Posted on November 13, 2014


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Larry Bernard, NEHI
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 Bundled Payments Increasingly Common, But Medical Innovation May be at Risk: New Issue Brief

 CAMBRIDGE, MA (November 13, 2014) – The use of bundled payments in the health care system is increasing for a variety of medical procedures, but their use has potential for stifling medical innovation, according to a paper issued today by NEHI (Network for Excellence in Health Innovation).

 “There must be some mechanism within bundled payment arrangements to encourage adoption of new and proven technologies into routine practice,” said Rebecca Paradis, NEHI senior policy associate and co-author of the report.

 Such mechanisms might include carve-outs, add-on payments, or other clearly defined mechanisms for clinicians to tailor treatments to patients’ individual needs when predefined clinical guidelines are insufficient, according to the paper.

 Bundled payments, which requires a single payment for a group of related health care services, has proven itself within clearly-defined procedures (such as short-term cardiac and orthopedic procedures) and now many are looking to take the model to scale in other costly disease areas, including oncology and chronic disease.

But the impact of this payment system on medical advancement and innovation is far from clear. “There are serious concerns that innovation in therapeutics and devices could be at risk,” Paradis said. “Bundled payments are here to stay but there is serious concern that without appropriate quality safeguards in place, arrangements may inhibit medical advancement and the adoption of innovative therapies.”

 “Without clear signs from the health care system on quality targets in which to aim and that proven innovations will be reimbursed, incentive for innovators to invest in the development of future innovations may be harmed,” according to the paper.

 The issue brief, authored by Paradis and Erin Bartolini, NEHI program director, is a result of two expert roundtable discussions that NEHI convened in July 2014, along with current research on the state of bundled payment systems and what the changing landscape means for patient access to innovative therapies and devices.

 The paper also serves to summarize national and state models in the bundled payment ecosystem, and warns that bundled payments or other value-based payments reforms must recognize the need for innovators to create products aligned with the shift toward value.

 Paradis also discussed the issue in a blog published in the Health Affairs Blog in September.


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. For more information, visit Follow us on Twitter at @NEHI_News and like us on Facebook at NEHI

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