Bundled Payment Research

By January 13, 2020 January 16th, 2020 Commentary

Bundled payments have been explored as a method to encourage care coordination and potentially save money for an episode of care.  Medicare and other payers have now routinized their use for certain procedures, like joint replacement.  Like everything in health care, you want to know if they are working as hoped.  A Health Affairs article summarizes current research on bundled payments.   (HA Article)   The authors conducted a meta-review, in which they attempted to identify all studies looking at bundled payments and compile the outcomes.  They covered four categories of outcomes:  spending, utilization, quality and unintended consequences.  They found 20 relevant studies published from 2016 to 2019.  Sixteen of the studies evaluated spending for Medicare bundled payment programs.  Several found reductions in total spending, but a few others found either slight increases or no significant change.  Ten studies evaluated hospital inpatient spending in regard to bundled payments and most showed no change.  So overall it appears that using bundled payments at best has shown a minor decrease in spending.  Twelve studies looked at utilization.  In general these studies found that there were fewer discharges to either inpatient type post-acute facilities or home health agencies under bundled payments.  In regard to hospital length of stay, most research found a significant decline in days; the results were mixed for length of stay at post-discharge inpatient settings.  18 studies looked at the effect of bundled payments on readmission rates.  About half found a decline and the rest showed no significant effect.  In terms of unintended consequences, five studies which looked at whether hospitals were avoiding higher risk patients found no change.  It should be noted that most of the research, and the studies that tended to find benefits, were conducted in regard to orthopedic procedures like joint replacement.  There was less research, and less positive evidence, in regard to other clinical conditions.  Bundled payments appear to do no harm, so they probably are worth continuing to explore, and they may provide stronger benefits over a longer period of time, as providers adjust to them.  But it is also likely that providers will figure out how to maximize their revenue under bundled payments, as they have done with every other payment innovation.

Kevin Roche

Author Kevin Roche

The Healthy Skeptic is a website about the health care system, and is written by Kevin Roche, who has many years of experience working in the health industry through Roche Consulting, LLC. Mr. Roche is available to assist health care companies through consulting arrangements and may be reached at khroche@healthy-skeptic.com.

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