Patient Perception of Value in Bundled Payments for Total Joint Arthroplasty

Abstract Background A central concern for providers in a bundled payment model is determining how the bundle is distributed. Prior studies have shown that current reimbursement rates are often not aligned with patients’ values. While willingness to pay (WTP) surveys are perhaps useful in a fee-for-service arrangement to determine overall reimbursement, the percentage of payment distribution might be as or more important in a bundled payment model. Methods All patients undergoing primary total joint arthroplasty (TJA) by a single surgeon were offered participation in a preoperative WTP survey. At a minimum three months postoperatively, patients were mailed instructions for an on-line follow-up survey asking how they would allocate a hypothetical bonus payment. Results From January through December 2014, forty-five patients agreed to participate in the preoperative WTP survey. Twenty patients who were minimum three-months postoperative also completed the follow-up survey. Patients valued total knee and hip replacement at $28,438 (95%CI: $20,551-36,324) and $39,479 (95%CI: $27,848 – $51,112), respectively. At three months postoperatively, patients distributed a hypothetical bonus payment 55.5% to the surgeon (95%CI: 47.8%-63.1%), 38% to the hospital (95%CI: 30.3%-45.7%), and 6.5% (95%CI: -1.2%-14.2%) to the implant manufacturer (p < 0.001). Conclusion The data suggest that TJA patients have vastly different perceptions of payment distributions than what actually exists. In contrast to the findings of this study, the true distribution of payments for an episode of care averages 65% to the hospital, 27% to the implant manufacturer and 8% to the surgeon. While many drivers of payment distribution exist, this study suggests that patients would allocate a larger proportion of a bundled payment to surgeons than is currently disbursed. This finding may also provide a plausible explanation for patients’ consistent overestimation of surgeon reimbursements.