Bundled Payment for Care: More than 500 providers ready to give it a shot

Publish date: 04 Feb, 2013

Anyone wondering whether the healthcare industry has figured out how to cut costs and improve outcomes in a post-fee-for-service world has only to look at the latest announcement from the Centers for Medicare & Medicaid Services Innovation Center to see that the jury is still out. In fact, it's ordering dinner and making hotel reservations.

The Bundled Payment for Care Improvement Initiative announced Jan. 31, 2013, is designed to show whether single payments for individual ?episodes of care? can improve care and lower costs. It builds on several other initiatives from the CMS, including the Acute Care Episode Demonstration and the dozens of Accountable Care Organization pilots.

Four different models are being tested in this round of Innovation Center pilots, and more than 500 provider groups are lined up to participate. The models test prospective and retrospective bundled payments for 48 different episodes of care categories, ranging from amputation and stroke to diabetes and sepsis. In addition, the program tests these payment models in different settings?acute-care hospital stays only, acute-care plus post-acute and post-acute care only.

The demonstration should provide valuable data on how providers can align care delivery to the patient's advantage as well as the provider's bottom line. One key component is the broad range of episodes of care, so broad in fact that these conditions represent nearly three-quarters of all Medicare spending. Medicare Parts A and B are included in the models. Part D prescription drug coverage is not, so that strict curbs on prescription drug spending and tightened formularies may not be part of the cost-benefit calculus. For the moment, at least.

In aligning care to maximize patient health and minimize costs, many previously cutting-edge concepts will become routine.

For example, clinical care pathways (CCPs) are likely to be a critical element in the provision of bundled services. Clinical pathways are designed to standardize treatment plans for the type of high volume and complex conditions included in the initiative's long list of episodes of care. Regular adherence to such CCPs for the management of diseases such as cancer and heart disease have already shown demonstrated performance improvement, including shorter lengths of stay and lower cost.

The pace of consolidation and integration of health systems with physicians and health plans, already rapid, will be even further encouraged by this initiative, especially if it begins to show solid results and thus begins to give participants a competitive advantage.

The national debt will also be a passionate concern in Congress this year, and saving Medicare dollars is a critical component of any debt reduction legislation that may emerge. Any results that flatten the Medicare cost curve will be hailed as salvation.

So, the Bundled Payment Initiative should hasten the shifts in healthcare delivery that have been ongoing for several years, changes that are aimed at shifting both treatment and payment from uncoordinated, individual treatment and payment, to a coordinated patient-centered delivery system that can thrive in a risk-based world. However, the healthcare ocean liner is enormous and turns very, very slowly.

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