Posted on July 14, 2014

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Larry Bernard, NEHI

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Experts See Bundled Payments as an Opportunity,
But Highlight the Need for a Multi-Sector Approach

Health care panelists see risk to innovation 

WASHINGTON, DC (July 14, 2014) – Use of bundled payments in the U.S. health care system is likely to expand over the next several years as Medicare, commercial insurers, and large employers push the bundling of health care services into new fields, according to experts gathered here last week.

A panel of experts convened by NEHI (Network for Excellence in Health Innovation) agreed on these and related findings at a panel discussion in Washington, DC, on July 10. The NEHI session focused on the likely impact of “bundling” payments on the development and adoption of health care innovation. 

Currently, bundled payments are focused mostly on acute care-related procedures, such as orthopedic and cardiovascular procedures, but experts agreed that bundles eventually will be created around services for chronic care as well.

“In Arkansas, bundled payments are a tool for thepatient centered medical home to become successful,” said Steve Spaulding of Arkansas Blue Cross Blue Shield. Other experts agreed, pointing to the opportunity for bundles to one day be managed within accountable care organizations. Bundled payments is an increasingly common method in which payments to health care providers are the predetermined expected costs of a group, or bundle, of related health care services.

Early use of bundled payments show promise for generating greater efficiency in health care delivery and reduced health care costs. But panelists identified several potential risks, among them, an erosion in patient care quality if bundles encourage underuse of services. As a result, development of appropriate quality metrics is needed to encourage good care.

Further, experts agreed that bundled payments could inhibit innovation in medical products, including early stage research and investment, unless bundled payment policy is flexible enough to encourage demonstration of new innovations and their absorption into practice.

The NEHI  panelists stressed that accurate, comprehensive quality metrics were necessary for bundled payments to allow innovations to flourish.  Among the concerns they cited: Industry will not invest in future innovation if their products are not used in a bundle and there is a lack of clarity around reimbursement.

The development of patient-centered quality metrics should encourage innovation, but experts remain concerned that the pace of development and validation of new measures will not keep pace with technology.  

“We need to continue to develop accurate quality measures and create opportunities for carve-outs to account for medical advancement,” said Jeffrey Binder, CEO of Biomet.

Panelists agreed that all players, especially  patient advocates, need to be at the table to ensure quality metrics are appropriately formulated. In this new era, they explained, innovators such as drug and medical device manufacturers will be more active players.

Molly Burich of Otsuka America Pharmaceuticals highlighted the willingness of Industry to be involved. “It is important to have a multi-stakeholder approach to evolve quality metrics alongside bundled payments,” she said.

The July 10 session, “Innovation in an Era of Payment Reform: How Will Bundled Payments Impact Innovation?” was the second of three sessions in a NEHI series on innovation in payment reform. Speakers were: Deirdre Baggot of The Camden Group; Jeffrey Binder of Biomet Inc.; Trisha Frick of Johns Hopkins Healthcare; Ryan Hohman of Friends of Cancer Research; Bob Ihrie of Lowe’s; Dr. Juan Reyna of LUGPA Integrated Practices; Steve Spaulding of BlueCross BlueShield of Arkansas; and Molly Burich of Otsuka America Pharmaceuticals.



About NEHI
NEHI (Network for Excellence in Health Innovation) is a national health policy institute focused on enabling innovation to improve health care quality and lower health care costs. In partnership with members from all across the health care system, NEHI conducts evidence-based research and stimulates policy change to improve the quality and the value of health care. Together with this unparalleled network of committed health care leaders, NEHI brings an objective, collaborative and fresh voice to health policy. Follow us on Twitter at @NEHI_News, on Facebook at NEHINews, on our company page on LinkedIn and on Google+


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