Bundled payments: Challenges in the vision and the game

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The Center for Medicaid and Medicare Innovation launched the Bundled Payments for Care Initiative as a way to reign in healthcare costs and improve the care quality.

At the Becker's Hospital Review 6th Annual Meeting in Chicago, Jonathan Pearce, CPA, principal at Singletrack Analytics, and Kelly Price, senior director of DataGen, discussed the opportunities and challenges in bundled payment programs. In 2011, Singletrack Analytics and DataGen partnered to offer analytics for healthcare providers wanting to join the BPCI program.

When approaching strategies for bundled payment implementation, one can focus on either the "vision" or the "game" of bundled payments, they said.

The vision, according to Mr. Pearce, is the side related to policymakers and physicians. This includes elements related to care improvement, readmissions and post-acute care management; largely what is supposed to occur in a clinical payment system.

The game deals with parameters placed around participation in any type of payment system, including reconciliation, rules and target rates..

"There's a very distinct difference between the vision and the game," Ms. Price said. "A lot of the providers were prepared to take on the vision and get their physicians engaged. But the whole game side of it and how the policy layered on top of that the vision and alter their performance was really a surprise to a lot of them."

Ms. Pearce outlined some key challenges program participants face while navigating new bundled payment programs.

First, several program participants dropped out because they hadn't completed thorough analyses of their current standing before implementing bundled care episodes. When providers don't know what their baseline is, it makes it difficult to know where to direct their focus and initiatives. 

Secondly, Ms. Pearce said hospitals that didn't develop a multidisciplinary game plan involving all stakeholders ran into issues. "Competing hospital priorities leads to a lack of engagement across the hospital," Mr. Pearce said.

With the constantly evolving healthcare environment, hospitals have to work as a cohesive unit and ensure all participants are on the same strategic page.

"There is so much on hospitals' plates at the moment with ICD-10, compliance and security and state programs pushing them into arrangements to take risk," Ms. Price said. "[Bundled payments] require a lot of involvement from a lot of different players across the organization."

Additionally, ongoing policy changes can present a burden to hospitals implementing bundled care payment plans.

The underlying issue, though, is physician involvement.

"Awardees who did not get physicians involved are not doing well," Ms. Price said. "We need to figure out how to get them engaged."

More articles on finance:

What SpongeBob can teach us about the cost of healthcare 
Obstacles persist as physician practices adopt alternative payment models: 7 key takeaways 
The 4 biggest cost accounting mistakes you don't know you're making 

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