4 Steps Hospitals Can Take to Pilot Bundled Payments

The concept of bundled payments is one of the most heavily discussed methods to reform the U.S. healthcare system's payment design, but the concept is still not widespread among hospitals and health systems.

 

Bundled payments involve paying a provider a fixed dollar mount for a certain episode of care over a defined period — for example, hip replacements over 90 days. Hospitals and health systems are considered to be cornerstone players of bundled payments, and both the government and commercial payers are busy setting up agreements and strategies with varying degrees of success.

 

A new report from the Robert Wood Johnson Foundation outlined four steps community providers can take to determine if it is the right time to pilot a bundled payment program.

 

1. Define the focus. Hospitals need to be cognizant of what other payment reform initiatives are going on in their communities. For example, can your hospital balance an accountable care organization and shared savings programs with a bundled payment program? Should your organization bundle one or two procedures/conditions, or should it take a baptism-by-fire approach?

 

2. Analyze the data. Healthcare is becoming defined by how leaders interpret data. For bundled payment programs, hospitals must understand utilization and price patterns in their communities. "For instance, if costs vary wildly in your community for orthopedic procedures, try to understand why," the report stated. "Are certain hospitals charging more?"

 

3. Negotiate the deal. When hospitals decide to implement a bundled payment, executives must carefully iron out a case rate that allows for a margin. The report also said hospitals should build in extra payments or penalties based on quantifiable quality goals.

 

4. Figure out the small stuff. Hospitals need to consider frontend issues, like how the bundled payment program will be communicated to patients, before rolling out the initiative.

 

More Articles on Bundled Payments:

Why Hospitals Need to Look Beyond 30-Day Readmissions

New Payment Models: Comparing Fixed Discounts and Shared Savings

What do Hospitals, Physicians Think of Bundled Payments? 37 Statistics

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