A Novel Value-Based Procurement Agreement to Improve Outcomes for Patients Undergoing Knee Replacement

The fundamental goal of value-based health care is to improve patient outcomes and reduce the cost of achieving these outcomes. New types of agreements have been introduced to improve how organizations collaborate in the health care value chain to improve outcomes for patients. Although most of the attention has been on how the payers of care should pay hospitals, clinics, and other care facilities to improve value for patients, this research focuses on the payment of hospital suppliers. The authors illustrate how Vejle Hospital in the Region of Southern Denmark has been able to create a new relationship with its supplier of primary total knee replacement implants to improve patient outcomes without affecting the regional budget. Primary total knee replacement implants are a strategic product for the region because they are expensive to procure, and improving patient outcomes of primary total knee replacement is a regional priority. The agreement focuses only on patients undergoing primary total knee replacements to increase the control that the supplier has on the final outcomes of its products. (The supplier could be the device manufacturer or a dealer of such products; in this case, dealers did not submit bids.) The authors provide details on the execution of this contract, which compensates suppliers based on the outcomes that patients achieve. In this agreement, patient-reported outcome measures (PROMs), including functional lift and experience metrics, serve as proxies for patient satisfaction, and clinically reported outcome measures, including length of stay, readmission rates, and revision rates, define whether the supplier receives a 17% bonus or a 17% penalty on the final price of the product. From a starting price of €836, this ranges from approximately €694 (–17% price) to €978 (17% price). Outcome aggregate data are used to illustrate how the agreement has affected the quality of care. Overall, a preliminary analysis of the initial stages of the implementation of this contract (from September 1, 2018, to December 31, 2021) suggests that this new type of agreement has a positive impact on key patient outcomes. A PROM questionnaire was shared via email with every patient 1 year after the procedure. Compared with baseline (from January 1, 2013, to December 31, 2015), device-related readmission rates had a statistically significant decrease, declining from 14 (2.4%) of 577 to 8 (1.2%) of 645 in 2021, and patients reported outcomes that serve as a proxy for overall satisfaction 1 year after surgery, with a statistically significant increase, rising from 163 (96%) of 170 to 455 (97%) of 469.