Bundled payments modestly reduced Dutch joint-replacement spending, study finds

A bundled payment program introduced by a Dutch health insurer in 2018 was associated with modestly lower spending per total hip or knee replacement episode during its first two years, according to a difference-in-differences analysis using the insurer’s claims data. For each post-implementation quarter, spending per episode grew by an average of €268 less in participating hospitals than in control hospitals, a 3% reduction.

The study examined 9,960 total hip or knee replacement episodes at 20 hospitals that voluntarily joined the program and 9,147 episodes at 34 control hospitals. It used claims records from 2015 through 2019, covering the period before implementation and the program’s first two years. The primary outcomes were spending per episode and postsurgical complication rates; secondary outcomes included utilization of care activities and the volume of replacement episodes.

Researchers adjusted the analyses for patient characteristics and included hospital and quarter fixed effects. Standard errors were clustered at the hospital level. The difference-in-differences design compared the change after implementation among participating hospitals with the concurrent change among control hospitals, allowing the analysis to assess outcomes relative to what happened in the comparison group rather than relying on a simple post-program comparison.

Under the program, participating hospitals shared in savings and losses for each total hip or knee replacement episode. The bundle covered all related hospital care, including complications occurring within one year after surgery. Hospitals were also permitted to increase the volume of replacements if they met quality targets. The observed spending difference was driven mainly by a decrease in the diagnosis-related group, or DRG, price of the surgery itself, rather than by a documented change in complications or care activity utilization.

The average post-implementation spending estimate was statistically significant at p = 0.039. Most of the €268 quarterly difference was associated with a €240 decrease in the DRG price for total hip or knee replacement surgery. The results therefore support a modest spending reduction during the first two years of the program, but they do not show that hospitals reduced spending by using fewer care activities or by preventing more postsurgical complications.

No significant effect was found on complication rates, for which the reported odds ratio was 1.01 and p = 0.951. The analysis also found no significant effect on care activity utilization per episode. Procedure volume showed a modest increase among participating hospitals, with an odds ratio of 1.09 and p = 0.013. The study does not establish why the number of replacement episodes increased.

The investigators noted that excluding post-acute care activities from the episode likely weakened the incentives for hospitals to reduce spending through improved care utilization. They concluded that policymakers should evaluate whether the scope of a bundled payment program provides sufficient incentives for improving care coordination and utilization before implementation. This is a policy interpretation of the payment design; the study itself found no significant change in care activity utilization during the evaluated period.

The findings are limited to the first two years of the program and to hospitals and claims covered by one Dutch insurer. The voluntary comparison design and available data do not establish whether the same effects would occur in other hospitals, health systems or payment arrangements. In this case, bundled payments were associated with lower spending and slightly higher replacement volume, while complication rates and care activity utilization showed no significant changes. The results describe measured associations rather than proof that the payment model alone produced each outcome.

Subject of Research: Effects of bundled payments on hospital spending and care for total hip or knee replacement in the Netherlands

Article Title: Two-year impact of a bundled payment program for total hip or knee replacement in the Netherlands: a difference-in-differences analysis

Article References: Gigengack, T., Hayen, A., Cattel, D., & Eijkenaar, F. (2026). Two-year impact of a bundled payment program for total hip or knee replacement in the Netherlands: a difference-in-differences analysis. BMC Health Services Research. https://doi.org/10.1186/s12913-026-15417-x

Image Credits: AI Generated

DOI: 10.1186/s12913-026-15417-x

Keywords: bundled payments, total hip replacement, total knee replacement, hospital spending, health care quality, postoperative complications, DRG pricing, Netherlands, health policy, difference-in-differences, Two-year, impact