Many healthcare providers are now looking to implement bundled payment strategies. Bundled payments are often seen as middle ground between fee-for-service and the outcome based models that are now shaking up the healthcare industry. Many healthcare organizations not ready to make the full leap into outcome-driven models are turning to bundled payment strategies as an alternate solution.
So, what is a bundled payment strategy anyway? Bundled payments are also referred to as “episode” or “episodic” payments. Another, perhaps more familiar term, is “package” payment. Patients can buy a “package” of healthcare services. When you buy in bulk, you can save money. Bundled payments offer on a similar philosophy; you buy a “package” of services or goods, covering the entire episode of care, from consultation to physical therapy.
For the purchaser, this can reduce cost. For the seller, bundled payments can normalize revenues and even increase the money flowing in. As a result, patients can receive the high-quality services they require for a lower price. Hospitals, suppliers, and even individual doctors can receive steadier revenues.
For example, bundled payments can work great for knee surgery. A patient who requires knee surgery will need more care than just the surgery. The patient will have a consultation regarding the surgery, as well as physical therapy after the surgery. Instead of purchasing each individual treatment, the patient can buy a “bundle”, or package of service for the knee surgery. The bundle lowers the overall cost for the patient while ensuring more reliable and predictable payments for the healthcare providers.
Bundled payments and episodic treatment are not new. They have been around for years. However, recent healthcare reform efforts, rising healthcare costs, and more competitive markets have various other factors which have made bundled payments more popular. In this quick guide, we will outline four ways healthcare providers can jump-start their efforts to shift to bundled payments.
1. Unlock Your Claims Data
In order to move towards an effective bundled payment system, you first have to get a solid grip on your current situation. This means knowing the ins and outs of your claims data and other relevant data. Data can be used to inform yourself of your organization’s current situation including revenue, patient volume, potential services to bundle, etc.
Once you get a good grip on your data, you need to start developing key metrics. For example, identifying the actual costs of an episode of treatment is vital for knowing how much you should charge patients.
2. Take Data Analytics Seriously
Various other key indicators and stats can and should be compiled. First, determine your goals, then what you need to achieve those goals. Next, figure out ways to measure and track performance. In order to accomplish all of this, you will need to set up a full-scale claims analytics program.
Analytics digs deeper than “just” compiling and understanding your data. You have to look for opportunities. You have use data to inform your entire strategy. By reviewing claims data, cost data and other critical pieces of information, you will be able to build an episode-based analytics lens.
Once this analytics lens is in place, you’ll be able to identify bundle models that will allow you to provide episodic treatment. This will enable you to provide savings to patients, while also stabilizing your revenues. You’ll have to understand each general episode, the procedures needed, and the costs regarding both money and time.
Once these models are in place, you will be able to take your analytics even further. You will be able to define quality objectives. You will be able to calculate and pursue savings targets as well. You will also be able to determine these goals and present them to your patients.
Finally, you will have to define budgets for your bundle payments. On the patient’s end, they will get what they pay for. On your end, it’s essential first to know and understand budgets so that you can then make sure that you are charging enough to be profitable.
3. Build a Transparent Service and Pricing Model for Your Provider Network
If you want to build a bundled payment model successfully, you will need to work together with insurance and payment providers as well as other healthcare providers. Often, episodic treatment will require several healthcare practitioners to provide their expertise. This means you’ll have to take them into account and build them into your pricing models.
When it comes to working with partners, being transparent goes a long way. By being transparent, you will be able to build trusting relationships with your partners. Given all of the treatments and services that can go into episodic treatment, transparency can make a huge difference.
When it comes to insurance companies and other payment parties, transparency will encourage them to work with you. Insurance companies need to know that they are getting a good deal and that their patients are getting proper healthcare. Transparency will make it easier for them to determine such.
4. Make Your Bundled Payment Strategies Operational
For bundled payments, you should streamline the speed-to-market of episodic treatment plans.The quicker you can get to the market, the sooner you can start saving money.
Further, technology should be used to monitor and audit your bundled payments and episodic treatment continuously. This way, you can continue to optimize your efforts, thereby lowering costs and delivering higher quality service.
Bundled payments and episodic treatment are a boon for patients, payers, and providers alike. However, in order to maximize results, you must approach your efforts with honed strategies. This means doing a lot of data crunching, taking advantage of every technological opportunity you can uncover and seek out experts in the field of bundling to help make the transition as seamless as possible for your facility.