Value-Based Care News

How Payers Could Meet Employer Needs in Bundled Payment Models

The adoption rate of bundled payment models is growing among healthcare providers, but employers are seeking bundles for managing chronic conditions.

By Vera Gruessner

While the number of bundled payment models adopted by hospitals and payers is growing, implementation of value-based care is an innovative and modern idea that many healthcare providers are still unfamiliar with. For instance, bundled payments for chronic conditions have not proliferated the market as of yet.

Value-Based Care Reimbursement

Health payers can address these problems by bringing their resources to the table, sharing claims data, and being more proactive in working with providers to adopt bundled payment models, said Anne Wong, Director and Researcher from PwC.

“I think payers can bring their resources to help push out bundles to providers,” Wong told HealthPayerIntelligence.com. “The payer would have to work with providers willing to figure out a diabetes bundle and willing to share claims data with that provider. Also, providing actuarial resources is useful.”

“It includes thinking through what is needed in a bundle and bringing that to a provider with a background in knowing what employers want,” Wong continued. “Actually, testing what employers would want in some fashion is helpful. I think it’s all about the payers being proactive with the providers they work with to convince them and strongly suggest that these kind of things would be a good idea and then provide resources to actually work with them jointly on bringing bundled payments to market.”

A survey from PwC outlined some problem areas for bundled payment models within the healthcare delivery system. While employers are looking to expand the use of bundled payments such as incorporating them in managing chronic conditions, hospitals have kept their implementation of bundled payment models on a smaller scale with a focus on acute care.  

“Bundles are very new and, therefore, can be quite onerous to make happen. Therefore, they’re not widespread. Most hospitals or health systems offering them have one or two or three bundles, but it doesn’t cover significant amount of spend,” Wong explained. “One of the things that payers that get more involved could do is anything that helps a health system to scale the number of bundles quicker. That can include providing more administrative or technical solutions so that administration can be done less manually.”

“Right now, most of the time, administration is being completed with Excel spreadsheets and a lot of dedicated resources. That’s not the best solution going forward,” she continued. “Payers could also help by coming up with agreed upon definitions of bundles including what’s going to be in and what’s going to be out. The biggest help is aggregating employer demand so that what hospitals are trying to do is actually relevant for employers. Being that industry aggregator rather than leaning toward hospitals is important.”

While consumers report being dissatisfied with cost, health outcomes, and a lack of price transparency, bundled payments would address these concerns. However, the survey shows 69 percent of polled consumers are unfamiliar with this reimbursement structure.

“I think largely consumers are not aware of bundles,” Wong pointed out. “In our survey, we found only 31 percent of consumers were aware of bundles. I would say even though we’ve seen adoption is higher, many consumers don’t know they are part of it.”

It would benefit healthcare delivery if payers provide education and materials to consumers about bundled payment models, said Wong.

“Payers can help educate consumers on what bundles are and how bundles can be beneficial to them,” Wong continued. “Overall, there are a lot of things that bundles try to solve that consumers are not satisfied with. For instance, it resolves the multiple or unexpected bills that a patient receives. Often these bills are confusing or unexpected. When an individual goes in to have a baby, they can receive six different bills from the different providers they see.”

“The fragmentation of care - the fact that your clinicians in the hospital don’t always connect with the clinicians you see in the post-acute setting - are theoretically solved by bundles,” Wong said. “Consumers are satisfied with what bundles would solve in their best form.”

Wong explained how the bundled payment model could cut down multiple medical bills that consumers receive from various healthcare providers and face only one or two medical bills after receiving an episode of care.

The survey does show that 31 percent of providers and 20 percent of employers adopted bundled payment models since 2015. This shows that adoption of this alternative payment structure is rising and, with more assistance from payers, bundled payments should become a staple in healthcare delivery over the coming years.

“We’re seeing a growing trend of adoption that has continued to increase year over year,” Wong pointed out. “For us to believe in the promise of bundles, it’s encouraging to see when we go out into the market that there is greater adoption among providers. This is a very positive finding and one that we’re excited to see.”

When it comes to adopting bundled payment models and overcoming the challenges of value-based care reimbursement, Wong advised how to create a successful bundled payment contract.

“I think a very important step would be coming to an agreement on what bundles are going to go after - what clinical areas the bundles will manage such as acute or chronic conditions,” Wong continued. “Then starting to come up with a guiding principle on how to define them also matters. That will define the risk level a provider takes on and it defines for the payer what sort of benefits they receive.”

“Between the payer and the provider, that’s one of the biggest area they have to work together on,” she concluded. “Another thing is figuring out how the bundle will be priced. Is it a matter of looking at all of the claims that have historically been done? Is it assuming you could reduce costs by a certain amount? Is it going to be an upfront discount or a shared savings at the backend? This is another really important part of the contracting process. First, payers need to figure out which bundle, what will be included in the bundle, and then how they will price it and share the value.”

Image Credits: PwC

 

Dig Deeper:

How to Overcome the Challenges of Bundled Payment Models

3 Key Steps for Payers to Succeed in Value-Based Care Payment