An Overview of Bundled Payments for Surgical Oncologists: Origins, Progress to Date, Terminology, and Future Directions
Table of Contents
Author(s)
Anaeze C. Offodile II
Former Nonresident ScholarBy Anaeze C. Offodile II, Winta Mehtsun, Cary J. Stimson and Thomas Aloia
Abstract
The US healthcare system is in the midst of a transition in reimbursement and delivery models from a volume orientation (‘‘fee for service’’) to one that allies payments with health outcomes achieved (‘‘pay for performance’’). The impetus for this has been an unsustainable rise in healthcare spending [17.8% of the 2016 gross domestic product (GDP)] that has not been matched by commensurate improvements in health coverage or population-level care quality. Alternative payment models (APM) such as global capitation, patient-centered medical homes, and bundled payments have emerged as key levers for driving this change. Currently, more than 30% of Medicare fee-for-service (FFS) provider payments flow through APMs, with a target of 50% by the end of the 2018 calendar year. Bundled payments, a form of episode-based payment, denote an arrangement wherein hospitals and providers are paid a predetermined lump sum in exchange for all services furnished to a patient during a predetermined time period (e.g., 30 or 60 days) or over the course of a defined clinical condition. The principal aim of this strategy is to engineer better coordination and communication between providers across the entire care continuum, encourage standardization, and focus systems on lowering preventable complications. In contrast, when services are paid for individually or per ‘‘item’’ (i.e., fee for service), respective providers face a distortion of incentives to increase the volume of each service offered regardless of its impact on outcomes or contribution to duplication of services. By linking reimbursement to outcomes, bundled payments serve to increase provider (hospital and physician) financial accountability for the costs and quality of care delivered. Conceptually, bundled payments represent the middle ground between reimbursing discrete units of service (‘‘fee for service’’) and remunerating the totality of care a given population receives (‘‘global capitation’’).
Read the full article in Annals of Surgical Oncology.