Bundled payments encourage partnerships to help providers share accountability, integrate patient care, and maximize value across the continuum.

As systems across the globe continue to implement value-based healthcare approaches to improve the quality and cost of care, the push for transitioning away from the current volume-based payment model has never been stronger.

Healthcare industry leaders agree that changing the way we pay for care is one of the biggest obstacles healthcare systems face today. However, two promising methods of payment reform that many payers are entertaining ─ bundled payments and capitated payments ─ are constructed in inherently different ways and will lead us down two very different paths.

The capitation model, though well-meaning, ultimately falls short in the transformation to true value-based care. In these arrangements, providers are only held accountable for overall cost and population level quality measures, not on the outcomes of individual patients based on their specific condition. This model leads providers to focus on broad high cost areas, encouraging consolidation rather than integration and alignment across health systems. In turn, this limits patient choice and threatens competition and innovation in care delivery.

We believe the bundled payment approach is a superior model for creating and delivering value in healthcare.

We believe the bundled payment approach is a superior model for creating and delivering value in healthcare. In this model, payments are contingent on achieving the outcomes that matter most to patients for each condition. The bundled payment covers all the services and facilities that are involved in treating a patient’s condition over the full episode of care. It provides strong incentives for health systems to create integrated, multidisciplinary care teams. Additionally, it encourages providers to form partnerships to better leverage existing services and technologies, and develop new solutions, to support a value-based environment for delivering care.

At Medtronic, we are committed to working with the global health community and forming meaningful partnerships to improve outcomes and better manage costs for the system. We believe that our technologies, services, solutions and expertise we offer can play a significant role in a provider’s transition to a bundled payment model.

We’re introducing new value-based healthcare business models in several of our therapy solutions areas — including orthopedics and cardiovascular — with the goal to expand into more.

As we move forward in this new and exciting era of transformational healthcare, we are collaborating and forming partnerships with like-minded leaders to accelerate the adoption of value-based healthcare models that ensure better patient outcomes, reduce costs and deliver value.