between theory and practice.  We approach CJR from a scientific perspective that provides hospitals and post-acute providers a firm basis upon which to react to this significant shift in payment policy. If you would like assistance for your program—or just have a question—please give us a call.  We’re here to help.

Donald Fry

Donald E. Fry, M.D. is Executive Vice President for Clinical Outcomes Management at MPA Healthcare Solutions, Adjunct Professor of Surgery at Northwestern University, and Professor Emeritus of Surgery at the University of New Mexico School of Medicine. At MPA Healthcare Solutions, Dr. Fry provides clinical leadership in analyzing and evaluating clinical performance, guiding quality improvement, and creating incentives for coordinated, cost-effective care.

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