The Fund supports several networks of state health policymakers to help identify, inspire, and inform policy leaders.
The Fund identifies and shares policy ideas and analysis on topics important to state health policymakers, particularly on issues related to state leadership, primary care, aging, and total costs of care.
Keep up with news and updates from the Milbank Memorial Fund. And read the latest blogs from our thought leaders, including Fund President Christopher F. Koller.
The Fund publishes The Milbank Quarterly, as well as reports, issues briefs, and case studies on topics important to health policy leaders.
The Milbank Memorial Fund is an endowed operating foundation that publishes The Milbank Quarterly, commissions projects, and convenes state health policy decision makers on issues they identify as important to population health.
January 7, 2020
Early View Original Scholarship
Eric van der Hijden
Back to The Milbank Quarterly
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.
Read on Wiley Online Library
Published in 2020 DOI: 10.1111/1468-0009.12438
Get the Latest from the Milbank Memorial Fund
The Milbank Quarterly’s multidisciplinary approach and commitment to applying the best empirical research to practical policymaking offers in-depth assessments of the social, economic, historical, legal, and ethical dimensions of health and health care policy.