Using Episode‐Based and Other Bundled Payments to Impro e Q alit of Care
Improve Quality of Care
AcademyHealth, June 2010
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Hoangmai Pham, MD, MPH
Center for Studying Health System Change
Center for Studying Health System Change
For any type of payment to motivate quality improvement….
Encourage coordination
Discourage underuse and overuse
Discourage underuse and overuse
Reflect clear lines of accountability among providers
Correspond with care “units” for which quality can be measured
• Linked to meaningful performance incentives
Be feasibly implemented on a large scale
• Be feasibly implemented on a large scale
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•
•
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…but not necessarily that…
but not necessarily that
• All services are affected
• Performance payments always coupled to Performance payments always coupled to
service payments
– Pay for services, separate reward for quality P f
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performance
– Pay for services, withhold for performance
– Set levels of service payment based on performance
Spectrum of bundling
Spectrum of bundling
• Full capitation
Full capitation
• Capitation for broad categories of services
– All physician services, all outpatient services
All ph sician ser ices all o tpatient ser ices
• Payment / time unit for all services related to single dx
– Usually for chronic conditions
– End‐stage renal disease bundle
• Payment for some/all services related to single episode of illness
– Acute or chronic (if clinically defined endpoint)
– Hip fracture, low back pain
Potential for bundled payments to encourage coordination?
• Concentrated responsibility
• Shared responsibility
Shared responsibility
• Flexibility for coordination tasks not currently reimbursed
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Potential of bundling to discourage underuse and overuse?
• Risk of scrimping higher
– But relatively broad set of standardized ways to measure (and then penalize) underuse
• Direct disincentive to overuse services
– Except potential to generate more bundles or episodes
– Only gross measurement tools available for detecting overuse
Does bundling reflect clear lines of accountability?
• Who receives payment for services
• Who receives reward for quality performance
Who receives reward for quality performance
• Degree of influence of that provider over the b h
behavior of other providers
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• Whether any of above is known at the start of the episode of care
Can quality be measured for “bundles”?
Can quality be measured for bundles ?
• Measures exist for many high prevalence bundles
– AMI, CABG, hip fracture, pneumonia
• Unclear start/endpoints for other bundles
– Chronic episodes
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– Confounding by access issues
• Imperfect risk adjustment at the level of episodes
Imperfect risk adjustment at the level of episodes
Potential for linkage of bundles to meaningful performance incentives?
• Zero‐sum game? Or new dollars from payer?
– Benchmarking issues
• Size of performance incentive relative to size of service payments (which will providers focus on?)
– Historical or normative levels of service payment?
• Number of bundles per provider
• Percentage practice revenue from a given payer
Percentage practice revenue from a given payer
Potential to implement bundled payments on a large scale?
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•
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Limits of relying on existing (claims) data
Prospective vs. retrospective measurement
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Prospective vs. retrospective payment
Possible vehicles in PPACA
 Possible, but not quickly
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Takeaways
• Episode and other bundled payments can better support QI than fee‐for‐service, but…
• Needs development of more quality measures (overuse, episode‐level), better risk adjustment
• Requires operational deftness to define bundles p ospect e y a d a o at e ay
prospectively and in a normative way
• Requires correcting price distortions in FFS, collaboration among payers
collaboration among payers