Bundled payment success requires careful administration

Money
Money.

An overview of bundled payments by the president of the Commonwealth Fund suggests that while they hold promise for controlling healthcare costs, they are still far from being a universal cost-control measure.

Commonwealth President David Blumenthal, M.D., and Commonwealth Senior Researcher David Squires noted that bundled payments can give providers incentives to keep their healthcare costs down, but it's difficult to identify modes of care that the model can best address.

Knee and hip replacements are well-suited to bundles because they often involve comparatively young patients who are physically active (often the source of their joint damage) and want to remain so,” they wrote. “But when patients have multiple chronic conditions that interact with each other, it becomes less clear whether the bundle should include the costs of caring for all those problems.”

Those uncertainties have been borne out in uneven results. A study published earlier this year by the Kaiser Family Foundation concluded that bundled payments only were effective in cutting costs in some settings, such as in the hospital, but not necessarily after a patient's discharge.

But as FierceHealthPayer previously reported, Francois de Brantes, executive director of the Health Care Incentives Improvement Institute, believes that bundled payments can ultimately be successful in many settings, can cover up to two-thirds of the total cost of delivering care, and any financial complexities of administering bundles can be easily controlled with appropriate computer software.

“The ideal solution may be to encourage and support the use of bundles within ACOs and other risk-bearing organizations that assume broad responsibility for their patients’ health,” Blumenthal and Squires write. They cite the ProvenCare initiative of Geisinger Health, which essentially warrantied coronary artery bypass graft surgery, as a good model.

“If ACOs increase the number of provider organizations with financial incentives like Geisinger’s, bundled payments may spread rapidly on their own--and without many of the current drawbacks,” they concluded.