Unraveling the Complexity in the Design and Implementation of Bundled Payments: A Scoping Review of Key Elements From a Payer’s Perspective

Original Scholarship

Policy Points:

  • Because bundled payments are relatively new and require a different type of collaboration among payers, providers, and other actors, their design and implementation process is complex.
  • By sorting the 53 key elements that contribute to this complexity into specific pre‐ and postcontractual phases as well as the actors involved in the health system, this framework provides a comprehensive overview of this complexity from a payer’s perspective.
  • Strategically, the design and implementation of bundled payments should not be approached by payers as merely the introduction of a new contracting model, but as part of a broader transformation into a more sustainable, value‐based health care system.

Context: Traditional fee‐for‐service (FFS) payment models in health care stimulate volume‐driven care rather than value‐driven care. To address this issue, increasing numbers of payers are adopting contracts based on bundled payments. Because their design and implementation are complex, understanding the elements that contribute to this complexity from a payer’s perspective might facilitate their adoption. Consequently, the objective of our study was to identify and structure the key elements in the design and implementation of bundled payment contracts.

Methods: Two of us independently and systematically examined the literature to identify all the elements considered relevant to our objective. We then developed a framework in which these elements were arranged according to the specific phases of a care procurement process and actors’ interactions at various levels of the health system.

Findings: The final study sample consisted of 147 articles in which we identified the 53 elements included in the framework. These elements were found in all phases of the pre‐ and postcontractual procurement process and involved actors at different levels of the health care system. Examples of elements that were cited frequently and are typical of bundled payment procurement, as opposed to FFS procurement, are (1) specification of care services, patients’ characteristics, and corresponding costs, (2) small and heterogeneous patient populations, (3) allocation of payment and savings/losses among providers, (4) identification of patients in the bundle, (5) alignment of the existing care delivery model with the new payment model, and (6) limited effects on quality and costs in the first pilots and demonstrations.

Conclusions: Compared with traditional FFS payment models, bundled payment contracts tend to introduce an alternative set of (financial) incentives, touch on almost all aspects of governance within organizations, and demand a different type of collaboration among organizations. Accordingly, payers should not strategically approach their design and implementation as merely the adoption of a new contracting model, but rather as part of a broader transformation toward a more sustainable value‐based health care system, based less on short‐term transactional negotiations and more on long‐term collaborative relationships between payers and providers.

Keywords: alternative payment models, value-based purchasing, bundled payments, design and implementation process.

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Published in 2020
DOI: 10.1111/1468-0009.12438