Healthcare Informatics
Ready For the New World of Mandatory Bundles? Beacause the Federal Payment Reform Train Is Clearly on a High-Speed Track Now
By: Mark Hagland
The July 25 announcement of the mandatory bundled payment program for cardiac care was an important one, with regard to the Bundled Payments for Care Improvement (BPCI) Initiative, which began to go live in October 2013 and is testing four different models for payment under Medicare, and has been well-described in such publications as Health Affairs, Richards says that “I think you’ll see more conditions added, as well as a combination of mandatory and voluntary bundles coexisting for a significant period of time. I think from a policy perspective, CMS likes the ability to offer both” mandatory bundles and voluntary ones. “For hips and knees and cardiac, the hospital is the mandated convener. In the voluntary bundles, you can have hospitals, doctors, or third-party conveners managing the risk,” he notes.
The key challenge here, Richards notes, is that, “In these two programs”—both mandatory bundled-payment programs—“hospitals are taking on insurance-type risk, for 90 days, and a significant portion of the cost they’re responsible for is incurred outside the hospital. So having good data analytics and good connectivity, will be essential.” Optimized discharge planning management will be vital, he insists.
What about that $5.631 trillion number?
None of these developments around mandatory and voluntary bundles are emerging out of a vacuum; instead, they are all reflective of the cost cliff that the U.S. healthcare system is about to go over. As I noted in a blog just last week, the Medicare actuaries had their most recent spending projections published in the July issue of Health Affairs. As our July 18 news article noted, “In an article entitled ‘National Health Expenditure Projections, 2015-25: Economy, Prices, and Aging Expected To Shape Spending and Enrollment,’ the authors…predicted that the percentage of the gross domestic product (GDP) spent on healthcare every year across the U.S. healthcare system would grow from 17.5 percent in 2014 to 20.1 percent in 2025 with total spending rising from $3.3013 trillion in 2014 to $5.631 trillion in 2025.” Yes. That is indeed 5.631 trillion dollars.
And all of the initiatives that federal healthcare officials are creating now—around readmissions reduction, value-based purchasing for both hospitals and physicians, bundled payments, accountable care, and every other federal development—are closely tied to the awareness on the part of those same federal officials that there is no turning back now, and that the only way forward will be a complex combination of cost management, clinical performance improvement, patient outcomes and satisfaction improvement, and the leveraging of data and healthcare IT—will ultimately help to bend that cost curve.
So this latest announcement of two new sets of bundles is a development that healthcare leaders, including healthcare IT leaders, really, really need to pay attention to. It involves areas of care that produce a significant percentage of most hospitals’ revenues; and success will require rigorous, arduous work.
So what does Clay Richards think that CIOs, CMIOs, and other healthcare IT leaders should be doing right now? “What’s critical is that the most important lever in the process is the discharge plan,” he advises. “So getting your discharge planning optimized is so important. You get benefits from those capabilities in the FFS world, but certainly that lays the tracks for a more complete clinical management system. And if you’re CEO of the hospital, you’ve got to be thinking that five, ten years from now, the shift from fee to value… and certainly, investments in technology will become really important.”
Once again, federal officials have sent a major signal to healthcare providers about where all of this is going. And it’s really important for hospital leaders and physicians to listen, because this train is on a high-speed track.
