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Dive into Bundled Payments or Wait?

Karen Minich-Pourshadi, for HealthLeaders Media, October 15, 2012

Bundled payments may be the reimbursement model of the future—but deciding if the "future is now" for your organization, or if you should wait until more of these models are tested, is a key strategic decision. In August, 21st Century Oncology, the largest radiation therapy provider in the nation and a cancer treatment network, announced it was pursuing a case rate reimbursement model with Humana for its radiation therapy services. Financial leaders should keep an eye on this specialty bundled payment model.

The decision of when to move forward with a bundled payment model isn't a simple one. At the recent HealthLeaders Media CFO Exchange in Kiawah Island, SC, I asked 18 of the nation's top financial leaders how far along their organizations were in the pursuit of bundled payment models. The response was mixed, but most had little in the works. Many leaders felt it was still too early for their hospital or health system and/or the payer's organizations to establish these agreements.

But a few hospitals were in the early stages, such as Trinity Health in Novi, MI. "We are applying for one of the bundled payment demonstration projects in one of our markets, but we don't yet know if we'll be chosen and how that will pan out," said Benjamin R. Carter, CPA, FHFMA, senior vice president and CFO at Trinity Health, who attended the CFO Exchange. Trinity owns 35 hospitals, manages 12 others, and has a vast network of outpatient, long-term care, home health, and hospice programs in 10 states. 

"We are developing accountable care networks and working hard at clinical integration, but we really don't have much in the way of risk-based contracts yet. We just don't know that we're ready yet to manage effectively in that space; we don't want to see the industry achieve the same outcomes it did in the late 1990s. We just don't want to repeat the same mistakes, so we are being cautious," Carter explained. "This work has really been a greater benefit to the insurance companies than to our system because we have a number of patients in our patient-centered medical homes, and they've been effective at reducing hospital utilization. At the same time, we do not have the benefit of a gainsharing contract."

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