Bundling Payments for Medicare Might Be Slow, Ineffective, Studies Say

Bundling payments for Medicare beneficiaries receiving certain procedures might be an impractical way to lower costs, improve care and standardize treatments, according to a pair of studies published in Health Affairs, National Journal reports.

First Study

One study, led by RAND policy researcher Peter Hussey, found that several factors -- including electronic health records, hospital culture and payment models -- could cause the bundling method to be slow to implement.

The study examined data of three facilities using the PROMETHEUS payment program designed by the Health Care Incentives Improvement Institute, and found that the sites had not made a single bundled payment or negotiated a single bundled payment contract in three years. Hussey said that there are "substantial implementation challenges" to using a bundled payment method (Quinton, National Journal, 11/7).

However, the study found that there are some positive effects of bundled payments, such as stimulating efforts to coordinate care.

Still, the study noted that more improvements could come through technical upgrades to software tools. According to the researchers, most of the issues stemmed from software errors and processing claims (Wilde Mathews, "Health Blog," Wall Street Journal, 11/7).

Second Study

A second study, led by David Miller of the University of Michigan, found that the components of four common bundled surgical procedures -- back and colon surgeries, heart bypasses and hip replacements -- are likely to vary by hospital or specialty.

Miller said the study found that "even when you take into account intentional differences in Medicare payments, there's still a fairly wide variation in payments to hospitals." He added that bundled payments can be a "financial 'wash' for hospitals, with institutions getting higher payments for some services and lower payments for others" (National Journal, 11/7).