Obstacles Remain in Path to Bundled Health Care Payments, Study Shows

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The transition to bundled health care payments remains several years away, with certain obstacles impeding progress in that direction, reveals a study by non-profit research organization Rand Corp.

The study involved an examination of the first three years the PROMETHEUS Payment Project, initiated by the Health Care Incentives Improvement Institute as one of several major efforts to test the concept of bundled payments. Undertaken in three communities--Crozer Keystone Health System-Independence Blue Cross in Pennsylvania, Employers’ Coalition on Health in Rockford, Illinois, and Priority Health-Spectrum Health in Michigan—the project was designed to demonstrate that bundling payments to physicians, hospitals, and other providers into a single payment would encourage all stakeholders to cooperate on the treatment of all aspects of particular procedures and diseases, while simultaneously eliminating unnecessary care.

However, the study shows that even three years following the project’s inception, no bundled payments had been remitted and no payment contracts for bundled payments have been executed. Researchers noted that such lack of progress underscores the challenges to be overcome by complex payment reforms despite the commitment to success demonstrated by all parties involved in the project.

"There is a tremendous amount of interest in this type of payment reform, but we found that transferring it into practice is extremely difficult.” Peter Hussey, the study’s lead author and a policy researcher at Rand, said in a statement. “The model is very complex, and the fact that it builds upon the existing fee-for-service payment system presents challenges."

He added that several different issues are slowing bundled payment adoption. Dissention as to which health problems should be included in a payment bundle ranks among items on the list. So, too, does the difficulty of convincing providers that the cutting-measures required in a bundled payment scenario would not compromise the quality of care afforded to patients.

“We did see some progress on many of these issues, so there are signs that progress on bundled payments may begin to accelerate,” Hussey noted. “Despite the difficulties we observed, it’s still an approach worth pursuing.”

Moreover, although bundled payments have yet to be made in line with the project, the study also points to significant changes made by participating providers. These changes include efforts to re-design the manner in which care is delivered while making providers aware of their ability to execute care delivery changes to both reduce cost and improve quality.

"The struggles of the PROMETHEUS participants are likely to help others adopt bundled payments more quickly in the future,” Hussey concluded.” But the transition to bundled payments is still likely to take years to occur.”