New Study Finds Significant and Growing Health Care Payment Reform Activity in U.S.
Half of the identified bundled payment health care reimbursement implementations are operational
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Cary Conway
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WASHINGTON — May 31, 2012 — Of 19 studied bundled payment health care reimbursement implementation sites in process in the U.S., half are operational, and the remaining are continuing to progress in their implementations. This is according to an independent study commissioned by the non-profit Health Care Incentives Improvement Institute™, Inc. (HCI3™) and conducted by Bailit Health Purchasing, LLC. The report details the current real world state of bundled payments — a fixed dollar amount that covers a set of services, defined as an episode of care for a defined time period — and examines how medical conditions are addressed, how bundles are defined, risk is distributed and payments are made.
“Our research is the most comprehensive look at bundled payment implementations conducted to date as we looked at activity across the country,” said Michael H. Bailit, president of Bailit Health Purchasing. “Payers are looking for alternative payment models as the current fee-for-service system is unsustainable, and providers need to prepare themselves for a changing reimbursement landscape.”
The research focused on 19 bundled payment initiatives, including all of the PROMETHEUS Payment implementations and other private and public sector sites. Of the studied initiatives, nine have fully operationalized at least one bundled payment, two are conducting observational studies with no payment involved and eight are in the process of developing a bundled payment.
The PROMETHEUS Payment model was launched in 2006 with the support of the Robert Wood Johnson Foundation through four initial pilots. PROMETHEUS now includes 21 bundles that can potentially impact payment for almost 30 percent of the insured adult population.
“We can no longer rely on the predominant way we pay for care as it leads to overuse of services and inexorably rising health care costs,” said Michael Painter, JD, MD, senior program officer, Robert Wood Johnson Foundation. “American health care and our nation are at a pivotal and difficult time and we must move forward in finding a way to reduce health care costs and improve quality. It’s encouraging to see that bundled payments are helping us make progress towards that goal.”
Moving forward
New technologies are coming online to expand bundled payment implementations, and empower providers and payers to embark on value-based payment. Implementation sites will continue to expand as providers participating in the Center for Medicare & Medicaid Innovation's Bundled Payments for Care Improvement initiative contract with private sector payers for similar bundles.
About Health Care Incentives Improvement Institute™, Inc.
The Health Care Incentives Improvement Institute, Inc. (HCI3®) is a not-for-profit multi-stakeholder umbrella organization for Bridges to Excellence® and PROMETHEUS Payment®. The mission of the organization is to create significant improvements in the quality and affordability of health care by developing and implementing programs that recognize and reward physicians, hospitals and other health care providers that deliver safe, timely, effective, efficient, equitable and patient-centered care. HCI3 offers a comprehensive package of solutions to employers, health plans and coalitions to improve the flawed incentives that currently permeate the U.S. health care system. www.HCI3.org
About Bailit Health Purchasing, LLC
Bailit Health Purchasing is a health care consulting firm dedicated to working with public agencies and private purchasers to expand coverage and improve health care system performance. www.bailit-health.com
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