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1.
Bundled payments were designed by the innovation center within the Medicare and Medicaid offices to "align incentives for providers and allowing them to work closely together across all specialties and settings" (CMS, 2019.) So, it is also crucial to understand that the four models were created:
- Model one: impatient stay in the acute care hospital. Medicare is responsible for paying a discounted amount to hospitals, as well as a separate payment to physicians through the Medicare Physician Fee Schedule.
- Model two: impatient stay in an acute care hospital plus all post-acute care for up to 90 days after being discharged.
- Model three: begins at the post-acute care services with home health, skilled nursing facilities, and rehab centers.
- Model four: CMS make the bundle pay to the hospital for all services provided by the hospital and other practitioners during the inpatient stay
The impact on health care cost can be more significant than expected because if providers cannot reduce the number of procedures, the price will be higher and Medicare might not pay it, and the hospital will absorb part of the patient debt. Another consideration the hospital has to have in mind is the standardization of care processes, allowing comfortable continuity of care and promoting better multidisciplinary discipline to be aligned. It is encouraged to based bundles on historical cost data provided by Medicare. According to Rob Lazerow, "hospitals and health systems must develop effective gainsharing models to drive the physician performance improvement" (Lazerow, 2011.)
Thanks
References
CMS. (n.d.). Bundled Payments for Care Improvement (BPCI) Initiative: General Information. Retrieved from https://innovation.cms.gov/initiatives/bundled-payments/
Lazerow, R. (2011, October 10). Top 10 Questions about the Bundled Payments for Care Improvement Initiative. Retrieved from https://www.advisory.com/research/health-care-advisory-board/blogs/toward-accountable-payment/2011/10/top-10-questions-about-the-bundled-payments-for-care-improvement-initiative#5
2
The pilot program known as the Bundled Payments for Care Improvement (BPCO) initiative was created by Medicare and Medicaid Innovation (Innovation center) to diminish funds that are dispersed through these programs for health care services. Per the website Bundled Payments for Care Improvement (BPCI) Initiative: General Information, “Traditionally, Medicare makes separate payments to providers for each of the individual services they furnish to beneficiaries for a single illness or course of treatment (BPCI 2019).” Because it may be more difficult to keep track of all the health services that an individual need, it is easier for there to be one total payment that Medicare and Medicaid pay into.
Our classroom textbook Essentials of Health Care Finance (8th Edition) written by William Cleverley and James Cleverly illustrates the example of how bundling would be appropriate for individuals receiving Medicare and Medicaid, “For example, if a patient has knee replacement surgery, rather than making one payment to the hospital, a second payment to the surgeon, and a third payment to the anesthesiologist, the payer would combine these payments for the specific episode of care (i.e., knee replacement surgery) (Cleverley 2018).” The hope is that bundling would be most cost effective for companies to pay into rather than having to pay each portion of the health service separately.
Cleverley, W. O., & Cleverley, J. O. (2018). Essentials of health care finance. Burlington, MA: Jones & Bartlett Learning.
Bundled Payments for Care Improvement (BPCI) Initiative: General Information. (n.d.). Retrieved from https://innovation.cms.gov/initiatives/bundled-payments/
3.
Bundling is essentially Medicare moving away from the traditional fee for service. In the fee for service situation, the health providers were reimbursed for services such as, medications, rehabilitation services, tests and devices. Bundled payment plans are a newer model that instead, receive one payment per episode, or let's take heart conditions where Medicare enrollees receiving services such as; coronary artery bypass grafting, (CAGB) the provider would receive a bundled payment and the patient would be covered under this bundle for 90 days after which reduces the chance of readmission or problems resulting in recovery and any confusion on the patients part on restrictions etc. because the patient would be covered under the same cost for that 90 days the outcome and quality of care would potentially be greatly improved. (Innovations in hospital payment models: the pros and cons of bundled payments | Institute for Healthcare Policy & Innovation)
One con that some have pointed out is that there is no way to foresee services such as rehab and post-acute care are unwarranted, or whether readmission was unavoidable. This leaves an obvious concern of there being some waste in the system of bundling. One good outcome though, is that it is beneficial for hospitals to be motivated to coordinate with other providers that are also involved in the care of the patient. Medicare puts pressure on the hospitals because they believe that they have the greatest influence on the outcome of occurrences and this is another flaw, because this is not always true!
Each patient is unique, and along with this comes many complexities such as socioeconomic status, age, individual health over-all and more. All of this means variations in services, and I am personally not convinced that bundling is the answer, or the solution.
And finally, my analysis outcomes are: It simplifies things, patients can understand the bill, patients can take this straight forward solution and budget as well as compare providers. Better quality of care, providers benefit by working together, they know in advance the spending amount.
Negatives: It is a bit of a risk to providers. Patient compliance and effective service is critical. Care coordination is crucial if all parties are to succeed financially. Surgery payments are clear and concise so while bundling might work well with surgery, not all procedures are so cut and dry. (Pros and Cons of Various Payment Models and their Effect on Practices)
References:
Innovations in hospital payment models: The pros and cons of bundled payments | Institute for Healthcare Policy & Innovation. (n.d.). Retrieved June 08, 2019, from https://ihpi.umich.edu/news/innovations-hospital-payment-models-pros-cons-bundled-payments
