Bundle payments to reduce price variation


Arkansas Blue Cross Blue Shield and Horizon Blue Cross Blue Shield of New Jersey have found their bundled payment programs improve quality and lower costs. Plus, bundled payments can reduce the variation in prices among providers for the same service, reported AIS Health.

Arkansas Blues began bundling payments three years ago for total hip/knee replacement, perinatal care, ambulatory upper respiratory infections, acute and post-acute heart failure, and attention deficit hyperactivity disorder.

"This is a change to our payment methodology," Steve Spaulding, senior vice president of enterprise networks, told AIS Health. "So if a provider is in our network, they're engaged in the risk-reward components of episodic care."

The program already is increasing preventive care: Screening for chlamydia rose from almost 48 percent in 2012 to 66 percent in 2013, while screening for gestational diabetes grew from 79 percent in 2012 to 92 percent in 2013.

In addition to boosting quality while lowering costs, Arkansas Blues is using bundled payments to reduce price variation. "We're asking providers to help us try to compress the level of variation because there's no reason for a 20 percent or 30 percent cost differential in one part of Arkansas than another part of Arkansas, maybe 100 miles away," Spaulding said.

"Information is a very, very effective tool, and I frankly think that sometimes the transparency of information is just as effective as the financial incentives in getting behaviors to change," he added.

Other insurers are finding success with bundled payments. Blue Cross Blue Shield of North Carolina, for example, bundles payments for knee replacements, aiming to change how care is delivered.

"Basically what we're working with providers to do is deliver high-quality care at a lower cost without impacting their margin. This is a new way of thinking about care delivery and really optimizing all aspects of care delivery," Brian Holt, BCBSNC's director of strategic reimbursement and contracting, told FierceHealthPayer in a previous interview.

To learn more:
- read the AIS Health article

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