Why employers should care about bundled payments?

The transformation to value-based health care is well under way. Self funded employers can take advantage of this opportunity by directly partnering with health systems.  Out of approaches such as ACO, PCMH, Pay for Performance- Bundled care stands out.

Why?

Because bundled care can produce results more quickly, and most of the benefits are directly related to cost reduction and care coordination. With premiums and deductibles rising every year, these benefits appeal to both employers and employees.

What is a bundle care?

Similar to a “package” deal, a care bundle includes a set of interventions, when used together, significantly improve patient outcomes. Bundled payment is a single payment to providers or health care facilities (or jointly to both) for all services to treat a given condition or provide a given treatment.

Bundles can be applicable to a wide range of procedures and conditions — including coronary artery bypass grafting, perinatal, orthopedic procedures such as knee and hip replacements, and certain cancer treatments. Till date, most common bundled care agreements signed between employers and health systems are for cardiac and orthopedic (especially spine) procedures.

Ideally a care bundle should provide the employer and its members an end-to-end view of the solution- the treatments, costs, time periods, quality measures and outcomes.

How does bundled care help in better care coordination?

Currently, the members and their caregivers have to stitch together all pieces of their treatment themselves, while plan sponsors (such as self funded employers) pay for volume of services and not the value. This is absurd given that 30% of their spending is wasted by the health system.

To make money in bundled care, the providers have to manage a full episode of care in a coordinated fashion. This helps in reducing fragmentation and waste and provides members a better experience.

Are there other companies doing this?

Programs like ECEN are demonstrating what progressive employers can achieve when they take back control of their health plan. Better quality outcomes and reduced costs with 98% recommendations from patients.

What procedures should you start with?

It depends on your demographics. Start by analyzing historical claims, payment and location data to understand what “common and elective” procedures cost more than others. Next step would be to identify what providers in what locations should be called for discussions and what services, quality metrics and gain sharing terms should be included in the agreements.