The Payment Reform Landscape: Is The Debate Over Retrospective Versus Prospective Bundled Payments A Distraction?

Based on surveys of health plans by Catalyst for Payment Reform, less than 3 percent of payments in the commercial market are “bundled.” One can argue that there have been more conferences and webinars about bundled payment than actual bundled payments. In the public sector, however, there is much more experimentation with and usage of bundled payment through Medicare and Medicaid. There is good reason to pursue bundled payment. At least in theory, a bundle represents the best thinking on how much it costs to treat the course of an identifiable illness, disease, or injury. It also addresses the tendency to inflate costs with excessive, and often unnecessary, medical intervention. But progress has been slow, in part, because of a wide array of variables that go into calculating a bundled payment, including: Which costs does the bundle include? Which providers get which portion of the bundle? What timeframe does a bundle cover? What happens with outlier cases that come in below cost or, more likely, above? These and other questions have stunted the growth of what could be a breakout idea. Is The Focus On Prospective Payment A Barrier? Some believe that the holy grail of bundled payments is prospective bundles—setting a price for a course of care that has not yet occurred and paying only that amount at the start of the episode of care. The thinking behind prospective payment is that the incentives for cost containment will be stronger because providers will be loath ...
Source: Health Affairs Blog - Category: Health Management Authors: Tags: Costs and Spending Payment Policy bundled payment Catalyst for Payment Reform Source Type: blogs