Bundling payments is one solution to high healthcare costs

For various reasons, including trying to stay afloat financially despite lower reimbursement rates [1], doctors often times will increase the volume of visits and procedures for patients, leading to more revenue. Dr. Manoj Jain, an infectious-disease specialist in Memphis admits to doing as much himself, but calls the system--in which insurance companies and Medicare each pay for every visit or procedure--flawed and in need of a fix. The remedy, he believes, could be bundling. 

Jain writes, in the Washington Post, that despite the unpopularity among doctors of bundling payments--many see it as another form of capitation [2], while others feel that under such a system, doctors will have more incentive to look out for the hospital's bottom line--pilot programs have shown that such a system can, in fact, work. He suggests that instead of having doctors charge for every visit or procedure, physicians and hospitals should create contracts for particular treatments, such as an appendectomy, that would "stipulate the fees each would receive for specific procedures." Current bundling systems do not include physician charges. 

Jain adds that unlike capitation, doctors and hospitals should be paid at the end of treatment, rather than prior to. He points out that the pilots, conducted from 1992 to 1996 for heart bypass surgery patients, resulted in Medicare savings that were 10 percent higher than expected, as well as increased patient satisfaction. 

"I believe the best way to have doctors and hospitals work efficiently together is to pay them together," Jain writes. "Bundled payments would almost certainly limit my income and, more important, reduce my autonomy. But healthcare should be about patients, not how doctors want to be paid," he added.

To learn more:
- read Jain's full commentary [3] in the Washington Post

Related Articles:
Could capitation be the hot new payment trend? [4]
Mass. moving ahead with bundled payment model [5]
CMS plans demo of bundled hospital-physician payments [6]