'Bundling' pay to doctors and hospitals is challenging

Studies in the journal Health Affairs looked at the concept of bundling payments to doctors and hospitals in which they are paid for "episodes of care" rather than for each individual treatment. The studies note the potential of such a move but also the difficulties.

Kaiser Health News: Capsules: Study Finds Potential, Challenges For Bundled Payments
Researchers reporting in Health Affairs on Monday found that, after adjusting for factors like the severity of illness, Medicare payments to hospitals differ by more than $7,700 for back surgery and $6,900 for hip replacement. In each case, that is a difference of more than 30 percent between the hospitals in the highest-priced group and those in the lowest-priced group. Two other surgeries – coronary artery bypass grafting and colectomy to remove all or part of the colon – had price differences of more than 10 percent between the least- and most-expensive (Torres, 11/7).

Modern Healthcare: Big Variations In Medicare Payments: Study
Medicare paid hospitals strikingly different amounts for the same surgeries across the U.S., even after factoring in higher costs in some areas and the severity of patients' illness, a new study found. The highest-paid hospitals received $2,500 to $7,750 more than the lowest-paid hospitals, according to an analysis of Medicare payment for hip replacement, coronary artery bypass graft, back and colectomy surgeries, once researchers adjusted for differences in geographic costs and illness (Evans, 11/7).

Politico Pro: Study High-Cost Hospitals Key To Big Savings
CMS could find big savings by reducing its payments to high-cost hospitals, according to a study published Monday in Health Affairs. A team led by the University of Michigan's David C. Miller added up all the payments made to providers surrounding an individual procedure like back surgery. It found that Medicare can pay some hospitals as much as 130 percent more than others for four common procedures (Feder, 11/7).

The Wall Street Journal: Study Raises Questions About 'Bundling' To Pay Doctors.
One of the fashionable suggestions for new-style (health system) payment is "bundling," in which providers typically get a set amount that is supposed to cover an episode of care – a surgery, say – or a disease state such as diabetes. The idea is that the set payment will push providers to avoid unneeded procedures, as well as to do high-quality work. ... But a new study published in Health Affairs raises questions about the feasibility of bundling (Wilde Mathews, 11/7).