Is Your Bundled Care Plan Market-Ready?

Three out of four consumers surveyed say they find bundled care plans "appealing." The promise of transparency is tantalizing, but consumers are clear-eyed and armed with a list of essential benefits.

Bundled payment arrangements still aren't the norm, but they soon might be. Two important announcements about bundling took place last week within days of each other. First, Booz & Company issued results of a survey showing 78% of U.S. consumers found the idea of bundled healthcare "appealing."

Then, the Centers for Medicare & Medicaid Services announced four models of bundled payments in which 500 hospitals will participate during various phases of its Bundled Payments for Care Improvement program.

One of the authors of the Booz survey, Minoo Javanmardian, PhD, says consumers are ready for healthcare organizations to start offering bundled care for many reasons, including the possibility of having care and payment for care be more transparent.

"Consumers right now, score healthcare low in satisfaction, and that is partly because they don't have information to be able to make decisions," says Javanmardian. "So, [it's] the whole notion of telling the consumer that under this construct there will be someone, other than you, who will stitch all the things you need to do together and deliver to you an end-to-end product. That doesn't exist today."

Javanmardian says polling shows consumer interest in bundling extends across care settings, beyond physicians. Consumers want bundled coverage to include hospital and facility costs, testing, readmissions, and specialists. And in addition to an increase in transparency, at least 50% of those polled named three benefits essential to making a bundled care arrangement work. 

1. Ability to provide input on care
2. Single, coordinated team care
3. Care warranty

In fact, according to one of the survey's male respondents in the 50-65 year old age category, "One-price-covers-all is attractive, but even more attractive is the promise of a coordinated team providing care and treatment."

The results also revealed what consumers were not willing to do that could impact the structure of a potential bundle: travel for care and give up their primary care physicians. More than half, 64%, said  they would not change physicians or choose a physician based on a bundled healthcare option.

Overall, 74% reported they were only willing to travel within their own city for care; 23% would travel within the region, while only 3% would go out of state for care. That last number is a variable Javanmardian says she will be looking at as Wal-Mart rolls out its bundled care arrangement with six hospitals for cardiac and spine surgery.

The retail giant is paying for the care, the travel, and the expenses entailed during travel for its employees and dependents.
The further away from an urban center a person lives, the more likely they are to travel further. For example, 35% of those polled who live in a rural area say they would leave the state for care. Javanmardian also hypothesizes that a person's willingness to travel also depended on their medical condition.

"I've seen it anecdotally," she says. "When people have cancer you'll see [them] go to Sloan-Kettering or MD Anderson, the places that have a brand."

Which care is bundled could become a competitive advantage, similar to the brand standing that hospitals have cultivated. Javanmardian says the advantage could be had by any stakeholder—physicians, hospitals, and payers, because half of those surveyed said they would switch hospitals and specialists if the cost of treatment were 10% less.

"Insurance companies who offer these kinds of products can position it in a market in a way that the consumers will understand it, and will get the choices that they need at an affordable or a competitive pricing. That's going to be the next step for the foundation of the beginning is just to create a bundle... and move from there," she says.

The survey is the first in a series Booz will release this year to quantify the interest in bundled payment arrangements. The company says it plans on talking to physicians, hospitals, payers, and employers.