Bundled Payments: Value-Based Guidance

Baptist Health System CFO Gary Whittington, Penn Medicine's Amol Navathe, MD, and Guidehouse's Rulon Stacey and Rich Bajner for HFMA

With a new administration in the White House, the healthcare landscape is rife with uncertainty. Providers, payers, and pundits alike have been left contemplating the future of healthcare policy in the United States.

The Center for Medicare & Medicaid Innovation (CMMI), Medicare’s platform for developing and testing value-based payment models, is an oft-mentioned target of the Trump administration. Many Republicans believe CMMI has unfairly served as a vehicle to push value-based models—some mandatory—without allowing for appropriate legislative review. On the other hand, the decision could be made to simply shift power to the new administration as a means of revamping existing reforms and developing new ones.

Although some value-based models face an uphill battle, the value-based concept has a long history of bipartisan support. The George W. Bush administration first tested the approach, and such models as bundled payments—single, fixed payments for services by two or more providers during an episode of care—have backing from both sides of the Congressional aisle, making their fate less directly tied to that of CMMI and the Affordable Care Act.

There’s also a growing body of evidence pointing to the value of bundled payment. An article published in JAMA Internal Medicine outlines how Baptist Health System (BHS) achieved replicable hospital and post-acute care savings on joint replacement procedures while reducing Medicare payments, without compromising quality. According to the research, from 2008 to 2015, the San Antonio-based health system, an ACE and BPCI participant:

  • Reduced Medicare payments by 20.8 percent during a period in which such payments increased 5 percent nationally
  • Achieved a 67 percent reduction in prolonged length of stay (LOS)—a validated measure of surgical complications—while patient severity remained unchanged
  • Saved more than $11 million, including a 54 percent decrease in post-acute care during BPCI

Learn more about the strategies deployed by BHS that can be implemented immediately, even by health systems without bundling experience.

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