Bundling payments to cut health costs proves difficult to achieve, study finds
While there is considerable interest in bundling payments to health care providers to encourage them to cut costs, putting the strategy into practice is proving to be more difficult than anticipated.
That's the lesson being drawn from a new RAND Corporation study that examined the first three years of a major effort designed to test the bundled payment approach to health care financing.
Under bundled payments, doctors, hospitals and other health providers share one fee for treating all aspects of a procedure such as a hip replacement or a chronic disease such as diabetes. The approach is intended to encourage health providers to work together to eliminate unnecessary care and improve quality.
But three years after the PROMETHEUS Payment project was launched in three U.S. communities to test this approach, no bundled payments had been made and no payment contracts for bundled payments have been executed. Although all parties involved with the effort are committed to its success, researchers say the slow progress underscores the challenges such complex payment reforms must overcome.
"There is a tremendous amount of interest in this type of payment reform, but we found that transferring it into practice is extremely difficult." said Peter Hussey, the study's lead author and a policy researcher at RAND, a nonprofit research organization. "The model is very complex and the fact that it builds upon the existing fee-for-service payment system presents challenges."
The findings are published in the November edition of the journal Health Affairs.
Researchers say that adoption of the bundled payments approach was slowed by both technical and cultural difficulties.
Technical issues included deciding what health problems should be subject to bundled payment and providing health providers with the information needed to improve medical care. Cultural issues included convincing providers that cost cutting measures will not reduce the quality of medical care.
"We did see some progress on many of these issues so there are signs that progress on bundled payments may begin to accelerate," Hussey said. "Despite the difficulties we observed, it's still an approach worth pursuing."
Interest in bundled payments as a strategy to control health care costs has grown since adoption of the Affordable Care Act, which encourages the approach. In August, federal officials announced a voluntary national Medicare bundled payment initiative.
The RAND study evaluated the progress made during the first three years of the PROMETHEUS Payment program, a major pilot of bundled payments conducted by the nonprofit Health Care Incentives Improvement Institute.
Supported by the Commonwealth Fund and the Robert Wood Johnson Foundation, the effort designed a bundled payment program and recruited insurance providers, self-insured employers and health care delivery organizations in three communities to pioneer the approach. The sites are Crozer Keystone Health System-Independence Blue Cross in Pennsylvania; Employers' Coalition on Health in Rockford, Illinois; and Priority Health-Spectrum Health in Michigan.
Participating groups received technical support from the Institute, but are not paid to participate in the pilot. Each of the organizations is primarily responsible for agreeing on the details of the payment method, engaging the frontline physicians and other health care staff, and implementing strategies to improve medical care.
RAND researchers collected information from participating groups from 2009 to 2011, both through telephone interviews and by visiting each of the three pilot sites.
While researchers found that none of the three sites had made bundled payments as of May 2011, the effort had still prompted important changes among participating health providers. Those included triggering efforts to redesign care and making providers aware of their ability to change health delivery to reduce costs and improve quality.
"The struggles of the PROMETHEUS participants are likely to help others adopt bundled payments more quickly in the future," Hussey said. "But the transition to bundled payments is still likely to take years to occur."
Provided by RAND Corporation
- Survey finds widespread dissatisfaction with current health care payment system Nov 03, 2008 | not rated yet | 0
- Study outlines strategies to test new payment models for health care Sep 29, 2009 | not rated yet | 0
- Can payment and other innovations improve the quality and value of health care? Jan 27, 2009 | not rated yet | 0
- Trimming US health care spending will require new approaches, study finds Nov 11, 2009 | not rated yet | 0
- Physicians can lead health care reform through payment and delivery system reforms May 20, 2009 | not rated yet | 0
- Motion perception revisited: High Phi effect challenges established motion perception assumptions Apr 23, 2013 | 3 / 5 (2) | 2
- Anything you can do I can do better: Neuromolecular foundations of the superiority illusion (Update) Apr 02, 2013 | 4.5 / 5 (11) | 5
- The visual system as economist: Neural resource allocation in visual adaptation Mar 30, 2013 | 5 / 5 (2) | 9
- Separate lives: Neuronal and organismal lifespans decoupled Mar 27, 2013 | 4.9 / 5 (8) | 0
- Sizing things up: The evolutionary neurobiology of scale invariance Feb 28, 2013 | 4.8 / 5 (10) | 14
Classical and Quantum Mechanics via Lie algebras
Apr 15, 2011 I'd like to open a discussion thread for version 2 of the draft of my book ''Classical and Quantum Mechanics via Lie algebras'', available online at http://lanl.arxiv.org/abs/0810.1019 , and for the...
- More from Physics Forums - Independent Research
More news stories
Research shows that the earlier the age at which youth take their first alcoholic drink, the greater the risk of developing alcohol problems. Thus, age at first drink (AFD) is generally considered a powerful predictor of ...
Health 12 hours ago | not rated yet | 0
One quarter of British lawmakers believe there is an "unhealthy" drinking culture in the Houses of Parliament, according to a survey published on Friday.
Health 18 hours ago | not rated yet | 0
Researchers at the University of Cincinnati (UC) have found that the race and sex of study personnel can influence a patient's decision on whether or not to participate in clinical research.
Health 18 hours ago | not rated yet | 0
The processes to allow people to self-manage their own illness are not being used appropriately by health professionals to the benefit of their patients, new research suggests.
Health 19 hours ago | not rated yet | 0
Control of heart disease risk factors varies widely among outpatient practices, according to a study presented at the American Heart Association's Quality of Care and Outcomes Research Scientific Sessions 2013.
Health 20 hours ago | not rated yet | 0
Big names in medicine are set to give an upbeat assessment of the war on AIDS on Tuesday, 30 years after French researchers identified the virus that causes the disease.
3 hours ago | not rated yet | 0
For combat veterans suffering from post-traumatic stress disorder, 'fear circuitry' in the brain never rests
Chronic trauma can inflict lasting damage to brain regions associated with fear and anxiety. Previous imaging studies of people with post-traumatic stress disorder, or PTSD, have shown that these brain regions can over-or ...
4 hours ago | not rated yet | 0 |
The neural machinery underlying our olfactory sense continues to be an enigma for neuroscience. A recent review in Neuron seeks to expand traditional ideas about how neurons in the olfactory bulb might encode information about ...
15 hours ago | not rated yet | 0 |
(Medical Xpress)—What if the quality of your work depends more on your focus on the piano keys or canvas or laptop than your musical or painting or computing skills? If target users can be convinced, they ...
16 hours ago | 3.7 / 5 (3) | 0 |
In 2008 researchers from the University of Southern Denmark showed that the drug thioridazine, which has previously been used to treat schizophrenia, is also a powerful weapon against antibiotic-resistant bacteria such as ...
13 hours ago | 3.7 / 5 (3) | 0 |
In order to avoid harms associated with alcohol consumption, in 2009 the National Institute on Alcohol Abuse and Alcoholism issued guidelines that define low-risk drinking. These guidelines differ for men and women: no more ...
13 hours ago | not rated yet | 0 |