Striving for better quality and more predictable costs, Medicare on Monday launched a major payment change for hip and knee replacements, the most common inpatient surgery for its 55 million beneficiaries. Starting April 1, hospitals in 67 metropolitan areas — from Akron, Ohio, to Wichita, Kansas — will be held responsible for the results of hip and knee replacements. The aim is better coordination that starts with the surgery itself, and continues through recovery and rehabilitation.
For the Obama administration, it’s part of a turn away from paying for a piecemeal approach to care, regardless of results. The new direction aims to foster accountability among hospitals, doctors, nursing homes and home health agencies. It mirrors shifts occurring in employer-sponsored insurance and has support, in principle, from lawmakers of both parties. Under the new system, hospitals can receive additional financial rewards by meeting certain targets for quality and overall costs. If they fall short, eventually they will be financially liable. Medicare recipients will still be able to pick doctors and hospitals for their surgeries.