New Study Finds Progress in Bundled Payments Moving from Pilots to Programs

Submitted by hci3-usr on Monday, June 2, 2014 - 10:14

Payers report cost savings and some impact on quality

WASHINGTON — June 3, 2014 — Bundled payment is no longer assigned only to pilot status as a number of public and private payers are committing to this model as a core payment and delivery reform strategy according to the latest research commissioned by the non-profit Health Care Incentives Improvement Institute™, Inc. (HCI3) and conducted by Bailit Health Purchasing, LLC.

While most U.S. health care is fee for service, where physicians and hospitals are rewarded for the number of services or procedures they perform, a bundled model provides a single fixed payment for all providers (hospital, physician, physical therapy, readmissions, etc.) involved in an episode of care such as heart bypass surgery, including all covered treatment services, adjusted for the severity and complexity of a patient's condition.

“There are now hundreds of hospitals and thousands of physicians participating in bundled payment programs across the country,” said Francois de Brantes, HCI3 executive director. “These providers have bundled payment contracts in force and the majority of the contracts have upside and downside risk. We’re now in the scaling phase of this payment model and no longer in pilot or early stage, and that’s a very important finding of this report.”

This is the third in a series of annual studies tracking the development and implementation of bundled payments in the public and private sectors. This report builds upon the two previous issue briefs by providing a more in-depth review of the operational steps health plans and providers are taking to be successful under bundled payment and included interviews with seven payers, seven providers, and one organization selected as a convener.

“We found that these payers are automating what were previously manual, resource-intensive processes and making significant investments to do so,” said Michael Bailit, president of Bailit Health Purchasing and study author. “They’re also simplifying their bundled payment methodologies to make them easier for the payer and contracted providers to administer. We anticipate continued expansion of the scope of these arrangements in terms of participating providers and numbers and types of episodes.”

Bundled Payment Webinar
On Tuesday, June 24 from 11:00 a.m. to 12 p.m. Eastern, HCI3 and Bailit Health Purchasing will host a complimentary webinar examining the key operational steps payers and providers can take for successful implementations of bundled payments as outlined in the issue brief. Additional details and registration information can be found here.

National Bundled Payment Summit
The findings of the issue brief will also be discussed at the upcoming National Bundled Payment Summit in Washington on June 16-18.

About Bailit Health Purchasing, LLC
Bailit Health Purchasing is a health care consulting firm dedicated to working with public agencies and private purchasers to expand coverage and improve health care system performance.

About Health Care Incentives Improvement Institute™, Inc.
The Health Care Incentives Improvement Institute, Inc. (HCI3) is a not-for-profit multi-stakeholder umbrella organization for Bridges to Excellence® and PROMETHEUS Payment®. The mission of the organization is to create significant improvements in the quality and affordability of health care by developing and implementing programs that recognize and reward physicians, hospitals and other health care providers that deliver safe, timely, effective, efficient, equitable and patient-centered care. HCI3 offers a comprehensive package of solutions to employers, health plans and coalitions to improve the flawed incentives that currently permeate the U.S. health care system.

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HCI3 Media Contact:
Cary Conway