The Latest on Bundled Payments

The Center for Medicare and Medicaid Innovation’s Bundled Payments for Care Improvement has seen some dramatic success with bundled care for hip and knee replacements. Significant savings have been achieved with no increase in ED visits, readmissions or 30-day mortality for these procedures. But recent research published in the Harvard Business Review indicates early returns on bundled payments for five of the most common other medical conditions in the BPCI program have not yet achieved desired results.

The researchers are quick to point out that this doesn’t necessarily mean that there are problems with the bundled-payment model. Rather, they theorize that the “fragmented nature of the patient journey” in these other types of cases may help explain why it’s been difficult to achieve the kind of cost savings and positive patient experiences that have been seen with bundled care for hip and knee replacements.

In their research, John Orav and Jie Zheng used Medicare claims from 2013 through 2015 to identify admissions covered under the Medicare bundled-payment initiative: heart attack, heart failure, pneumonia, chronic obstructive pulmonary disease and sepsis. They calculated the costs of each episode (hospitalization plus all costs 90 days post-discharge) and then checked to see whether costs dropped more in BPCI hospitals than in the control hospitals after the program started. The findings: Medicare payments per episode of care across the five conditions dipped a few hundred dollars. And, over time, there were no differences based on whether hospitals participated in the BPCI program.

The researchers say it simply may take more time to see an impact of bundling on a wider range of conditions. But they suspect one reason for the greater savings and positive patient stories associated with knee and hip replacement surgeries is because these are preplanned events with a largely standardized patient journey. Medical admissions through the ED are typically much different, because patients usually have no prior relationship with the clinicians who are treating their conditions.

To improve the patient experience in these situations, the researchers suggest provider organizations work to better understand the “complexity and fragmentation of the patient journey” for unplanned admissions. “Hospitals can and should design and implement clinical pathways and provide coordinated, efficient care for medical conditions, and bundling may be a powerful policy measure to help us get there.”

Want to learn more about leading practices on bundled payment? The AHA Center for Health Innovation will hold a Nov. 15 webinar on Markers of Success in Bundled Payment Programs. Register here.