In recent years bundled payments have been gaining traction as an efficient solution for reducing healthcare costs. The United States spends a considerable amount of its GDP on healthcare, and yet our healthcare is nowhere near the best in the world.
According to a 2016 study by McKesson and ORC International, bundled payments are predicted to grow by 6% over the next five years. This makes them the fastest growing payment model within health plans. While both payers and providers expect to see at least 15% of medical payments coming from the bundled model, less than half of them show a readiness to implement bundles.
Bundled payments can be a bit difficult to understand. When payers and providers consider adopting this reimbursement method, they encounter several challenges standing in their way to benefit from this alternative payment plan.
That’s where reviewing and analyzing pricing trends can come in handy. These trends reveal important factors of these challenges that can make easier to deal with.
Facing the Obstacles of Bundled Payments
Bundled payment contracts have proven to be quite effective in lowering costs, reducing unnecessary or extra services and improving the overall management of the payment system. However, adopting a bundled payment system comes with a series of obstacles that providers must be aware of and prepare for in advance.
One of the most common issues is the undefined nature of bundled packages. Providers must identify what treatments and care episodes they are able and willing to bundle based on the needs and current situation of their facility. The easiest way to start is by choosing the procedures that are highly standardized and that present as few risks as possible. Additionally, it is advisable to limit the inclusion criteria of bundled payments and stick to patients within a certain age range and that do not present any abnormal conditions.
Another issue providers need to be aware of are payment rates. Providers need to do their due diligence before defining these standards and entering into agreements with payers. They also need to research treatments and care episodes.
It should go without saying that providers must be up to date with the account history of their facility, other facilities in the country, as well as facilities that have already tested and implemented bundling payments. That will help them assess their current situation as well as identify any areas that need improvement.
Patient costs also present some challenges when adopting bundling models. For example, doctors and specialists may find it difficult to control the patient’s lifestyle and to correct certain negative health behaviors and habits which can stand in the way of the treatment by increasing its length or canceling out its benefits. High-risk conditions and other complications are also challenging to control.
The Three Basic Principles of Bundled Payments
Providers and payers can quickly agree on and set up bundled payment models that have great results as long as they keep in mind three basic principles.
1. Appropriately reimburse for services and technologies used in a care episode
2. Reimburse in a reasonable time frame
3. Dynamic adjustment to innovations and market conditions
Trial Conditions in Bundled Payment Systems
A lot of providers still see bundled payments as a complicated financial regulatory measure. That’s more reason to experiment with as many different situations as possible. That way, it can be easier to understand how bundled payments work and how different pricing trends affect their performance.
Constantly evaluating their performance and adjusting to diverse circumstances will help design effective policies and models.
Pricing Trends that Influence Bundled Payment Models
While bundled payments distance themselves from fee-for-service payments, ignoring the financial system that has dominated health care for so long is not the best strategy to employ. In your shift towards bundled payment models, you will face challenges, some more complex than others. The best way to approach these roadblocks is to research and analyze pricing trends for each particular service.
Moreover, it is advisable that providers seek out and identify any opportunity that allows them to improve or quantify their savings. That approach will make it easier for them to reach the financial goals they set out. Providers should also take fewer risks at the beginning of implementing bundled payments to reduce some of the financial pressure of the transition to this reimbursement method. That way, they can ensure that the focus is set on quality rather than quantity or speed of implementation.
Healthcare is slowly starting to move in the right direction. But, as with all major transitions, it will take time before everything is settled and sorted out. Right now, there are still many barriers to overcome, but as long as everyone approaches it with baby steps and patience, bundled payments are sure to become a major factor in the evolution of healthcare.