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Using a Bundled Payment Program to Improve Maternity Outcomes

Analysis  |  By Eric Wicklund  
   July 26, 2022

Vanderbilt University Medical Center has designed an innovative care management program that has helped Metro Nashville Public Schools save thousands of dollars and improve outcomes for its pregnant teachers.

A bundled payment program developed by Vanderbilt Health for the Metro Nashville Public Schools (MNPS) health plan saved more than $400,000 in its first year, while dramatically improving clinical outcomes for expectant teachers and their babies.

The success of the MyMaternityHealth program, says CJ Stimson, MD, JD, chief medical officer at Vanderbilt University Medical Center and Vanderbilt University Employee Health Plans, is based on the idea that patients and their care providers are a team.

"People don't feel like their health systems are going with them on their journey," says Stimson, who's also senior vice president of value transformation in VUMC's Office of Population Health. "So we told them we'll take all the risk."

Bundled payment programs were once considered the future of healthcare and the foundation for value-based care, but there have been just as many failures as successes. In their most basic form, they assign a certain payment that a care provider will receive from a payer for a care path, such as surgery or acute care treatment. The care provider creates a treatment plan based on the knowledge that they will be paid that one amount, accepting the risk that treatment won't become complicated and cost more than what was paid.

The program compels providers to focus on improving outcomes and ensure that each treatment offers value. And it creates an incentive for trying new strategies that reduce costs and boost outcomes.

Stimson, who spent several years as an advisor to the Center for Medicare & Medicaid Innovation, which defined Medicare's bundled payment strategy, says the program gives care providers the freedom to map out how they want a treatment plan to work.

"Our providers were the ones who really designed that clinical experience," he says. "It really kind of liberated them."

CJ Stimson, MD, JD, chief medical officer at Vanderbilt University Medical Center and Vanderbilt University Employee Health Plans and senior vice president of value transformation in VUMC's Office of Population Health. Photo courtesy VUMC.

In this program, providers are given the freedom to follow their care plan without, as Stimson puts it, "asking for permission all the time."

"How you pay for care matters," he says. "This changes how you deliver care. You throw out all the old payment rules and start with a clean slate, and you design the best patient experience that you can."

The program recently earned a KLAS Research Points of Light Award for Vanderbilt Health and Cedar Gate Technologies, which provided the technology infrastructure that allows Vanderbilt to gather and track data and manage their patient population. According to KLAS, the award "celebrates success stories—or points of light—from payers, providers, and healthcare technology companies that work collaboratively to align care delivery with health plan sponsor initiatives to reduce inefficiencies and improve the patient experience."

Stimson says he'd initially proposed musculoskeletal care as an ideal service for a bundled payment plan, but the MNPS health plan suggested maternity care. The health plan was seeing high rates of C-sections and neonatal intensive care unit (NICU) services, two expensive services that are sometimes linked to a lack of preventive care or gaps in maternity care.

The key to an effective bundled program, he says, lies in the data. Care providers need that information to map out a care management plan that anticipates needs before they occur and reacts to trends before they develop into concerns.  

"Predictability is important," he says. With that data in hand, providers have a better chance of identifying gaps in care and correcting them, or recognizing that a certain patient may be trending toward a complicated birth and putting resources in place to ease those complications.

Vanderbilt and the MNPS health plan have seen some measurable results since launching the bundled payment program. The c-section rate dropped from 40% to 29%, a 25% reduction over the historical marketplace experience, while NICU spending decreased about 16% in the first year. That amounted to about $400,00 in savings during that first year, alongside an increase in healthy births and a Net Promoter Score in the 90th percentile.

In addition, the program removed out-of-pocket costs for patients, saving each mom-to-be as much as $2,500.

"That's a significant savings," Stimson says. And it's a key metric for this population. Eliminating those out-of-pocket costs reduces stress on new or soon-to-be mothers and their families, taking away a factor that can lead to complex or complicated births and healthcare challenges.

Stimson says the program works because it eliminates one of the biggest hassles in care—who pays for what and when—and gives patients and their care providers the freedom to focus on care. And with data in hand from their technology platform, care teams are more confident in knowing how each patient is doing and can spot trends before they become concerns. Patients, meanwhile, get help when they need it, and are encouraged to follow doctor's orders and maintain healthy habits.

Vanderbilt now has several bundled payment programs up and running: Total joint, spine, bariatric, and cochlear implant services were launched in 2021, and medical weight loss, osteoarthritis, and shoulder pain were added this year. Across these bundles, the health system is seeing roughly 250 enrollments per month so far in 2022.

"We want to keep expanding our portfolio to other service lines," Stimson says.

He'd also like to introduce more telehealth and digital health services, even remote patient monitoring, to create what he calls a "care package" around patients. There might also be room for care navigators to help patients identify and access healthcare services and additional resources.

And he'd like to show off the program to other health systems and explain how it works.

"We don’t have it all licked," he says. "These programs only work if everyone is on board … but this proves that [bundled payment programs] can make a difference."

“How you pay for care matters. This changes how you deliver care. You throw out all the old payment rules and start with a clean slate, and you design the best patient experience that you can.”

Eric Wicklund is the associate content manager and senior editor for Innovation, Technology, and Pharma for HealthLeaders.


Bundled payment programs, which give care teams a set amount of money to manage a care path, such as surgery or maternity care, have so far had mixed reviews.

Vanderbilt University Medical Center designed its bundled payment program with the Metro Nashville Public Schools health plan to address high C-section rates and NICU costs, putting clinicians in charge of the care plan and eliminating out-of-pocket costs for the teachers.

In its first year the program cut C-section rates and NICU costs, improved clinical outcomes, saved more than $400,000, and earned an award from KLAS for its emphasis on value-based care.

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