New Healthcare Policy Means Changes in Hospital Business Models

Aug 8, 2016 4:25 PM ET

New Healthcare Policy Means Changes in Hospital Business Models

“Bundled payments” is the latest innovation in US healthcare to affect providers’ business models. The Centers for Medicare and Medicaid Services have proposed a new policy that includes new categories of care under mandatory experiments with this concept.

According to Modern Healthcare, “in bundled-payment programs, the payer sets a target price for a medical or surgical episode. Although it still pays providers on a fee-for-service basis, the total costs are then reconciled with the target amount. Hospitals either pocket or pay back the difference.” Previous bundled payment programs covered a much narrower scope of procedures and were voluntary.

Adding some of the most common major surgeries—heart attacks, coronary bypass grafts, and hip replacements—to a mandatory list raises the financial stakes for providers and insurers alike to offer the best care.  It’s the most recent of several innovations under the Affordable Care Act toward models that provide for quality of care rather than the quantity of services.

I’m John Howell for 3BL Media.

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