Bundled payments are becoming all the more popular and with good reason. Also known as the episodic payment model or package payments, bundled payments are great for patients, health insurance companies, and healthcare providers alike. Such all-around wins are hard to find, but bundled payments are a perfect example of such.
Healthcare bundled payments is a payment model that addresses reimbursement between payers and providers per episode of care rather than for a particular medical service, like the ever-popular fee-for-service model. The goal of using this particular payment method is to transition healthcare providers from a fee-for-service model to a value-based medical care model. This reduces some of the financial strain for both patients and providers and helps elevate the quality of care that patients receive.
Healthcare bundled payments are part of the debate over healthcare reform in the United States. It’s a popular alternative payment model that providers can take advantage of today to provide an increase in quality of care and healthcare cost savings.
In the new era of healthcare reform, providers and payers must manage a delicate balance between financial responsibility and increasing positive patient outcomes. The shift towards a value-based care model is a reflection of this movement. Standing somewhat in opposition to value-based care is the fee-for-service reimbursement model, which is often criticized for allowing for overtreatment and misuse of resources.
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.
Uncertainty in the healthcare industry, market changes, and complicated legislation make it difficult for companies and providers to offer stellar health insurance plans. Amidst this uncertainty, medical care providers need to put together offers that will attract these new consumers that are looking for affordable and reliable healthcare.
Until recently, employers had to navigate through numerous insurance plans to find one that would cover their employees and work within the company budget. A critical issue with this method is that each procedure or visit was billed separately, resulting in a catastrophic bill. The fear is that employees would not deem the coverage valuable because they are still required to pay out of pocket, even after the employer paid the initial cost of the procedures.
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.
There’s a lot of confusion around bundled payment models.
For health services providers, bundled payment programs are a unique way to attempt to develop a more efficient system of providing services for each episode. Essentially, providers agree to take on more patients and are betting on their capabilities to treat their patients effectively to earn additional income.