Understanding The Impact Of Bundled Payments

With major changes facing the healthcare industry in the United States, many groups are considering bundled payments. This is a method used to reimburse healthcare providers based on the expected costs for episodes of care. It lies somewhere between the fee for service model most hospitals and physicians use today and capitation, where patients pay a lump sum regardless of the services that are provided. Some people are concerned about the effects that bundled payments will have on healthcare. Let’s take a closer look.

The effect on innovation.

Many experts are concerned that the use of bundled payments in the healthcare industry will restrict innovation in the field. Newer procedures will not be utilized as often because their cost will be prohibitive. This will cause less research and innovation to be created within the medical marketplace overall, and more doctors and patients will rely on older, less expensive treatments when a newer treatment may be the most effective.

Keeping up with the metrics.

The same experts are concerned there is no set of metrics that can keep up with the right information to determine how bundled payments will improve the medical marketplace and improve medical treatments overall. Without any previously known methods of providing healthcare in this way, there simply isn’t enough data yet to understand how it will actually affect the industry.

Focus on cost rather than treatment.

As stated, there are concerns about this process limiting innovation, but this will trickle down to affect the use of advanced treatments for patients. If the bundled payments reflect only the expected cost of treatments then doctors and patients are less likely to consider efforts that may prove to have long-term results in favor for treatments that cost less in the short term.

No incentive for improvement.

Because of these concerns, opponents of the bundled payment system are wondering what this will mean for the improvement of healthcare practices over time. When money is the primary motivator for both healthcare providers and patients, it can cause the market to become stagnant. This means that critical improvements to certain treatments may be overlooked in favor of cheaper offerings.

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