Implementing Bundles: Big Gains with Relatively Simple Fixes

Why is it that while some organizations seem to be drowning in the complexity of knowledge that exists today, others are making big gains with relatively simple fixes?

Since 2012 with the launch of CMS’s largest test of bundled payments, hundreds of organizations have learned first-hand the powerful cultural shift that occurs as a result of implementing new payment models. Qualitative and quantitative analyses of programs succeeding with bundles reveals several key similarities among participating sites.

Keep it simple. The population, strategy, approach, plan, execution, and evaluation should be as straightforward as possible while you scale up your competency to manage clinical and actuarial risk. Keeping it simple also applies to the population under consideration. The most predictive factor in managing total cost of care for an episode or patient or population is the number of care transitions. Patients who are cared for at home pose much less clinical and actuarial risk as compared with patients who access post-acute care.

Take an accurate diagnostic of your organization’s strengths and weaknesses. When it comes to managing clinical and actuarial risk, having a good understanding of strong and weak areas will inform your path forward. Most organizations think they understand where clinical and cost variation exists but struggle to get after the why of clinical and cost variation. The winning strategy is to deeply understand what your organization is good at or find out who is good at whatever it is that you aspire to be. The diagnostic informs what is needed or missing and ultimately informs the care model necessary to drive superior quality and ensure your success with APMs.

Be smart about the investment. Both over- and under-investing have their consequences. A strategic approach to outpacing Goliath requires smart investments, given the real truth that technology is not there yet and EHRs have not been the panacea we all thought we were buying. Having studied more than 60 value-based payment technologies and solutions over the last 10 years, my assessment is that most are still in the MS-DOS phase of their evolution. Telemedicine, apps, care redesign, and the infrastructure to manage big data tend to be the areas of investment most organizations make at the outset. Make sure your investment makes sense for the market and the population under consideration.

Consider strategic value partnerships.There are several areas today where strategic partnerships are the difference between rapid market entry and new revenue growth and the alternative. The number one cause of death both in the United States today and the world is high blood pressure. One billion people worldwide suffer from hypertension and yet only 14 percent of individuals with high blood pressure have it diagnosed and under control. The medications that control high blood pressure have been around for decades and cost pennies on the dollar. However, with few exceptions, our delivery system has one way in which you can control your blood pressure: make an appointment and go into a physician’s office for an in-person visit with a provider. In most cases, this is the only way the provider will work with you. Does a doctor really need to be involved every few weeks or can a patient text with his or her nurse or health coach to manage this condition?

Evaluate your strengths and gaps with respect to managing total cost of care. For example, what partnerships are needed for your organization to better manage the cardiac population? What technologies, systems innovation, analytics, contract management, and care management solutions or partners would give you speed to market?

The volume of knowledge and skill in healthcare and medicine today has exceeded human capability. You simply can’t know it all, which is why the role of Alexa, AI, and other emerging system innovations offer new hope for improving health outcomes in America. While technology continues to emerge, doctors, nurses, social workers, and health coaches—who figured out long ago that computer systems don’t break down silos—are identifying their gaps, finding partners, and quietly dividing and conquering, causing a revolution along the way.

Make sure patients are empowered and accountable co-creators of their health experience. Measuring and delivering what an empowered patient truly wants and needs hasn’t been something providers have been very good at historically. In any value-based care model, the ways in which providers have engaged (or not engaged) with patients in the past makes for an untenable path forward. A hospital in Boston, against the guidance of its legal counsel, pioneered the concept of “Open Notes” whereby patients were allowed full access to read and edit their medical record. The findings have surprised many administrators and providers. Patients are more engaged, and these highly engaged patients have assisted in the reduction of medication and other errors in their EHR.

Put in the hours and follow the evidence. For several years, I have written about the importance of following the evidence when it comes to bundle selection. Programs that are succeeding first and foremost are doing so because they have committed the time and resources to building the muscle necessary to manage total cost of care for a bundle. Selecting bundles and APMs that have been well studied and are well supported will ensure that your move to risk-based care delivery won’t break your organization.

Recently I read an article where the author categorized several disease conditions based on “high risk” and “high reward.” The author put forth, for example, that sepsis is an episode of care that is both high risk and high reward. But sepsis is only high risk given its low price point, relatively small sample size for most organizations, and the complexity of the patient. In addition, the literature to support that bundles work in the sepsis population is nearly nonexistent. Alternatively, the impact of primary care on reducing unnecessary readmissions in the congestive heart failure population is clear. Make certain that your approach to new payment models is evidence-based.


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.


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