January 16, 2020

Episode based payment systems

Unraveling the Complexity in the Design and Implementation of Bundled Payments: A Scoping Review of Key Elements From a Payer’s Perspective

After per case based payment systems (DRGs) everybody was waiting for a comprehensive system to measure health services activities. And instead of focusing on episodes, what happened is that bundling was the new frame. Unfortunately, after all these years bundling has not provided the answer because the scope of measurement is related to several diseases and it is not holistic.
When everybody was asking for an alternative to fee-for service, the answer was in my opinion "patient focused episodes of care", but the US government decided otherwise and protected the interests of those that leverage fee-for-service.
Therefore, now it is the time to fix this mistake and take the right  road. In this article you'll find some issues to consider when you have to design a payment system. It still talks about bundling, forget it, substitute it by episodes and it will be fine.

Our framework provides a structured overview of the principal, literature‐based elements of the design and implementation of bundled payment contracts from a payer's perspective. We identified 53 elements that involve all procurement phases and relate to actors on all levels of the health care system. A better understanding of these elements can help payers and other actors devise a strategic approach and reduce the complexity of implementing these contracts. Compared with traditional FFS models, bundled payment contracts introduce an alternative set of financial incentives that affect the entire health care system, involve almost all aspects of governance within organizations, and demand a different type of collaboration among organizations. This is what makes the design and implementation of bundled payment contracts complex and is why they should not be strategically approached by payers as merely the adoption of a new contracting model but, rather, as part of a broader transformation to a more sustainable value‐based health care system, based less on short‐term transactional negotiations and more on long‐term collaborative relationships between payers and providers.