Was the goal of the Affordable Care Act (ACA) to free up $1 trillion dollars for tax reforms? Was the goal to improve access to care by providing universal healthcare coverage for all Americans? Or was the goal to make healthcare better?
Principally inspired by the ACA, in May 2018 United Healthcare announced its intent to expand its spine surgery bundled payments program from 28 markets to 37 markets. United Healthcare has seen a 22 percent decline in readmission rates, a 17 percent reduction in complication rates, and cost reductions totaling approximately $3,000 per case in the spine surgery population after implementing bundled payments. These findings are not unique, in fact they are very consistent with the growing body of literature to support bundled payments as a viable alternative to fee-for-service, which is costly and incentivizes duplication and waste. Additionally, later this year hundreds of hospitals and doctors will commence participation in the Centers for Medicare and Medicaid Services’ Bundled Payments for Care Improvement Advanced program. Employer sponsored bundled payment programs continue to evolve with both national and regional employers.
In America the average life expectancy is 80-plus years, nearly 30 years longer than a century ago. Medical progress in the United States has been undeniable. We have reduced infant mortality rates twenty-fold and we tackled the biggest killer of women—child birth, virtually eliminating child birth-related deaths over the last century. Similarly, in the area of payment reform, between 2012 and 2016 the percent of CMS payments to providers caring for patients in Alternative Payment Models (APMs) went from 0 percent to 30 percent, representing $200 billion dollars. Despite this progress and paying nearly double than other wealthy nations for healthcare, in 2018 health outcomes are still unreliable at best. In fact, medical errors today represent the third leading cause of death in the United States after heart disease and cancer.
While we are often quick to point to the complexity of the U.S. healthcare ecosystem as the root cause, it doesn’t fix the fact that two million Americans will get a hospital-acquired infection this year. It also doesn’t fix our lack of understanding as healthcare providers of just how addictive opioids are, which has been a major factor contributing to the opioid epidemic in America.
While there are major areas where we have made progress, the great opportunity today for board members and senior executives is to support and resource efforts that augment front-end discovery with systems innovation and the science of process engineering on the back end.
This post was originally published in a special section for the Governance Institute, under the title, “The 21st-Century Patient Is More Complicated but the Remedies Don’t Have to Be: How Bundles and Other Innovations in Healthcare Payment Are Offering New Promise for Care Delivery,” by Deirdre M. Baggot, Ph.D., M.B.A., RN.
 Centers for Medicare & Medicaid Services (CMS), “Alternative Payment Models (APMs) Overview,” 2017 (available at CMS.gov).