Longer-term bundled payments prove beneficial

Medicare bundled payments have become a cornerstone of the Centers for Medicare & Medicaid Services’ (CMS) reimbursement program, in efforts to reduce healthcare costs.

A report in the June 2017 Journal of the American Medical Association finds that expanding the way bundled payments are utilized could lead to similar or better quality for patients, reductions in Medicare payments, higher profits for hospitals, and higher physician compensation. The report offers suggestions for healthcare organization to think outside of the box when it comes to bundled payments.

According to the report, bundled payments are expected to be aligned with population health strategies in three ways:

·      Extending the duration of bundles,

·      Expanding bundled payments beyond hospitals, and

·      Integrating bundled payments with global budget models within accountable care organizations.

Researchers say that bundled payments are a way to address several issues in healthcare organizations, including managing risk and integrating with chronic care and population health strategies.

“Bundled payment models could be combined such that organizations can participate in several individual, clinically distinct bundles simultaneously,” the report’s authors say. “This allows organizations a stepwise transition into financial risk across distinct segments of care before committing to global risk across the continuum of care.”

The difference between bundled payment models and many accountable care models is that the risk is lower because the payment model targets acute and episodic care, says Amol Navatho, MD, assistant professor of health policy and medicine at the Leonard Davis Institute of Health Economics at the University of Pennsylvania, and lead author of the study.

“There are a couple of challenges to the idea of financial accountability for providers. Health systems are good at delivering care, and haven’t had to think about managing risk,” Navatho says. “But that is counterbalanced because this bundled payment model was fairly targeted. There was a defined and narrowed population, so the risk was narrowed.”

Navatho says the ultimate goal in the continued study of bundled payment models is to align them with population health strategies for longer-term health issues. Many bundled payment models focus on acute care, and the model is harder to align with population health initiatives that last a year or longer, Navatho says.

“There’s still a lot of enthusiasm about bundled payments, there are many commercial health systems using them or thinking about using them. Physicians and hospitals can benefit from being innovative in providing high value care, and that benefit feels like a good fit for long term population health strategies,” he says.

The report finds that longer-term bundled payments for chronic or maternity care could use the model for more than just episodic care.