Study: Few California Providers Adopt Bundled Payment Method
Several California hospitals and insurers that participated in a pilot program to bundle payments for certain health care treatments and procedures experienced disappointing results, according to a study published in Health Affairs, Kaiser Health News' "Capsules" reports.
The payments offer a fixed lump sum to cover the average cost of a "bundle" of services, such as all care and treatment related to an individual's hip replacement surgery.
Under the bundled payment method, hospitals, physicians and other providers share the fixed payment of a set of services (Hernandez, "Capsules," Kaiser Health News, 8/5).
Details of Study
The study was funded by a $2.9 million grant from the Agency for Healthcare Research and Quality.
For the study, RAND researchers aimed to determine whether bundled payments could be an effective model for care of insured orthopedic patients in California who are under age 65. They interviewed:
- Five California hospitals;
- Five orthopedic surgeons, who were associated with two hospital systems;
- Four technology vendors;
- Multiple representatives of six California health plans;
- One ambulatory surgery center;
- One independent health care practice; and
- The state regulatory agency (Ridgely et al., Health Affairs, August 2014).
Researchers found that while six large insurers and eight hospitals in the state began a pilot program to test bundled payments in 2010, only three insurers and two hospitals entered contracts to adopt the payment method. According to the study, the majority of interested stakeholders did not adopt the method because they did not think bundled payments would significantly change care delivery or lower associated costs.
Researchers said they were unable to determine whether bundled payments affected health care costs and quality because the pilot yielded such a small number of hospital cases.
Lead author Susan Ridgely, a RAND senior policy analyst, said the low participation was "unexpected," adding that "hospitals began to see that [bundled payments] required too much time and effort or maybe that it was not in their best interest."
According to "Capsules," the low participation could have resulted from differing priorities among insurers and providers. For example, providers benefit from limiting bundled payments to low-risk patients for shorter periods of time, while insurers would benefit most from patients who receive less-costly care for longer periods of time.
Ridgely called such issues "solvable problems" and said the researchers are "still quite enthusiastic" about bundled payments.
She said that providers would have to treat a minimum number of patients for the payment method to pay off without being too much of an administrative burden. She added, "What we're hoping to do is bring to the forefront some of the issues these organizations are going to have to grapple with" ("Capsules," Kaiser Health News, 8/5).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.