Performance of Physician Groups and Hospitals Participating in Bundled Payments Among Medicare Beneficiaries

Abstract

ImportanceHospital participation in bundled payment initiatives has been associated with financial savings and stable quality of care. However, how physician group practices (PGPs) perform in bundled payments compared with hospitals remains unknown.ObjectivesTo evaluate the association of PGP participation in the Bundled Payments for Care Improvement (BPCI) initiative with episode outcomes and to compare these with outcomes for participating hospitals.Design, Settings, and ParticipantsThis cohort study with a difference-in-differences analysis used 2011 to 2018 Medicare claims data to compare the association of BPCI participation with episode outcomes for PGPs vs hospitals providing medical and surgical care to Medicare beneficiaries. Data analyses were conducted from January 1, 2020, to May 31, 2022.ExposuresHospitalization for any of the 10 highest-volume episodes (5 medical and 5 surgical) included in the BPCI initiative for Medicare patients of participating PGPs and hospitals.Main Outcomes and MeasuresThe primary outcome was 90-day total episode spending. Secondary outcomes were 90-day readmissions and mortality.ResultsThe total sample comprised data from 1 288 781 Medicare beneficiaries, of whom 696 710 (mean [SD] age, 76.2 [10.8] years; 432 429 [59.7%] women; 619 655 [85.5%] White individuals) received care through 379 BPCI-participating hospitals and 1441 propensity-matched non−BPCI-participating hospitals, and 592 071 (mean [SD] age, 75.4 [10.9] years; 527 574 [86.6%] women; 360 835 [59.3%] White individuals) received care from 6405 physicians in BPCI-participating PGPs and 24 758 propensity-matched physicians in non−BPCI-participating PGPs. For PGPs, BPCI participation was associated with greater reductions in episode spending for surgical (difference, –$1368; 95% CI, –$1648 to –$1088) but not for medical episodes (difference, –$101; 95% CI, –$410 to $206). Hospital participation in BPCI was associated with greater reductions in episode spending for both surgical (–$1010; 95% CI, –$1345 to –$675) and medical (–$763; 95% CI, –$1139 to –$386) episodes.Conclusions and RelevanceThis cohort study and difference-in-differences analysis of PGPs and hospital participation in BPCI found that bundled payments were associated with cost savings for surgical episodes for PGPs, and savings for both surgical and medical episodes for hospitals. Policy makers should consider the comparative performance of participant types when designing and evaluating bundled payment models.