Bundled payment programs can lead to significant savings for payers, patients: RAND

When cost-sharing is waived for patients who use providers in bundled payment agreements, both payers and patients can see significant savings, according to a new study from the RAND Corp., a nonprofit think tank. The study was published March 1 in Health Affairs.

The study looked at a 2016-20 program developed by a private payer. Under the program, providers agreed to a set bundled payment for procedures like knee replacement surgeries. The bundled payment spanned all related care given within a 30-day period. The program also waived cost-sharing for patients who choose to receive care from bundled payment providers, which included health systems and surgeon groups.

The bundled payment contracts covered a range of procedures, but researchers analyzed the three most common: total knee and hip replacement, spinal fusion, and bariatric weight loss procedures. The study included 2,372 procedures.

Researchers found the bundled payment program lowered total surgery costs for the three procedures by an average of $4,229, or a relative reduction of 10.7 percent. Cost-sharing payments were waived for 21 percent of patients in the program, who saw their out-of-pocket costs fall by an average of $498.

"Bundled payments are gaining popularity in the Medicare system, but have not been adopted as widely by private insurance plans," study author Christopher Whaley, PhD, a policy researcher at RAND, said in a news release. "The wide variation in prices among the commercially insured population presents a meaningful opportunity to use similar incentive structures to move patients toward lower-price providers."

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