Who Needs a Public Plan When You Have Bundling?

We need to bundle payments so you aren’t paid for every single treatment you offer a patient with a chronic condition like diabetes, but instead are paid for how you treat the overall disease. We need to create incentives for physicians to team up – because we know that when that happens, it results in a healthier patient. We need to give doctors bonuses for good health outcomes – so that we are not promoting just more treatment, but better care.”

President Barack Obama's speech to the AMA, 15 Jun 2009

The public plan is likely to fail as intense competition against the proposal mounts, but given the relatively moot voice of physicians in the debate, bundled payment plans proposed by the President yesterday will be the hammer to drive cost savings.

An excellent article outlining the current limitations of any "bundling" proposal is published in HealthLeaders Magazine:

Essential to the administration's idea to reform healthcare payment is bundling, a way to reimburse disparate players in the healthcare marketplace for a basket of services provided to the beneficiary over a given time frame. In the proposal the president has floated in his budget, which is admittedly short on detail, a hospital might be responsible for a patient's welfare related to the procedure it performed for up to 30 days after discharge. If the patient requires rehospitalization during that time frame due to a condition related to the procedure, Medicare would not pay for it. Sounds good on paper, but implementing such a system is fraught with complexity. For example, if the patient's episode of care involves two, three, or more separate entities with no business relationships, how would one determine whose fault it is that the patient didn't do as well as expected and thus needed additional services? Is it any one provider's fault? Can blame be spread around? If so, how? What if a bad outcome is the patient's fault?

There are plenty of other problems they outline, too. Like when there's multiple comorbid conditions, which "bundle" will apply?

Or this quote: "The core issue is cash flow and how you divide the money."

Or how the patient cold become the bad guy in bundling schemes - even in ones that exist today:

Geisinger's guarantee is invalid if patients decide to use outside providers following discharge, for example. Certainly, Geisinger might have to change its model to reflect an "any willing provider" component to healthcare reform.

"If someone had their heart surgery here and developed a complication and then went to Philadelphia for care, that's not included in the bundle," says Paulus. "When people talk about accountable systems, it's not just the healthcare provider, it's the patient."

Hmmm. I wonder who pays in this circumstance?

Read the whole thing.

-Wes