It seems since the Affordable Care Act passed in March 2010, we've had a different flavor of the month that illustrates where the industry's mindset is. Last year, we all seemed fixated on medical loss ratios. Then, the buzz shifted to accountable care organizations.
Now, bundling is set to capture the spotlight, thanks to an announcement Aug. 23 by the Centers for Medicare & Medicaid Services that it wants providers to test any one of four different models of payment bundles an initiative that was part of the ACA.
Payment bundles are the antithesis of fee for service, which many people (correctly) blame for the surge in medical costs over the past decade or two. Rather than paying for each medical service as a patient moves through a treatment, the payer makes a single, global payment to a provider, who then distributes it to others such as labs, imaging centers, and pharmacies.
CMS tried payment bundling for heart attack care through a pilot program and currently is the midst of another one for 28 cardiac-related and nine orthopedic procedures. With the announcement this week, it's a signal that CMS is ready to jumpstart the movement.
Proponents believe it will wring costs out of the system. If a provider can treat a patient for less than the agreed-upon bundle, he or she can keep the extra. If he doesn't, he won't. But opponents say it could cause providers to skimp on care in the interest of meeting the benchmark.
Both arguments may seem valid, but I'd err on the side of the bundling proponents, simply because we have to do something to control medical costs, which are blamed for everything from overheated federal spending to increases in the cost of consumer goods.
It will take a long time to blow up the fee-for-service world in healthcare. Payment bundling is one small step, but it's showing promise as a way to get the bomb assembled. Let the fireworks begin.