title: Medicare's Acute Care Episode Demonstration: Effects of Bundled Payments on Costs and Quality of Surgical Care.
abstract: To evaluate whether participation in Medicare's Acute Care Episode (ACE) Demonstration Program-an early, small, voluntary episode-based payment program-was associated with a change in expenditures or quality of care.
  
  
  
  Medicare claims for patients who underwent cardiac or orthopedic surgery from 2007 to 2012 at ACE or control hospitals.
  
  
  
  We used a difference-in-differences approach, matching on baseline and pre-enrollment volume, risk-adjusted Medicare payments, and clinical outcomes to identify controls.
  
  
  
  Participation in the ACE Demonstration was not significantly associated with 30-day Medicare payments (for orthopedic surgery: -$358 with 95 percent CI: -$894, +$178; for cardiac surgery: +$514 with 95 percent CI: -$1,517, +$2,545), or 30-day mortality (for orthopedic surgery: -0.10 with 95 percent CI: -0.50, 0.31; for cardiac surgery: -0.27 with 95 percent CI: -1.25, 0.72). Program participation was associated with a decrease in total 30-day post-acute care payments (for cardiac surgery: -$718; 95 percent CI: -$1,431, -$6; and for orthopedic surgery: -$591; 95 percent CI: $-$1,161, -$22).
  
  
  
  Participation in Medicare's ACE Demonstration Program was not associated with a change in 30-day episode-based Medicare payments or 30-day mortality for cardiac or orthopedic surgery, but it was associated with lower total 30-day post-acute care payments.
authors.affiliation: Division of General Medicine, University of Michigan, North Campus Research Complex, Ann Arbor, MI.|VA Ann Arbor Healthcare System, Ann Arbor, MI.|Center for Healthcare Outcomes & Policy, University of Michigan, Ann Arbor, MI.|Institute for Healthcare Policy and Innovation, University of Michigan, Ann Arbor, MI.
authors.forename: Lena M
authors.initials: LM
authors.lastname: Chen
authors.affiliation: Center for Healthcare Outcomes & Policy, University of Michigan, Ann Arbor, MI.|Institute for Healthcare Policy and Innovation, University of Michigan, Ann Arbor, MI.|Department of Health Management and Policy, University of Michigan School of Public Health, Ann Arbor, MI.
authors.forename: Andrew M
authors.initials: AM
authors.lastname: Ryan
authors.affiliation: Center for Healthcare Outcomes & Policy, University of Michigan, Ann Arbor, MI.|Department of Surgery, University of Michigan, Ann Arbor, MI.
authors.forename: Terry
authors.initials: T
authors.lastname: Shih
authors.affiliation: Center for Healthcare Outcomes & Policy, University of Michigan, Ann Arbor, MI.|Department of Surgery, University of Michigan, Ann Arbor, MI.
authors.forename: Jyothi R
authors.initials: JR
authors.lastname: Thumma
authors.affiliation: Center for Healthcare Outcomes & Policy, University of Michigan, Ann Arbor, MI.|Institute for Healthcare Policy and Innovation, University of Michigan, Ann Arbor, MI.|Department of Surgery, University of Michigan, Ann Arbor, MI.
authors.forename: Justin B
authors.initials: JB
authors.lastname: Dimick
mesh_terms: D006348:Cardiac Surgical Procedures / Q000191:economics / Q000706:statistics & numerical data; D017050:Episode of Care; D006739:Hospital Administration / Q000191:economics / Q000706:statistics & numerical data*; D006801:Humans; D006278:Medicare / Q000706:statistics & numerical data*; D019637:Orthopedic Procedures / Q000191:economics / Q000706:statistics & numerical data; D010359:Patient Readmission / Q000706:statistics & numerical data; D011787:Quality of Health Care / Q000706:statistics & numerical data*; D012051:Reimbursement Mechanisms; D019467:Subacute Care / Q000191:economics / Q000706:statistics & numerical data; D013514:Surgical Procedures, Operative / Q000191:economics / Q000706:statistics & numerical data*; D014481:United States
keywords: Program evaluation; health policy/politics/law/regulation; surgery