Bundled Payments: Wave of the Future for Individual Health Plans?

May23
Posted by Grace

Bundled payments for medical services are not a new idea, but they have received attention during the Obama administration, particularly in light of health care reform that has already taken place for individual health plans. This approach to health services payments has been touted as the way to save money on health care costs, while raising the bar on patient care standards.

However, are bundled payments really the wave of the future for Affordable Health Plans? We will take a look at the pros and cons of such a proposal.

What are Bundled Payments?
Bundled payments are another method for paying for medical services all geared toward the precise treatment of a single patient. For example, a patient who goes in for cardiovascular surgery would pay a single lump sum for the entire procedure, including pre and post-operative care, anesthesia and all the other procedures and providers that worked together to complete the treatment. This is in contrast to the standard fee-for-service model, in which physicians charge a fee for each service rendered.

There have been numerous pilot plans created on bundled payments and their effect on patients, providers and individual health plans. Most of the studies have shown a significant reduction of cost, while patient care remained consistent or even improved.

On the surface, it may appear that bundled payments are the way to save money and create affordable health plans across the board. However, the bundled payments may only work in certain situations and with specific guidelines in place.

Pros of Bundled Payments
There are numerous potential benefits of bundled payments for individual health plans, including:

• Significant reduction of health care costs, while ensuring doctors get their fair share of fees for services rendered
• Better coordination of patient care through different providers and facilities
• Discourages the administration of unnecessary medical care
• Does not penalize providers for caring for sicker patients
• Decreases financial risks to patients and individual health plans

While there are distinct benefits of bundled payments, there are some drawbacks to this model as well.

Cons of Bundled Payments
Some of the potential drawbacks of bundled payments include:

• Providers might be tempted to avoid patients who would not receive adequate reimbursement
• Hospitals could increase profit by denying access to specialists during a patient’s hospitalization
• Some type of illnesses or treatments might not fall neatly into the bundle package
• Providers could assume serious financial risk if the patient has a catastrophic event

To get the most out of a bundled payment model, providers need to be involved in the process of identifying the bundles and defining the responsibility of each provider within the bundle. There also needs to be absolute transparency for individual health plans to work harmoniously with both providers and patients to provide the highest quality of efficient care.

With the right approach, bundled payments might be successfully used in some situations to save health care costs, while enhancing the quality of care patients receive.

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