HMFA ANI 15: How bundled payments can standardize care quality

Alternative payment models such as bundled payments could help create more consistent healthcare quality standards, Michael Chernew, Ph.D., a professor in healthcare policy at Harvard Medical School said at the Healthcare Financial Management's (HFMA) annual meeting in Orlando, Florida.

The fee-for-service payment model is largely to blame for widespread variability in care quality, Chernew said, but bundled payments and accountable care will both lower costs and make care standards more uniform. One major misconception about care quality is the idea that it varies by geography or socioeconomic status, Chernew said. "That's not borne out by the evidence, and is a misguided reading," he said.

Alternative payment models will boost performance and profit margins for both providers and payers due to three key aspects, according to Chernew:

Risk-sharing: For programs that divide financial risk between providers and payers to work, they must use metrics that accurately gauge care quality and patient satisfaction. Experts have said provider mistrust of payers is a "huge hurdle" in the transition to shared risk, FierceHealthPayer previously reported.

Data-sharing: With access to providers' data, payers can help them find opportunities for savings. Striking a balance between data-sharing and patient privacy has been a major concern among healthcare leaders, FierceHealthIT previously reported.

Quality measures: Any new revenue models must incorporate measures of clinical outcomes and patient satisfaction. Patient satisfaction in particular has dropped in recent years even as the healthcare industry steps up its efforts.

Despite Chernew's remarks, a March report from the Lewin Group found the effectiveness of bundled payments is hard to determine. Researchers found little variation in care quality between bundled and non-payment groups, with readmission and emergency room visit rates higher among bundled payment groups in some cases.

To learn more:
- read the HFMA announcement