By CHASE HENSEL, MedCity News – June 15, 2017
Despite pressure on hospitals to reduce readmissions and studies showing that patients who are supported after leaving the hospital are better equipped to self-manage, care continues to be disjointed, leading to poor outcomes for patients, and higher costs for hospitals.
Can bundled payments serve as a solution? For certain conditions, yes. Orthopedics is pioneering this new kind of payment model and if proven successful, other complex conditions and diseases could apply these best practices to improve health and reduce costs, too. 
Bundled payments to initiate better coordinated care
The Bundled Payments for Care Improvement initiative (BPCI) was launched by Centers for Medicare & Medicaid Services (CMS) to support the transition to value-based care by developing a Medicare payment system that emphasizes quality instead of quantity. Essentially, this system links payments for a myriad of services patients receive during an episode of care, as opposed to making separate payments to providers for a single illness or courses of treatment.
Holding the provider financially accountable for patient outcomes leads to higher quality of service and increased collaboration between care teams. According to CMS, “Research has shown that bundled payments can align incentives for providers—hospitals, post-acute care providers, physicians, and other practitioners—allowing them to work closely together across all specialties and settings.” The hope is that this leads to lower spending, improved care and a better overall experience for patients.
As the transition to value-based care advances, bundled payments are gaining momentum, particularly in orthopedics where the CMS instituted the Comprehensive Care for Joint Replacement (CJR) initiative? A mandatory bundled payment program for total hip/knee replacements that is pioneering more innovative payment and healthcare delivery models. Risk-sharing models for example, which reimburse based on the success of treatment goals, provide an incentive for all stakeholders including the device manufacturer to work cohesively throughout the entire episode of care. Creating mutual accountability for benchmarks (such as reduced costs and improved patient outcomes) ensures all parties are working towards the same endgame.