The adoption of bundled-payment programs is one of the primary drivers of health system transformation, moving the field from a fee-for-service system of payment to one that rewards value. Bundled payment — which provides a set payment for an episode of care — rewards providers for enhanced care coordination, and for ultimately improving the quality and efficiency of care. Hospitals and physicians assume the financial risk of care delivery for a set price for a single care episode over a set period of time, typically 30, 60 or 90 days. The onus is on organizations to develop patient-centered delivery models built on evidence-based practices that reach across the care continuum.
Both commercial payers and the Centers for Medicare & Medicaid Services (CMS) reimburse bundled payment programs. The Bundled Payment for Care Improvement initiative (BPCI) has already been launched by CMS. Other similar programs underway through the Centers for Medicare and Medicaid Innovation (CMMI) include the Oncology Care Model (OCM) and Comprehensive Care for Joint Replacement (CJR) model. Upcoming initiatives comprise an expansion of the CJR, a new mandatory bundled payment program for heart attack and cardiac bypass surgery services, and a new cardiac rehabilitation incentive program. CMS recently delayed the go-live date for these from July 1 to Oct. 1, 2017.
A report by PricewaterhouseCoopers1 suggests that adoption of bundled payment is at a “critical turning point,” with 30 percent of providers and 20 percent of employers having adopted bundled-payment models. Two-thirds of providers surveyed in the PwC Strategy & Annual Bundles Survey, 2015/2016 report improved quality and reduced costs through adoption of bundles.
According to the AHA2, “Hospitals need to undertake a range of activities to support performance management in bundling.” These include:
- Develop a system to identify patients likely to qualify for bundled episodes early and assess their risk for complications, and track their progress through the bundle episode. By identifying patients likely to qualify for bundled episodes early, hospitals can help ensure they have the necessary support for optimal acute care and recovery post-discharge.
- Develop multidisciplinary teams, led by physician champions, in the implementation of standard care processes to reduce variations in care to improve patient outcomes and reduce costs. Bundled payment programs often require significant care redesign and adoption of standard treatment protocols. Care teams may include roles, such as care managers and nurse navigators, to ensure smooth patient transitions between care settings and proactively address gaps in care during a patient’s recovery.
- Develop a high-functioning discharge planning process. Bundled payment programs demand a high-functioning discharge planning process to ensure patients have access to the care they need in the right setting and ensure effective communication across the care continuum.
- Enhance data analytics and information sharing capabilities. Participation in bundled payment requires extensive data analytics and data-sharing abilities to help providers track patients across the care continuum, monitor outcomes and identify areas for improvement.
Advice from the field: Lahey Health’s experience with bundled payment
Lahey Health in Burlington, Mass., has been at the forefront of bundled payment adoption through participation in CMS’s BPCI program. The hospital and medical center launched its first bundle pilot in January 2014 and added four bundles as of October 2015. The organization now operates five bundled payment programs in total joint arthroplasty, coronary artery bypass grafting, hip and femur fractures, major bowel procedures, and stroke. Lahey Health also falls within one of the metropolitan service areas designated for the mandatory cardiac bundle and the cardiac rehabilitation incentive program. Preparation is underway to expand the Lahey bundle program from the medical center to include other hospitals within Lahey Health.
According to Cathy Ball, Lahey’s director of bundled payments, the shift toward bundled payment has helped enhance patient-centered care and improve outcomes. “Providing value-based care is the right thing for the patient,” she says. “Fee-for-service did not encourage clinicians to reach out to post-acute care providers or focus on a patient’s care much beyond the inpatient stay.” Now the organization has well-established partnerships with post-acute providers in its community. “Bundled payment incentivizes all caregivers in different care settings to ensure the patient is getting the best care,” she adds. “We are all looking at what we can do to bring down costs while making care better.”
Lahey has partnered with xG Health Solutions, Columbia, Md., to help guide the organization through its bundled payment adoption, as well as provide analysis of CMS data. “Data analytics has been another big win,” says Ball, noting the organization now knows where and when a patient receives care within 90-days post-discharge, when the patient visits the emergency department, and whether the patient is readmitted to the hospital other than at Lahey. Although the data is somewhat retrospective, it’s helped identify patterns that lead to quality improvement opportunities. “We didn’t have the data before to know how best to intervene, or whether our interventions were helpful,” says Ball.
For example, data showed patients participating in the total joint bundle were being readmitted with wound infections. After assessing various options, the hospital adopted seven-day dressings, which reduced infections and enhanced patient and staff satisfaction by eliminating multiple dressing changes per day while in-house and associated hospital readmissions post-discharge.
One of the keys to success under the bundled-payment model is developing ongoing communication with other providers within the community. Bringing together representatives from the hospital, including physicians, along with home health, acute rehab, and skilled-nursing providers, has helped build trust and understanding of what role each group serves. “We are all learning from each other,” Ball says.
Rocky Edmondson, R.N., senior director of xG Health Solutions, agrees. “If you don’t have good relationships with post-acute providers in your community, you won’t be successful.”
Another key to success is physician involvement. “Physicians want to know what happens to patients after they leave the hospital,” says Edmonson. “It’s important to drive physician engagement by letting them have a voice in the process.” Ball also notes it is critical that physicians have dedicated time to focus on process improvement initiatives under bundled payment.
- “Strategy & Annual Bundles Survey, 2015/2015,” PricewaterhouseCoopers, 2016.
- “Medicare’s Bundled Payment Initiatives: Considerations for Providers,” AHA Issue Brief, 1/19/16.