Bundled Care (EPMs) Assure Future Healthcare Business Viability

Bundled care is a hot topic these days. Also known as Episode Payment Models (EPMs), we are still seeing a plethora of articles, posts, papers and other pieces simply describing or defining the relatively new term. For a full description of the January 2017 Final Rule, you can find a 472-page, “light” read.

All this attention attests to the turmoil created by the changing landscape.

The idea of bundled care or EPMs isn’t too terribly complex.  For example, payers and providers agree to and fix a price to a product such as a hip replacement.  Provider(s): you’re on the hook to deliver a quality, complete product for that price. Payer: you commit to pay that price. Implementing the whole thing may be more complex, however.

Many in the industry jumped in with BPCI, a voluntary CMS-driven EPM program with 48 episode options. Only 25% of those are still active since its 2013 kick-off, however, so it is difficult to assess applicability or success. The more recent, mandatory 2016 EPM dubbed “CJR” (comprehensive joint replacement) gives us a much better view of what works and what doesn’t, due to its mandatory nature.  A few more mandatory EPMs will explode onto the scene in July of this year around cardiac care and more orthopedic issues.

Conjecture abounds about whether the Trump administration and Congress will unwind all things healthcare reform in the coming months, and EPMs fall squarely in that speculation. The biggest question is not whether EPMs will survive, but rather if we will continue a trend toward mandatory models or drift back to voluntary.

With past performance being a predictor of future success, I think reverting to voluntary models would be a bad idea. We all agree that healthcare reform to improve quality and reduce cost are good things and EPMs provide a solid framework to figure that out. It will take work, no doubt, but if you allow payers, providers, and even patients to decide whether to opt in or out, we will just regress to old methods of doing things, and never explore or adopt improvements.

EPMs align providers based on mutual reliance, financial interest, and definitely require more skin in the game when it comes to patient outcomes. Short of a wholesale switch to an IDN or ACO (impossible for many due to cost, politics, etc.), EPMs advance our current fee-for-service culture toward a value mindset, while still allowing the flexibility for current healthcare providers to maintain their identities. With a thoughtful plan in place, some good tools in hand, and the assurance from payer sources that this works for them too (and it does), adopting EPMs can assure strong business viability well into the future.

 

Darin Vercillo, MD
Chief Medical Officer & Co-Founder

View a recent webinar on “Navigating Bundled Care in a Changing Environment” here: http://www.centrallogic.com/resource/navigating-bundled-care-in-a-changing-environment/