What’s causing mixed results in bundled payment programs?
A number of disparate but equally plausible factors explain the wide variation in success under different bundled payment programs. First, healthcare is local, and not one methodology can account for the nuances of every regional network. For example, wide variation exists between urban and rural hospitals in terms of patient social determinants of health (SDOH), usage, provider size, and level of integration and spending.
Additionally, many providers may be hesitant to embrace bundled payments due to past negative experiences with other alternative payment models. For example, providers in geographic areas that have had a high amount of managed care penetration, entered into non-risk adjusted capitation or pay-for-performance agreements, may have had difficulties and, therefore, could be slow adopters. We need to provide these users with increased data transparency, episode-based analytics and actionable insights that elevate the trust that they understand the agreements, risks and opportunities on a timelier basis as they move forward into an outcomes-based environment.
Further, many contracts around quality improvement over the past decade have created a higher burden on smaller physician offices. Solo and small practice models may not fit well into alternative payment model contracts, due to the staff having less training with complex healthcare contracts and higher turnover rates in the back office. For these practices, managing data and contracts around alternative payment models could require significant investment in retooling IT staff and software.
Finally, multiple bundled payment model definitions continue to plague the marketplace. Lack of standardized episode definitions and quality metrics lead to eroded trust and limited transparency. Episode definitions need to be developed in collaboration with physician groups and societies so they can have buy-in as coding changes, procedures evolve, and technology improves. In addition, these definitions must be separated from the business of healthcare and transparent to stakeholders so quality measures and analysis can be used to refine and improve them over time.
Once united around transparency and standardized episodes, bundled payment programs will be poised to fulfill the promise they’ve shown in early pilot programs.
Matthew Beatty is the director of analytics at Payformance Solutions, a leading provider of value-based reimbursement solutions and services. Kevin Mehta serves as chief technology officer.