Executive Summary —
Improving provider incentives and reimbursement
must become a central component in health care reforms. Payments need to
align with the value delivered to patients: better health outcomes
delivered at lower costs. Today, however, deeply‐flawed reimbursement
approaches actively discourage providers from delivering value to their
patients. In this paper the authors argue that reimbursement through
bundled payments is the only approach that aligns providers, payers, and
suppliers in a healthy competition to increase patient value. The
authors describe the principles of value‐based bundled payments, how
such bundles should be constructed, and why they believe this
reimbursement method best aligns everyone's interests around value. They
show how recent improvements in measuring patient's outcomes and the
cost of care are overcoming the past barriers to wider adoption of
bundled payments. They conclude by describing how bundled payments can
transform competition in health care, and the longer‐term implications
for providers, payers, employers, and health care delivery systems. Key
concepts include:
- A value‐based bundled payment is a single payment for treating a patient with a specific medical condition across a full cycle of care.
- A bundled payment should cover all the procedures, tests, drugs, devices, and services during inpatient, outpatient, and rehabilitative care for a patient's medical condition.
- The limited adoption of value‐based bundles to date has been caused by today's fragmented structure for delivering healthcare, and inadequate or non‐existent measurement of costs and outcomes at the medical‐condition level.
- Recent advances in value‐based healthcare delivery concepts set the stage for much more widespread adoption of value-based bundled payments.
