Hospitals participating in the Centers for Medicare & Medicaid Innovation’s Bundled Payments for Care Improvement (BPCI) Initiative had a 47% dropout rate after 2 years, according to a study published in JAMA. Differences between participants and nonparticipants and the high dropout rate suggest that voluntary alternative payment models may not improve healthcare quality or reduce costs.

Investigators assessed the BPCI 2-payment model, which includes inpatient and post-acute care. Specifically, the researchers examined quarterly public Medicare data to determine participating status and number of dropouts during the hospitals’ enrollment period (January 2014 through January 2017).

A total of 422 hospitals were participating in the BPCI payment model 2 in January 2017, which comprised 12.0% of 3523 hospitals eligible for the initiative. Participating hospitals signed up for an average of 7.2 conditions, or 3042 hospital-condition pairs. Hospitals participating in the payment program were typically urban (99.1%), nonprofit (80.8%), teaching hospitals (50.5%), and had a greater number of beds.

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During the study period, 88 hospitals fully dropped out of the BPCI, 150 dropped out for ≥1 condition, and 184 continued with the initiative. A total of 1387 hospital-condition pairs also dropped out during the period, ranging by condition from 24% to 83%. Rates of hospital-condition pair dropouts climbed at 6, 12, 18, and 24 months following enrollment (11.4%, 28.4%, 39.9%, and 47.0%, respectively).

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For hospital-condition pairs, for-profit hospitals demonstrated the highest unadjusted dropout rate at 58.3% (adjusted odds ratio [OR], 2.17; 95% CI, 0.58-8.19), followed by nonprofit hospitals at 42.5% (OR, 1.15; 95% CI, 0.32-4.16) and public hospitals at 39.1% (reference group, P =.02). In addition, centers with higher operating margins demonstrated lower odds of dropout during the enrollment period.

In this study, investigators only evaluated participating hospitals, which limits the analysis. This study also did not look at program performance, limiting the ability to determine the program’s effectiveness or potential benefit for participants.

The high dropout rate observed in certain hospital participants may “suggest that voluntary models may not have as much potential as hoped to improve quality and reduce costs across the diverse US healthcare landscape.”


Joynt Maddox KE, Orav EJ, Zheng J, Epstein AM. Participation and dropout in the bundled payments for care improvement initiative. JAMA. 2018;319(2):191-193.