Do bundled payments stifle innovation, discriminate against high-risk patients?

Although bundled payments are an increasingly common way for insurers to pay for care--and can improve quality and lower costs--some industry experts worry that they could have more negative consequences than benefits.

One concern is that since bundled payments focus so singularly on costs, they could discourage experimentation of new drugs, devices and procedures, according to a blog post in Health Affairs. The problem, some experts say, is that quality metrics aren't developing at the same rate that insurers and providers are adopting bundled payment programs.

Clear quality care guidelines are important--they helped UPMC Health Plan in Pittsburgh judge the success of its pilot bundled payment program for hip and knee replacement surgeries that launched last year, for example.

Another worry is that bundled payments actually encourage providers to discriminate against high-risk patients since flat fees compel them to treat patients unlikely to experience complications. Or providers could classify patients' conditions as being worse than they really are so they can receive more money from the episode, reported Forbes.

"Bundled payments are just price controls by another name--and, as such, will yield subpar care by encouraging insurers and providers to put their own financial interests above the medical needs of patients," Sally Pipes, president of the Pacific Research Institute, wrote in the Forbes article.

She adds that the many studies on bundled payments aren't showing positive effects of the payment initiative. For example, the Integrated Healthcare Association bundled payment demonstration failed to achieve its original objectives.

Fortunately, there are ways to make both payment reform and innovation thrive simultaneously--if insurers and providers can cooperate and take certain steps. Those include allowing for add-on payments and carve-outs for certain medical therapies and coordinating efforts to improve quality measures that reflect a broader spectrum of outcomes.

To learn more:
- read the Health Affairs blog post
- see the Forbes article

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