Healthcare Matters

As we wrote about last week, patient-centered medical homes and other accountable care-based delivery systems are already being developed and operated successfully under a variety of sanctioned “pilot” programs. There’s a remarkable amount of progress being made, despite the fact that the compensation models, including bundled payment schemes, have yet to be finalized and implemented. Let’s hope the momentum being created by the “pioneers” is not squandered by the bureaucrats. 

Wes Champion is senior vice president of Performance Partners for the Premier healthcare alliance and he wrote the following:

Last year, the Department of Health and Human Services announced a “bundled” payment program that would allow providers to bid as a team for fixed price reimbursement for common treatments, including those that require pre- and post-hospital care such as heart surgery or hip and knee replacements.

Paying for care in its entirety, rather than having providers all bill insurance companies separately, has advantages that directly benefit patients. For one, paying a fixed price for physician payment, nursing care, surgery and medications motivates providers to collaborate to ensure the best outcomes – if any link in the chain fails, that adds to the cost and providers will have to dip into their own pockets to fix it. In the case of Geisinger Health System, these financial incentives led to dramatic improvements in quality, including a 21 percent reduction in complications, a 25 percent reduction in surgical infections and a 44 percent drop in re-admissions.

Similarly, paying a fixed price has been shown to lower costs. A Medicare heart bypass surgery bundled payment demonstration saved $42.3 million, or roughly 10 percent of expected costs, and reduced patients’ insurance costs by $7.9 million while improving care and lowering mortality rates. Other experts estimate that if we moved to bundling for just six chronic conditions and four conditions requiring hospitalization, providers could shave between 25 to 50% off the costs associated with avoidable complications by providing higher-quality, more collaborative care.

Our healthcare system has waited far too long to make these critical changes. Instead, we’ve been limping along, attempting to fix regulation with more regulation, which has created myriad known pitfalls for consumers, not to mention the federal budget. People and providers want to work together to improve health, but this can only be done when we start rewarding innovators who embrace flexibility and ingenuity. Bundled payments are a good start. Let’s hope for more.—

Bundled payments and other “gain-sharing” forms of reimbursement are scheduled to go into effect early next year. Based on what we’ve seen thus far, two statements seem imminently fair:

• No one is surprised with the success the early adopters are having;
• Getting value based compensation models implemented (with bundled payment schemes leading the charge) should be a priority, regardless of who is elected.

—Tom Finn