Bundling
and
engagement

April 5, 2016 -- Today I attended Northern California HIMSS's 4th Annual Patient Engagement Summit at Stanford University. A majority of the attendees were, like me, vendors of healthcare technology. The experience was most worthwhile. We all learned a lot.

Perhaps the most interesting session was entitled Payer Challenges. Payers include insurance companies, health plans, and the data analysts who work for them. It was eye-opening to hear their side of the healthcare story.

We learned that this month, under a provision of the ACA, bundled payments have gone into effect. This replaces -- on a voluntary basis -- the more traditional and likely less effective (from a cost-savings and quality-of-outcomes viewpoint) fee-for-service payments.

At the CMS web site, the concept of bundled payments is described:

Traditionally, Medicare makes separate payments to providers for each of the individual services they furnish to beneficiaries for a single illness or course of treatment. This approach can result in fragmented care with minimal coordination across providers and health care settings. Payment rewards the quantity of services offered by providers rather than the quality of care furnished. Research has shown that bundled payments can align incentives for providers � hospitals, post-acute care providers, physicians, and other practitioners � allowing them to work closely together across all specialties and settings.
A bundled payment is for a single episode of care (e.g. a hip replacement) and is made to a hospital that then pays the various caregivers such as the surgeon, the physical therapist, the pharmacist, etc.

The amount of the payment remains fixed even when the patient must be readmitted to the hospital within 90 days. If that happens, the hospital will likely lose money.

Thus, the incentive is strong to coordinate caregivers to work as a team, focusing above all on outcomes thus avoiding that readmission. Indeed, research has shown that the incentive works -- costs go down and quality of care goes up. Here is a brief tutorial and video about bundled payments.

Not by accident, an effect of bundling payments is the incentive for patient engagement, the topic of today's conference. Involving the patient in their own care is essential for good outcomes. Also, the provider becomes motivated to pay attention to patient-reported outcomes. Now the financial rewards are aligned with these care-improving behaviors.

I have written about this concept of patient engagement in a different context, that of healthcare's shifting paradigms. The old paradigm was discharge planning. Now we strive for lifestyle change.

Today's conference was timely indeed.

Table of Contents