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03-09-2012 | Article

Bundled payments may contain healthcare costs without affecting quality


Executive Summary

medwireNews: Bundled payments are unlikely to save insurers a bundle, but there is some evidence to suggest they could trim healthcare expenditures while preserving quality, says a government report.

Bundled payments - payments to providers based on predetermined predicted costs of providing a "bundle" or group of healthcare services - are touted by some reformers as a means of shifting the emphasis away from fee-for-service payments while maintaining the quality of care.

But can bundled payments shave costs while upholding high clinical standards? The answer is a definite "maybe," suggest Peter Hussey (RAND Evidence Based Practice Center, Arlington, Virginia and Boston, Massachusetts) and colleagues.

The introduction of bundled payment was associated with reductions in healthcare spending and utilization at the same time as having inconsistent and generally small effects on quality measures, says their report, published by the Agency for Healthcare Research and Quality (AHRQ).

"These findings were consistent across different bundled payment programs and settings but the strength of the body of evidence was rated as low due mainly to concerns about bias and residual confounding," they write.The authors examined 58 studies looking at 20 different bundled payment programs in the USA and other countries. Only one of the studies was randomized by provider, and none were randomized by patient.

The team found that transitioning from fee-for-service or cost-based payments resulted in a decrease in spending of 10% or less, depending on the program. The savings were often associated with 5% to 15% decreases in either length of hospital stay or in use of specific services.

Evidence regarding the effect of bundled payment interventions on quality was mixed.

"For a given bundled payment intervention, either some quality measures improved while others worsened or studies arrived at different conclusions about the effect of bundled payment on related quality measures. Little evidence was reported about other potential negative consequences of bundled payment, although studies of several programs noted that bundled payment programs resulted in shifts of utilization to other settings of care," Hussey et al write.

The authors caution that bundled payment systems may not work well in cases of rare diseases, those with multiple treatment options, or conditions for which there is no clear consensus on treatment regimens.

They call for additional research with stronger evaluation study designs using standardized measures of cost and quality, and stratification of results to help investigators better understand how bundled payments might affect specific groups of patients.

By Neil Osterweil, medwireNews reporter