Main Library See More- Visit ACOExhibitHall.com
When Designing Bundled Payments, Don’t Ignore The Lessons Of Behavioral Economics

When Designing Bundled Payments, Don’t Ignore The Lessons Of Behavioral Economics

April 25, 2018Jeroen Struijs, Arthur Hayen, Koen van der Swaluw No CommentsHealth AffairsACO Development & Operations

In health care, all bundled payment models shift financial and clinical accountability to a single provider-led entity that then is responsible for a budget and the quality of care delivered for any given episode. The entity receiving the bundled payment earns a higher margin if a patient has fewer expenditures but also bears the financial risk of (re)admissions and complications. This payment model therefore produces an incentive for providers to coordinate care across settings and not to stint on needed care. When implementing bundled payment models, payers and providers can choose two main strategies regarding the payment flow, namely a prospective payment (which is made before services are rendered) or a retrospective payment (which is made after all services are rendered).

Currently, there is ongoing debate about which payment strategy to follow. In a June 2017 Health Affairs Blog post, François de Brantes and Suzanne F. Delbanco stated that the difference between retrospective and prospective payments is not significant in practice. Paraphrasing their line of reasoning, the difference between the two is believed to vanish as retrospective payments are often based on upfront, negotiated benchmarks as well. The authors continue by saying that people’s “aversion to losses” would make a case for including downside risk to retrospective bundled payments, as a way of mimicking the incentives that follow from prospective bundled payments.

Full Article

: Bundled Payments

Related Posts

Beta Testing Value-Based Care: What New can Bundled Payments Bring to the Table

January 23, 2019Garrett Schmitt

BPCI Advanced Will Further Emphasize The Need To Address Overlap Between Bundled Payments & ACOs

April 17, 2018Garrett Schmitt

Emory Healthcare, Walmart Team Up for an ACO, Bundled Payments

April 23, 2018Garrett Schmitt

Leave a Comment Cancel reply

Your email address will not be published. Required fields are marked *

Recent Posts

  • Healthcare must look inward to better address social determinants of health, Berwick says
  • 5 Ways Technology Will Enable Value-Based Care in 2020 and Beyond
  • 90% of Value-Based Payments in Commercial Sector Based on FFS
  • Digital health — Getting beyond the smoke and mirrors
  • Value-Based Care Leads the Way to Lower Costs and Better Quality
 
When Designing Bundled Payments, Don’t Ignore The Lessons Of Behavioral Economics
  • MENU
    • Main Lobby
    • Vendor Halls
    • Our Team
    • Newsletter
    • Exhibit With Us
    • Testimonials
    • Board Room
    • Live Events
    • Library
    • Contact Us