Emerging Healthcare Value-based Payment Models: The Role of Bundled Payments

The health insurance industry in the United States is on a collision course. Current costs and payment models are unsustainable. There are gaps in care and variation of quality. Current payment models reward providers for the number of procedures performed rather than for the quality of care provided. In fact, lower quality of care may result in higher payments when factors such as hospital readmissions are considered. Health Payers are looking for ways to change their focus from claims payment to being more involved in patient care. This includes focusing on wellness, care management and looking for ways to share the risks involved in payment for services. This has led to the emergence of value-based contracting models. Plans are working to drive business outcomes because evolving regulatory mandates and market conditions are creating both challenges and opportunities. This new paradigm is creating a demand for critical thinking and foresight. The successful plan will use both to create a new type of healthcare system. Read this white paper to examine the advantages and disadvantages of the Bundled Payments reimbursement model as well as the considerations for entering into these contracts with your providers. March 2016.