Researchers: Bundled Payments Program Bearing Fruit—But Challenges Face Leaders

Feb. 28, 2019
The future of bundled payments appears bright, but new models will need to be developed to make specialty care more cost-effective, say medical researchers at the Dell Medical Schoo.

The future of the bundled payments concept appears bright, as that concept expands out into new areas of care delivery, according to three physician researchers. John P. Andrawis, M.D., MBA, Mark McClellan, M.D., Ph.D., and Kevin J. Bozic, M.D., MBA, all holding affiliations with the Dell Medical School in Austin, Texas, believe that new opportunities have opened up because of recent moves being made by the Center for Medicare and Medicaid Innovation (CMMI), a division of the Centers for Medicare and Medicaid Services (CMS).

Writing in NEJM Catalyst, an online branch of The New England Journal of Medicine, the three physicians analyzed the current moment, in a February 26 article entitled “Bundled Payments Are Moving Upstream.” “By creating a Musculoskeletal Institute and a bundled payment model that focuses on the condition or person level of care, rather than the procedure level, leaders at Dell Medical School at The University of Texas, Austin are finding early success in improving care outcomes while controlling the cost of care for degenerative musculoskeletal disease,” they wrote. “Results include double-digit improvement in functional status of the patients at the first follow-up visit, and a decrease of more than 25 percent in the utilization of elective surgical procedures among the population receiving care.”

As the researchers noted, “CMMI recently announced the voluntary Bundled Payments for Care Improvement – Advanced (BPCI-A) program, which expands DRG-based bundles. A physician- or hospital-based clinical entity can choose to be accountable for a 90-day period involving one of 29 inpatient and three outpatient clinical episodes, such as myocardial infarction and stroke, which have historically been paid through DRGs. The entity is at risk for excess overall Medicare spending, can retain savings relative to a target price, and must also meet benchmarks for quality.”

The challenge, they believe, will be finding ways to engage specialists in the bundled-payment venture, noting that episode-based bundled-payment programs “have had little impact and may have aggravated one of the major drivers of health care spending in the United States: preventable utilization of health care services for chronic conditions, such as avoidable hospitalizations or elective surgical procedures. For bundled payments to fulfill their promise of delivering greater value to patients, bundling must shift toward the condition or person level rather than the procedure level.” So moving forward, they urge, value-based payment models will need to reframe the position of specialists in value-based payment arrangements. In that context, the authors share several recommendations for how payers and providers can rearrange bundled-payment programs to make them work better going forward. And they share about the model they’ve been developing in Austin that involves “a financial platform for an integrated set of patient-focused services that are not historically offered to patients with a chronic condition where most costs incurred are related to specialized surgical procedures.”