Bundled Episode Payment and Gainsharing Demonstration Project (Text Version)

On September 27, 2010, Weslie Kary made this presentation at the 2010 Annual Conference. Select to access the PowerPoint® presentation (900 KB). Free PowerPoint® Viewer (Plugin Software Help).

Slide 1

Bundled Episode Payment and Gainsharing Demonstration Project

Agency for Healthcare Research and Quality
2010 Annual Meeting
September 27, 2010

Weslie Kary, MPP, MPH
Program Director
Integrated Healthcare Association

Slide 2

Overview

• What is bundled or "episode" payment?
• Why do it?
• IHA bundled episode and gain-sharing demonstration and evaluation plan.

Slide 3

What is bundled (episode) payment?

• A single prospective price for all services needed by the patient over an episode of care.
• Defined on parameters of time and services.

Image: Table showing things that might be included in a episode definition bounded by time and services, for example: pre-admission services including physician services, imaging, and drugs.

Source: Center for Healthcare Quality and Payment Reform, Transitioning to Episode-Based Payment (www.chqpr.org)

Slide 4

Why bundle? Problems with current payment options.

• Fee for service: rewards volume of services, not appropriateness or coordination of care.
• Global capitation: shifts too much risk to providers, creates incentive for risk selection.
• Pay-for-performance: when framed as quality bonus, does not move enough money.

Is bundled payment a workable compromise?

Slide 5

Some people think so.

PPACA....

• Expand ACE Demo, include post-acute care by 2013.
• Demonstrate in Medicaid population by 2012.
• Bundle payments in ACO.

Images: Representative organizations that believe bundled payment is a workable compromise, including CMS ACE Demonstration (the seal of approval that participants are allowed to use in marketing), a photo of the executive team of the Geisinger ProvenCare™ Health plan, a chart of the Prometheus Payment™ (another pilot program), and a photo of Congress, which approved an expansion of episode payment pilots in PPACA.

Slide 6

IHA Demonstration Project

• Focus: Major procedures and acute conditions, orthopedic first → cardiac and other.
• First participants: Monarch HealthCare, Cedars-Sinai, Hoag Hospital, Saddleback Memorial, Tenet, UCLA, Aetna, Blue Shield, CIGNA, HealthNet → all California.
• First populations: Commercial PPO → HMO, Medicaid Managed Care and Medicare Advantage.
• Episode definition: Date of surgery + 90 days, includes acute and routine follow-up, complications within 90-days, related readmits.

Slide 7

Demonstration evaluation

• What happened? Was model scalable? What facilitates success, what bodes failure? (RAND: Susan Ridgely, Peter Hussey)
• Was quality of care for orthopedic patients maintained compared to control hospitals? (U.C. San Francisco: Kevin Bozic, Steve Takemoto)
• Did efficiency go up, costs of care go down compared to baseline period? (U.C. Berkeley: James Robinson, Samuel Tseng)

More info: www.iha.org