With the goal of aligning provider and insurer incentives to deliver more patient value, an academic team from Harvard Business School convened a group of orthopedic surgeons from the Boston Shoulder Institute and Harvard Pilgrim Health Care to create a new “bundled payment” (BP) model. DPM faculty member and HPHC Chief Medical Officer, Michael Sherman, MD, MBA, MS played a critical role on the team and co-authored the piece.
Unlike the traditional fee-for-service reimbursement model that rewards volume of treatments rather than medical outcomes, a new bundled-payment model is designed to reward providers who deliver better outcomes at a lower cost. Clinicians would be paid a fixed fee for providing all of the services required to deliver a complete cycle of patient care for a specific clinical condition.
For this project, the working team chose rotator-cuff damage as the clinical condition to be bundled. Because rotator-cuff repair is a high-volume procedure with a specific cycle of care that can result in great variability in outcomes among clinicians, this surgery offered an opportunity to improve outcomes and standardize treatment around best practices.
The blog goes on to describe how the research team worked together-- in a real spirit of collaboration -- to define the bundle, select the population for a pilot project, specify outcomes, estimate costs, and ultimately set prices.
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