Bun­dled Pay­ment Mod­els as a Path to Health Care Trans­for­ma­tion

How Bun­dles Drive Mar­ket-Based Re­form

Modern Healthcare - - LATE NEWS - Carolyn Mag­ill CEO Rem­edy Part­ners

As Pres­i­dent Trump ob­served, health care is com­pli­cated. At Rem­edy, the episodes of care com­pany, we be­lieve the most ef­fec­tive way to ap­proach com­plex­ity is to break it down into com­po­nent parts and tackle them sec­tor by sec­tor. Sim­pli­fi­ca­tion through pri­or­i­ti­za­tion. By re­ori­ent­ing how we pay for care to align with how pa­tients ex­pe­ri­ence it and clin­i­cians de­liver it, bun­dled pay­ments pro­vide the plat­form to do just that.

Can bun­dled pay­ments play a role in re­solv­ing dis­cord on health re­form ef­forts?

CM: Yes. Bun­dled pay­ments re­struc­ture how we pay for health­care to match the pa­tient ex­pe­ri­ence. By in­cen­tiviz­ing physi­cians, spe­cial­ists, hos­pi­tal­ists, and other clin­i­cians to be ac­count­able for what hap­pens to a pa­tient for months fol­low­ing a clin­i­cal di­ag­no­sis or pro­ce­dure, bun­dled pay­ments re­duce frag­men­ta­tion of care and en­able clin­i­cians to tai­lor treat­ment to in­di­vid­ual cir­cum­stances.

There is bi­par­ti­san sup­port for bun­dles, with roots dat­ing back to the first Bush Ad­min­is­tra­tion. Sec­re­tary of Health and Hu­man Ser­vices Dr. Tom Price has said he is sup­port­ive of vol­un­tary bun­dled pay­ment mod­els; or­ga­ni­za­tions like The Her­itage Foun­da­tion and the Amer­i­can Med­i­cal As­so­ci­a­tion have en­dorsed bun­dled pay­ments as mod­els for re­form. CMS has put stakes in the ground to ex­pand bun­dled pay­ment ini­tia­tives for the Medi­care Fee-For-Ser­vice (FFS) pop­u­la­tion over the com­ing years. States have in­cor­po­rated bun­dles into Med­i­caid pro­grams. Pay­ers are in­te­grat­ing bun­dles into provider net­work con­tract­ing method­olo­gies in health plans serv­ing Medi­care Ad­van­tage and un­der-65 pop­u­la­tions; providers ask for bun­dled pay­ment so­lu­tions in sup­port of all their pa­tients. This mo­men­tum po­si­tions bun­dles to play a cen­tral role in health re­form ef­forts.

What kind of im­pact can bun­dled pay­ments have?

CM: Decades of ev­i­dence show that bun­dled pay­ments work. Rep­re­sent­ing $10 bil­lion in med­i­cal spend, Medi­care’s vol­un­tary bun­dled pay­ment model ini­tia­tive, Bun­dled Pay­ments for Care Im­prove­ment (BPCI), has be­come the most re­cent prov­ing ground. The pro­gram sets a fixed dis­count on his­tor­i­cal costs for 48 bun­dles, in­cor­po­rat­ing 179 DRGs. BPCI builds on the no­tion that bun­dles are most ef­fec­tive in tack­ling ar­eas where there is sig­nif­i­cant vari­abil­ity in spend, as in post-acute care.

In 2017, Rem­edy to­gether with our part­ners will de­liver 7.7% sav­ings, while main­tain­ing or im­prov­ing qual­ity lev­els on close to 300,000 pa­tient episodes in BPCI. This equates to $120 mil­lion in sav­ings to CMS. CBO has pro­jected that even tar­get­ing a small sub­set of Medi­care FFS spend­ing – 90 day episodes trig­gered by an in­pa­tient stay – would yield $47 bil­lion in sav­ings through 2023. Given the op­por­tu­nity to ex­pand the scope of bun­dles to in­clude other ser­vices and pop­u­la­tions, that’s just the be­gin­ning of what we can achieve.

How do physi­cians, nurses, other clin­i­cians and heath ad­min­is­tra­tors feel about par­tic­i­pat­ing in bun­dled pay­ment pro­grams?

CM: We re­ceive pos­i­tive feed­back about par­tic­i­pa­tion in bun­dled pay­ment pro­grams, of­ten cit­ing the ben­e­fits of aligned in­cen­tives within a time-based frame­work. Clin­i­cians share they are bet­ter able to de­liver qual­ity care be­cause they are newly em­pow­ered to en­gage in de­ci­sions about where a pa­tient re­ceives re­ha­bil­i­ta­tive and fol­low-up care.

One of the or­tho­pe­dic sur­geons par­tic­i­pat­ing in Rem­edy’s bun­dled pay­ment pro­gram ob­served that BPCI makes “a sub­stan­tial dif­fer­ence in the way we prac­tice medicine for the bet­ter. We’re more ag­gres­sive about get­ting pa­tients out of bed quicker, out of the hospi­tal, and back home safely.”

Where do bun­dled pay­ment pro­grams go from here?

CM: Bun­dled pay­ment pro­grams will con­tinue to ad­vance mar­ket-based re­forms, strength­en­ing the doc­tor-pa­tient re­la­tion­ship while re­duc­ing re­liance on govern­ment reg­u­la­tion to drive change. Bun­dles ad­dress the lim­i­ta­tions of fee-for-ser­vice and other pay­ment mod­els by in­creas­ing trans­parency in cost and qual­ity, in­te­grat­ing spe­cial­ists into re­form ef­forts, and in­tro­duc­ing ap­proaches that are scal­able and repli­ca­ble across pop­u­la­tions, set­tings and ge­ogra­phies. They en­hance con­trol over health­care dol­lars by fa­cil­i­tat­ing con­sumer-driven so­lu­tions like episode-based ben­e­fit plans. Bun­dles pro­vide the build­ing blocks to fa­cil­i­tate re­form ef­forts like com­bin­ing Medi­care Parts A and B and ad­min­is­ter­ing block grants for Med­i­caid pro­grams.

To re­duce the frag­men­ta­tion of care and to treat pa­tients as in­di­vid­u­als, bun­dles will ex­pand be­yond med­i­cal spend to in­clude phar­macy, be­hav­ioral health and so­cial de­ter­mi­nants so that we can – fi­nally – treat the whole per­son, pro­vid­ing ac­cess to qual­ity care where and when we need it most.

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