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September 09, 2025
2 min read
Key takeaways:
- Total episode spending in a 90-day episode of care was reduced with a bundled payment model.
- Physicians and hospitals participating in a bundled payment model utilized less institutional postacute care.
Results presented in JAMA Health Forum showed participation in the Bundled Payments for Care Improvement Advanced program reduced health care spending among both physician group practices and hospitals.
“In addition to hospital success in bundled payments, which we have seen, physicians and physician groups can also be successful, potentially by different mechanisms,” Aidan P. Crowley, MD-PhD candidate in health care management and economics at the Wharton School at the University of Pennsylvania, told Healio.
Crowley and colleagues used Medicare claims data for 846,529 beneficiaries who underwent lower-extremity joint replacement between April 2016 and September 2019, and assessed spending, quality and utilization between physician group practices and hospitals participating in the Bundled Payments for Care Improvement Advanced (BPCI-A) program.
“The main outcomes we were looking at were spending and some primary utilization outcomes, including changes in postacute care based on the prior literature of what has been successful in bundled payments,” Crowley said.
Among the patients included in the study, 281,189 patients were treated by physicians in a physician group practice participating in BPCI-A; 69,107 patients were treated by hospitals participating in BPCI-A; 28,309 patients were treated by physicians and hospitals both participating in BPCI-A and 467,924 patients were treated by physicians and hospitals not participating in BPCI-A.
“Treatment by physicians who participated in this bundled payment model was associated with about a $855 reduction in total spending over the 90-day episode,” Crowley said. “Treatment by participating hospitals was also associated with a reduction in spending of around a little over $600.”
The results also showed physicians and hospitals participating in BPCI-A had differentially lower institutional postacute care utilization, with an increase in outpatient visits 7 days postdischarge for physician groups and an increase in home health utilization for hospitals.
Although physician group participation in value-based care payment models has not historically been mandated due to the difficulty of accurately identifying group practices, Crowley said policymakers should take physician groups into consideration when developing new value-based care payment models moving forward.
“As our study showed, [physician groups] are responsible for a huge volume of these episodes of care,” Crowley said. “Making sure that their incentives are engaged and aligned for their success as well is going to be an important part of the development of future models.”
For more information:
Aidan P. Crowley can be contacted at aidan.crowley@pennmedicine.upenn.edu.
Perspective
The study by Aidan P. Crowley, BS, and colleagues highlights important differences in performance across participant types in bundled payments for hip and knee replacement, particularly regarding episode spending and post-acute care utilization. Hospitals participating independently achieved modest cost reductions, primarily through efficiencies in inpatient care, but were less successful in reducing reliance on high-cost post-acute care services. Physician-only groups, by contrast, had greater influence on care coordination decisions, leading to sharper declines in post-acute care utilization and corresponding reductions in overall episode spending. The strongest performance, however, came from physician-hospital partnerships, where institutional infrastructure was combined with physician-led clinical decision-making to yield the most consistent and substantial cost savings.
Importantly, quality outcomes — including complication and readmission rates — were comparable across all participant types, underscoring that the key differentiator was not quality but efficiency. These findings argue strongly for including and empowering physician groups in future value-based payment models. Physician leadership in care transitions and post-acute care planning is critical to controlling costs while maintaining quality, making them indispensable partners in the broader shift toward value-based payment reform.
Kevin J. Bozic, MD, MBA, FACS, FAAOS, FAOA
Chair, department of surgery and perioperative care
Dell Medical School
The University of Texas at Austin
Austin
Disclosures: Bozic reports no relevant financial disclosures.
Sources/Disclosures
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Disclosures:
Crowley reports no relevant financial disclosures. Please see the study for all other authors’ relevant financial disclosures.
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