Harvard Business Review

GETTING BUNDLED PAYMENTS RIGHT IN HEALTHCARE

by Derek Haas, Robert S. Kaplan, Dereesa Reid, Jonathan Warsh and Michael E. West

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ARTICLE SUMMARY

Bundled payments represent a significant opportunity to deliver better patient outcomes at lower cost. A single payment for all care for a given medical condition over a specified timeframe, making providers accountable for the full episode of care. The concept is simple; the execution is not.

Providers can learn from those who have successfully implemented  bundled payments, including Hoag Orthopedic Institute (HOI), a specialty orthopaedic hospital in southern California, and the Rothman Insti­tute (RI), a private-practice physician group in metropolitan Philadelphia. Their experiences reveal three keys for successful bundling: excellent data on outcomes and costs, pro­active management of the patient, and align­ment between physicians and hospitals. Read how they did it.