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Taking a Tip from the Healthcare CEOs: Bundle Up Now for Quality Care

Janice Simmons, for HealthLeaders Media, June 18, 2009

The group of nearly a dozen healthcare CEOs that met in Washington last week to introduce a white paper supporting healthcare reform had a basic message: change is needed now.

"We as providers have a particular responsibility to step up to the plate right now and deliver care differently—and be conscious of not just cost or quality: We can do both," said Nicholas Wolter, MD, who is CEO of the Billings (MT) Clinic.

"However, we need help from policymakers. We need payment models that will drive this," Wolter said. Also needed were episode payments, capitation and bundled payments—combining separate payments for one procedure into one bundled category.

In the Health CEOs for Health Reform report, the leaders suggested that immediate steps can be taken now such as ending Medicare fee-for-service payments for individual services. Instead, it can move to "outcome-driven bundled payments" that encourage provider accountability through full and partial risk contracts within the next decade.

Moving in this direction will hold providers accountable to "reasonable cost and quality standards" at a specified date, the paper said. The overall purpose of this policy is not to punish providers but to guarantee that Medicare will slow its rate of cost growth.

Linking provider payments to quality and patient outcomes within and episode or continuum of care—and then allowing providers to share in potential savings (along with financial risk)—can increase quality and efficiency, the leaders noted.

In addition, the bundled payments could:

  • Help reduce hospital readmissions by aligning the interests of clinicians and hospitals.
  • Improve coordination of care for chronically ill by encouraging communications between a patient's care team.
  • Rationalized practice distortions that discourage time-intensive but high-valued services delivered by primary care providers.

The paper notes that many providers are prepared to coordinate extensively across sites of care and accept risks for the costs of patient care. Those situations could be addressed by developing bundled payment structures that allow providers to assume responsibility but bear risk for some—but not all of—the costs of a specific patient's care.

In the meantime, the leaders are calling on the Centers for Medicare and Medicaid services to work with high-quality integrated healthcare system to identify and develop specific bundles of payments in specific settings.

And, it might be necessary to adjust the bundled units and payment rates for use outside of the integrated delivery system—but today's higher-performing health systems may be good places to start to identify high-quality processes of care.

So what are we waiting for: those drawing up healthcare reform legislation need to look at where "victory" over high prices and poor quality can be achieved within a relatively short period of time.

Just ask those healthcare CEOs.


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Janice Simmons is a senior editor and Washington, DC, correspondent for HealthLeaders Media Online. She can be reached at jsimmons@healthleadersmedia.com.

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