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Maternity Bundles Improve Quality and Result in $400,000 Employer Savings in Year One

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Rising Maternity Costs Threaten Employee Health & Benefits Plan Sustainability

When Metro Nashville Public Schools (MNPS) noticed an increase in costly neonatal claims among their employees – including an increase in the number of costly C-section surgeries – they wanted to come up with an aggressive intervention. They had existing incentives in place, but those weren’t having the desired effect of reversing the cost increase trends. MNPS began looking for a provider partner who could help them design and build a value-based care reimbursement model for their maternity patients.

"How you pay for care matters. This changes how you deliver care. You throw out all the old payment rules and start with a clean slate, and you design the best patient experience that you can."
C.J. Stimson, MD, JD
Chief Medical Officer for Employee Health Plans at Vanderbilt University Medical Center
Senior Vice President of Value Transformation, Population Health

Designing a VBC Model to Turn the Tide on Unsustainable Fee-for-Service Costs

Vanderbilt Health answered the call, having already embraced bundled payments to shift away from fee-for-service to value-based care. Leaders at Vanderbilt believed bundled payments could correct a healthcare model that relies on misaligned incentives (fee-for-service models that have long dominated the U.S. healthcare system). The two organizations teamed up to create a bundled payment program that encompassed the entire delivery system. Their primary goal was to improve quality, then shift their focus toward reducing costs.

Direct Contracting and Key Partnerships Streamline the Bundles Program

MNPS and Vanderbilt health recognized the importance of effective planning. From the beginning, they worked together to build a collaborative program that facilitated greater access to information, better decision-making, and improved patient care for health plan members. Both organizations also knew that alignment would be important across the entire support system, including the third-party administrator (TPA) and bundled claims administration partner.

Direct Contracting

As a self-insured employer organization, MNPS contracted directly with Vanderbilt Health for value-based bundled payments. MNPS worked with their existing TPA, who agreed to support the efforts and adjudicate the claims. The group then partnered with Cedar Gate Technologies to provide the infrastructure and technology necessary to efficiently administer the bundled payment program.

Building & Designing Bundled Payments

Vanderbilt Health leveraged their expertise to design and build bundled payment definitions. They assumed full financial risk and clinical responsibility which required thorough involvement and understanding of the data. The program is built around multiple touchpoints with patients throughout their system which meant aligning and educating the entire delivery system on ways to drive quality improvement and cost reduction.

Program Operation & Administration

Operating a bundled payment program requires the appropriate people, process, and technology to work efficiently in a system primarily driven by fee-for-service. After analyzing the initial bundles definitions, Cedar Gate recommended tweaks to reduce the complexity. Then Cedar Gate took responsibility for administering the entire bundles process, taking that burden off MNPS, their TPA, and Vanderbilt Health.


Improved Outcomes for Patients, Cost Savings for MNPS

Working together, Metro Nashville Public Schools, Vanderbilt Health, and Cedar Gate created a sustainable bundled payment program. Vanderbilt’s physician champion and bundled payments team brought the financial, value-based care, managed-care contracting, and revenue cycle teams together to improve care quality, reduce costs, and increase patient satisfaction, achieving:

  • $400,000 in total program savings in the first year alone
  • A 12% decline in C-section rates, from 40% to 28% of total deliveries
  • More healthy babies born, and a 16% decrease in NICU spending
  • A Net Promoter Score (NPS) consistently in the 90th percentile from maternity patients

While harder to quantify, the partnership between Vanderbilt Health, MNPS, and Cedar Gate has also led to:

  • Clarity on who pays for what and when, which is one of the biggest barriers for organizations considering prospective bundles payments
  • Sustainable administration that ensures longevity for the bundled payment program
  • A successful step toward more value-based care programs, with Vanderbilt now offering over 10 bundles for things like bariatric surgery, cochlear implants, and knee and hip replacements
  • Better alignment between provider incentives and positive patient care

Go Deeper:

Read the full KLAS Points of Light 2022 Case Study on the Vanderbilt Health and MNPS MyMaternityHealth program


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