We sat down with our CEO and Co-Founder, Dave Terry, to pick his brain about bundled payments and why he got into this line of work.
Let's start with the industry. What role do you see bundled payments playing in the future of healthcare?
Bundled payments are a key part of the movement toward value-based healthcare. If you think about ACOs, they are really focused on helping primary care physicians take control over the patient process and manage the health of the population they care for. But, bundled payments are focused on specialists. That's creating opportunity and accountability for specialists to improve the process, improve outcomes and reduce costs for their patient population.
We like to think of it this way: population health is about meeting the basic needs of a broad population, and bundled payments are about what happens when the patient gets sick and needs more specialty care. Bundled payments help us to proactively manage that process and episode for a patient that has a specific condition, put the appropriate specialist in charge of that process, and help that patient get better and get back home as quickly and safely as possible. It also helps them work with the best providers along the care continuum, improve outcomes and reduce costs.
Why do bundled payments work? Is it truly a win for all involved parties?
We do think bundled payments can create a win-win for all parties involved. From a patient perspective, it's certainly a win. When a patient has a specialty need, whether it's a hip replacement, spine surgery, or even a medical condition, it's best for a specialist who knows the most about that procedure being responsible for the patient's care. In a bundle, it creates new incentives and opportunities for the specialist to engage with that patient over the full course of the treatment, not just while they are doing the procedure or when the patient is in the office. We've seen better outcomes when the specialists are fully engaged throughout the full treatment period - patients get home faster, they ambulate faster, and they have a better experience.
We think this approach is also better for the specialist for a couple of reasons. There's increased satisfaction and autonomy over the process - not just performing the procedure but helping to see patients get better and staying with them through that process. You're understanding what's going on in the rehab setting, understanding what's really needed for the patient, and interacting with those patients. So, that autonomy and satisfaction increase among the specialists who participate in these programs. There's also financial reward for the specialists. When specialists do well in these programs, they can earn more revenue. So, yes, there's more engagement with the patients, and the revenue goes up as well.
From the payor's perspective, this greater engagement and greater interaction between the specialist and the patient translates into decreased overall costs. The patient gets home faster. They utilize less nursing home services. Physical therapy is more efficient. They ambulate faster. They get better faster. And, readmissions go down. So, we've seen dramatic decreases in costs from the payor's perspective.
Bundled payments are truly a win for all parties - patients, providers, and payors.
What advice would you share with practices on the fence about BPCI Advanced?
The first and most important piece of advice is to make sure you get on an application for the BPCI Advanced program by March 12. It's a non-binding application process from CMS. There's no commitment yet, but it gives you a lot of value.
First, it gives you the option to participate in the program when the model goes live October 1. And, second, maybe more importantly, it gives you access to your data. You'll get pricing information and four years of historical claims data. And, you'll get to do an informed assessment of what the program looks like for you and what the opportunities for improvement are to earn savings. Then, in the summer, you can decide if you want to participate or not. But, if you don't get on that application by March 12, you won't be able to get that information, and you won't be able to make an informed decision. Providers ask us if it's too late to begin the application, even now. From our perspective, it's not too late, and providers shouldn't hesitate to get started.
What drew you into healthcare as a profession?
I got into healthcare right out of college in the early '90s. I was interested in public policy and politics. But, healthcare has always been interesting to explore, particularly how we pay for healthcare and how we organize the system. It's always been a fascinating issue for me. Fortunately, I've been able to spend most of my career working on different reimbursement models and care and risk management programs like ACOs, capitation, pay-for-performance, and now bundled payments.
It just seems like there is so much opportunity for improvement, and it's a very important issue. And, I've always found it an exciting space to work in. My goal is to help find ways to make some improvements. We think bundled payments are an innovation in the payment world that makes a big impact on those improvements. It improves care. It improves the process both for the patients and the physicians.