Bundled Payments: More than Theory

“Every system is perfectly designed to get the results it gets.” ~ Paul Batalden, M.D

In the United States, we are paid for doing stuff. This is fee for service. And we do stuff better than anyone else in the world. This has created a health system that is potentially accessible, exceptionally sophisticated, and expensive. So expensive that many can no longer afford it and have no access.

In our society, if you don’t get paid for something, you’re less likely to do it – unless it somehow makes it more likely you’ll increase what you do get paid for. After all, healthcare is a business. You do have to pay the employees and the bills.

We generally aren’t paid for prevention or coordination. In fact, under fee-for-service, we are rewarded for the consequences of doing those things poorly or not at all. While definitely our mission, and clearly important, on a pure fiscal basis, it’s hard to be excited about preventing ED visits, reducing readmissions, and decreasing utilization. Those very things keep nurses employed, floors full, and the lights on. For most non-profit hospitals in the US, the operating margins are around 2 to 3%. Doing what we do as opposed to not doing what we should do better, for many, is an issue of survival.

Imagine with me what would happen if we were paid for quality, exceptional patient experience, penalized for excessive volume, and rewarded for efficiency. I can imagine that there would be far better interdependent coordination and management of care between primary care and specialists. I can imagine a substantial decrease in unproven procedures, medications, and unnecessary tests. I can imagine a system bending itself to align with the needs and preferences of patients, rather designing things that are most convenient for us. I can envision a system that vigorously supports transitions of care, or eliminates them. I can predict a dramatically improved cost accounting system that allows management to fully understand and predict the explicit costs associated with an episode of care, so that they can maximize efficiency and thereby be fiscally rewarded. I imagine that his type of payment reform could change everything.

This is what policy makers are striving for with healthcare reform.

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