Commercial Bundled Payment is Working, Don't Fall Behind

A recent article in Health Leaders Media highlights the success of the Horizon BCBS New Jersey bundled payment program. Horizon has designed a highly effective commercial bundled payment program and a local orthopedics group has published their successful results in the Journal of Arthroplasty. The success of the program shows that progressive payers and providers can both gain in episodic payment systems in the commercial insurance industry. The article emphasized a few key points for payers thinking about partnering with physicians in the commercial space.

  • Talk to the docs! Make sure to work with physicians before implementing. We find that docs know exactly how and where to save money and improve the quality of care, but they need the right set of tools to make it work for both parties.
  • Allow efficient providers to succeed. One weakness of the BPCI design is that it effectively penalizes providers that were delivering efficient care before the program was implemented. Efficient care is what bundled payments are designed to incentivize. Allowing providers to beat regional benchmarks provides better incentives for effective practitioners to participate. Don't worry about paying for what "you are already getting". The physicians will find additional areas of savings. They always do.
  • Help physicians manage the risk. CMS rolled out CCJR with hospitals precisely because they were afraid of imposing that much risk on physicians. Well-designed bundled payment programs can protect physicians from large downside risk in a variety of ways including (but not limited to) using conveners, risk stratification, outlier caps, and risk corridors.

CMS has done a great job bringing bundled payments into the market but there are some areas upon which commerical payers including health plans, self-funded employers, unions and ACOs can improve. It's important to start building relationships with your physicians now. Rest assured that someone else already is!