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NJ Bundled Payment Approach Better for Physicians than Mandatory Federal Program

By Christopher Cheney  
   October 19, 2015

Changing the Dynamic Between Provider and Payer

For bundled payments to be successful at physician practices, "there's real transformation that has to occur," Brillstein says. Horizon urges physician practices to embrace episode-of-care payment contracting, data-sharing, and best practices for quality and care management, and to post positive clinical outcomes. "It's quite remarkable. We really are changing the dynamics between two sparring partners."

Horizon's bundled-payment contracts feature upside risk only, quarterly retrospective reporting and reimbursements, patient stratification, and efficiency-promotion measures. "Invariably, there are savings to be found," she says, noting that standardization and optimization lower costs.

Horizon's oncology bundle has a sophisticated patient-stratification mechanism out of necessity, she says. "In cancer, it can be very different if you are Stage 1, Stage 2, or Stage 3. [Cost of care also] depends on the kind of the tumor. It's biomedical stratification."

Horizon is set to launch monthly respective reporting by the end of 2015. "We're very close to it."

Finding the Triple Aim in Bundled Payments

Horizon's bundled-payment contracts for hip and knee replacement exemplify how value-based payment models can be crafted economically and benefit patients, Zabinski says.

"Patient satisfaction and quality care is aligned with cost reduction. … The better a patient is prepared for surgery, the better the clinical outcome. There is improved surgery technique and decreased complications. You can increase quality, increase patient satisfaction, and decrease costs all at the same time."

Value-based payment models have the potential to improve the historical shortchanging of U.S. patients, he says. "Our health system has been tremendously wasteful. [The healthcare industry has provided] suboptimal care at high cost. In the cases of CHF and diabetes, these conditions have not been managed the way they should be managed."

Horizon views bundled-payment contracting as a step forward for the healthcare industry and patients alike, Brillstein says. "It's more like managed care was meant to be: collaborative."

Christopher Cheney is the senior clinical care​ editor at HealthLeaders.


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