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 fact, a recent study in the Journal of the American Medical Association Internal Medicine found that in the near 4,000 patients observed that there was a 20.8% decrease in total spending per episode due to the use of a bundled payment model. In the same study, there was also a noted decrease of high-cost post-acute services such as readmissions and emergency department visits.
While the bundled payment model has obvious proven benefits, the alternative payment model also comes with its challenges. The model requires providers to forego the usual fee-for-service process for a more comprehensive, team-based care model. This can present logistical challenges for providers. Namely, providers often struggle with defining how bundles should be structured, especially with the inclusion or exclusion of high-priced services or treatments. Additionally, with several specialists, facilities and other caregivers in the mix, providers sometimes struggle with determining who ultimately is responsible for coordinating care in a team-based approach. Recognizing these challenges in order to overcome them is the first step in smoother processing and better patient outcomes.
Addressing Scale in Bundled Payments for Patient and Provider Success
Like the popular fee-for-service payment model, providers generate the most profit from two avenues: by treating a high volume of patients for the procedure or conditions specified in the bundled payment model, and by providing care across some facilities. Scaling the number of procedures and the number of facilities can be a particular challenge.
While providers can often include an increased number of patients they care for, knowing which patients are appropriate to be included in a bundled payment model is a challenge. High-risk patients who ultimately may require care outside the definitions in the bundle can make scaling difficult and in some cases, cost-ineffective.
To scale up for both patient and facility volume, providers may consider joining an integrated network or health system. When considering scaling for facilities, providers should make sure that any network or system they join operates under the same EHR system and includes a diverse range of specialists. Doing so will not only help you increase profits, but it will also help increase the quality of patient experience. Coordinating care across the facility and referring to easily-accessible specialists and services helps reduce touch points for the patient.
Controlling Costs in Post-Acute Care through Leveraged Partnerships
While the fee-for-service model limits a provider’s financial scope to a single procedure or visit, healthcare bundled payments expands this scope the entire episode of care. The episode’s length is understandably variable — ranging from a couple of days for a hospitalization to 90-days post-discharge or longer, if operating on a condition-based bundle.
With lengthier bundles for conditions having the potential to negatively impact a provider’s revenue-generating ability, healthcare bundled payments pose a definitive risk for financial downfall. To avoid this, providers can leverage post-acute care partnerships with high-value partners in order to increase the quality of care and reduce post-acute care needs outside the scope of the bundle. Consider partnering with facilities to leverage post-acute care resources for a more optimal patient experience and more efficient administrative processing.
Mitigating Risk and Controlling the Cost of Complications Outside the Provider’s Control
There are some pitfalls to bundled payments that providers simply cannot control. For instance, patient compliance with the plan of care or unforeseen complications or side effects to medications may make predicting cost a challenge. It is advisable to then define the bundle to mitigate the risks of unexpected, expensive healthcare events.
Also, avoid bundling payments for complicated medical situations. For example, you may find it difficult to manage healthcare costs for patients who are high risk with additional co-morbidities or for complex surgical procedures. In these cases, bundled payments may be especially undesirable for the provider. By defining the bundle, providers can regain some of their financial power.
Some additional ways to define the healthcare bundled payment include:
- Only bundling payments for procedures and conditions with clearly-defined, evidence-based treatment modalities
- Defining a readmission and excluding high-priced medication and treatments from the bundle
- Creating a plan to manage outlying scenarios
Most experts agree that bundled payments are here to stay. Empowering organizations to provide high-quality care to patients while also increasing revenue and reducing costs is a mainstay of this new model. Understanding the common complaints and pitfalls of the alternative payment model is the first step in understanding how to best leverage bundled payments for your needs and your patient’s needs. In turn, bundled payments can better position providers to see a real change in healthcare cost savings while also increasing their bottom line.