By Lola Butcher 

Bundled payment and other new payment approaches present patient communication challenges for hospitals, as Hillcrest Medical Center learned during the ACE demonstration project. 

Will a $151 to $1,199 incentive motivate a Medicare patient to choose one hospital over another for a cardiac or orthopedic procedure? It hasn't seemed to make a difference in Hillcrest Medical Center's experience.

The Tulsa, Okla., organization was one of five hospitals and health systems chosen to participate in the Centers for Medicare & Medicaid Services' (CMS's) Acute Care Episode (ACE) demonstration, which piloted a bundled-payment approach. As part of the demonstration, Hillcrest's Medicare fee-for-service patients were eligible for financial incentives for certain cardiac and orthopedic procedures (see the exhibit below).



Hillcrest saw its overall surgery volume increase by more than 25 percent during the three-year initiative. However, the financial incentive does not seem to have been a key driver. To recruit patients to the program, Hillcrest launched a multifaceted communication program that emphasized the high-quality care Hillcrest provides and the cash incentive patients would receive for choosing Hillcrest for specific orthopedic or cardiac care. However, the hospital's research shows that most patients did not consider the incentive in their decisions to go to Hillcrest. In fact, many patients found the financial incentives confusing.

"Patients said the incentive was a nice benefit, but it really was not the market driver that we thought it was going to be," says Nancy Harrison, Ardent's ACE project director. "The incentives didn't influence patient choice."

Through its efforts, Hillcrest leaders gained perspective on what works-and what does not-in communicating to patients about bundled payment.

ACE Goals

In May 2009, Hillcrest, which is owned by Ardent Health Services, became the first hospital to launch the ACE program. The program had five specific goals:

  • Improve coordination and quality of care
  • Align financial incentives between hospitals and physicians
  • Designate selected centers as "Value-Based Care Centers"
  • Provide financial incentives for Medicare beneficiaries to choose those centers
  • Reduce Medicare payments

Unlike some other ACE sites, Hillcrest participated in both the orthopedic and cardiac components of the program. The orthopedic component includes nine diagnostic-related groups (DRGs) primarily related to hip and knee replacement procedures. The cardiac component includes 28 DRGs that fall into five subcategories:

  • Valves
  • Defibrillator implants
  • Coronary artery bypass procedures
  • Pacemaker implants
  • Percutaneous coronary interventions (most of which are stent placements)

During the three-year period, Hillcrest served about 3,100 patients through the ACE program. Of those, about two-thirds were cardiac patients; the rest underwent orthopedic procedures. The demonstration worked out very well for all parties: CMS saved money; Medicare patients who participated in the program received checks totaling about $1 million; and Hillcrest saw its overall surgery volumes increase between 25 percent and 40 percent, depending on the procedure.

"Those are very good numbers that we are pleased with," Harrison says.

It is not clear whether Hillcrest's participation in the ACE demonstration is responsible for the medical center's big growth in surgeries. "It's difficult to link these volumes to ACE," Harrison says. "At the same time we significantly improved collaboration with our surgeons through the ACE program, we also made capital investments, expanded programs, and recruited physicians."

When the demonstration ended April 30, Hillcrest sought-and received-approval from CMS to continue the orthopedic component of the program. Both Hillcrest and Medicare beneficiaries will continue to share the financial savings that Hillcrest creates for the Medicare program. The hospital did not seek to extend the cardiac component. Because Hillcrest employs its cardiac surgeons, the desired integration with cardiology already exists, Harrison says.

Communication Goals, Strategies, and Evaluation

When planning the ACE program, Hillcrest identified several key communication messages to get across to patients:

  • That CMS had designated the medical center as a "value-based care center"
  • That Hillcrest is a leader in improving the efficiency and quality of care to Medicare beneficiaries
  • That Hillcrest has high-quality standards and excellent scores
  • That ACE participants would receive a financial incentive
  • That the incentive check could be used in any way; it did not have to be used to pay medical bills
  • That ACE participants would receive a single bill for the entire episode of care, versus separate hospital and physician bills

Initially, Hillcrest used a wide range of marketing and advertising strategies, including print, radio, and TV advertisements; billboards; direct mail pieces to patients; posters; and brochures placed in physician offices and in display cases throughout the hospital. The hospital also marketed the ACE program at patient seminars. Registration staff, financial counselors, and case managers were trained to talk with patients about the program. "We basically tried all avenues to educate the patient," Harrison says.

Access sample communication pieces from Hillcrest

What Worked-and What Didn't

Hillcrest's ACE liaison, who received all calls from patients inquiring about the program, collected information to help analyze the communication efforts. "Whenever patients called to ask about the program, we asked them first where they heard about it," says Harrison. "We also worked with our patient satisfaction surveyor to add some questions, such as 'How did you hear about the program?' and 'When did you hear about the program?'"

The hospital found that most cardiac and orthopedic patients did not choose Hillcrest because of the ACE opportunity. "Even in our recent survey results, most of them learned about the ACE program when they presented at the hospital for the procedure," says Harrison.

That said, some of Hillcrest's communication efforts have proved more worthwhile than others.

Symptom-based seminars. Hillcrest offers education seminars to patients who are suffering specific symptoms, such as hip or knee pain. These programs are led by a physician who describes various treatment options, such as physical therapy, pharmacological options, and joint replacement surgery for orthopedic patients or stents for certain cardiac diagnoses.

During the seminars, a Hillcrest patient liaison is on hand to educate participants about the benefits of the ACE program. The hospital uses direct-mail marketing to inform Medicare beneficiaries about the seminars.

Physician referral. Hillcrest places ACE brochures in physicians' offices, and some physicians mention the program to patients, says Harrison. However, the program is only available to Medicare fee-for-service patients. Because physicians often do not know if a patient has Medicare fee-for-service or Medicare Advantage, they generally steer clear of discussing the ACE demonstration. "We are careful not to mislead a patient when he or she may not be able to participate in the program," she says.

Print advertisements. "We found our most successful advertising was through some type of print, whether it was published in magazines or newspapers," Harrison says.

Television, radio, and billboard ads. None of these worked well enough to justify the expense. After experimenting with those media in 2009, Hillcrest discontinued their use.

Based on patient feedback, Hillcrest reworked its marketing approach-and cut its advertising budget considerably. In the first year, the hospital spent $312,107, which included launch costs, such as printing brochures that have been used in subsequent years. The marketing budget dropped to $250,313 in year two.

Incentive Issues

Although Hillcrest has not found that the financial incentive influenced patient decision making, the bonus program did generate some extra work for the hospital staff. The incentive checks are issued by CMS, but Hillcrest's ACE patient liaison fields calls when patients are wondering why they have not yet received the checks-or, in many cases, when they can expect to receive their checks.

During the registration process, all patients in the ACE program sign forms acknowledging that they have been informed about their participation in the bundled payment initiative and that they will be issued an incentive check. The checks typically arrive three to six months after the procedure is performed. Harrison says many patients or their family members call Hillcrest to verify that it is a valid check that they can cash.

"It's a confusing concept for the patients to fully grasp," she says. "They had a surgery, there are savings tied to it, and CMS is now going to mail them back checks for the savings that CMS actually earned. That's not normal." 

Lola Butcher is a freelance writer and editor based in Missouri.

Interviewed for this article:

Nancy Harrison is director of the Acute Care Episode project/financial operations, Ardent Health Services, Nashville, Tenn. (  


Publication Date: Tuesday, July 17, 2012