JANUARY 3, 2012

Welcome to the Bundled Payment Update eNewsletter
This issue is sponsored by Medical Home Summit

For Medicare, We Must Cut Costs, Not Shift Them
To address the root of the cost problem, Ezekiel J. Emanuel argues that we must change how we pay doctors and hospitals. He suggests that we must move away from fee-for-service payments to bundled payments that include all the costs of caring for a patient, thereby encouraging providers to keep patients healthy and avoid unnecessary services. (The New York Times - December 19, 2011)

Four Hard Truths About Bundled Payment
Success under bundled payments is predicated on visionary leadership, effective decision-making, and ultimately, practice grounded in the best available evidence. Healthcare organizations need to fully understand what it takes to make bundled payments work. Deidre Baggot goes on to list four important truths about Bundled Payments. (FierceHealthCare - December 13, 2011)

Horizon Blues Plan Teams Up With Providers on Bundled Payments
Blue Shield of New Jersey is partnering with five physician practices on a new method to pay for certain types of orthopedic procedures in an effort to improve insurer/provider relations as well as improve quality outcomes and control costs of joint replacements. "This is a collaborative relationship," Colleen Matthews, director of the episodes of care program at Horizon Healthcare Innovations (HHI), tells The AIS Report. (AISHealth - December 30, 2011)

State to try "Bundled" Health Care Payment Pilot Program
The State of Vermont and the Vermont Association of Hospitals and Health Systems recently submitted a letter of intent to the Center for Medicare and Medicaid Innovation to try different pilot programs that involve "bundling" payments. All hospitals throughout the state are involved in this measure in some way or another, although the specifics of which hospital will do which type of program are still up in the air. (vtdigger.org - December 11, 2011)

Johns Hopkins Enters Bundled Payment Deal with Pepsi
Johns Hopkins Hospital in Baltimore has entered into a bundled payment arrangement with beverage giant PepsiCo. Under the terms of the arrangement, Pepsi employees will travel to Johns Hopkins in Baltimore to undergo complex procedures, such as knee replacement corrections. The employees, about 250,000 in all, will have their co-payments and deductibles waived should they enter into such an arrangement. (FierceHealthFinance - December 13, 2011)

Point of View: Containing Costs Will be Main Driver in Health Care
Ashley Booth Norse is an emergency medicine physician and the 125th president of the Duval County Medical Society. In a speech she recently made she argues that valuable new payment models are on the horizon: Accountable Care Organizations, bundled payment models and "value-based" payment models based upon both outcomes and utilization. (The Florida Times-Union - December 18, 2011)

Five Health Care Issues To Watch in 2012
Regardless of the law's long-term future, a bevy of ACA cost-control pilots and quality-improvement initiatives will formally debut in the coming weeks. The sheer momentum of these initiatives could reshape how the industry pays for care. It should be a landmark year as several key programs -- the Pioneer ACO Model, the Shared Savings Program, the Bundled Payments for Care Improvement Initiative and the Health Care Innovation Challenge -- all launch across 2012. (California Healthline - December 21, 2011)

Governor Patrick Announces $26.75 Billion Medicaid Waiver Agreement
Part of this agreement includes the Pediatric Asthma Bundled Payment Pilot. This pilot will enable the Commonwealth to improve the quality and delivery of care a bundled payment methodology that includes services not traditionally covered, such as home visits by community home health workers and supplies for mitigating environmental triggers in the home. (Insurance News Net - December 25, 2011)

American Medical Association's Bundled Payment Resource

The AMA is developing a resource to help physicians become familiar with the new types of bundled payments that are now being contemplated.

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Episode Payment: Private Innovation and Opportunities for Medicare and Medicaid

Stuart Altman, PhD
Sol C. Chaikin Professor of National Health Policy, Waltham, MA