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Bundled Services and Outcomes

Bundling of Services

One legislative policy option for controlling postacute care costs is for Medicare to make a “bundled” payment to hospitals to cover episode costs.

This policy is being suggested by an economist Pete Welch in the Health and Human Services Division of the Congressional Budget Office. In short, bundled services would include all post acute care services for a period of thirty days to be included in the hospital DRG payment.  If post acute care services were ineffective, the financial risk to the hospital would be considerable.

It is only a ‘suggestion’ at this time but there is a very real possibility that Congress will take this suggestion seriously as a means to reduce post acute costs to Medicare. Whether this is good or bad depends on where you are sitting. But, as a consultant, my job isn’t to determine the suitability of such a proposal but rather to get clients ready for the possibility of bundled services.

It stands to reason that if hospitals are going to be paying for the first thirty days of care following a hospitalization they will have serious motivation to choose the best post acute care option with the best potential to meet the needs of the patient thereby reducing costs. Furthermore, the hospitals would have to justify their decisions.

Therefore, if I owned any type of facility that rendered care to patients following an inpatient stay, I would start now to ensure that my reported outcomes were as pristine as possible. And the outcome I would focus the most attention on is Acute Care Hospitalizations. If and when this comes to pass, I cannot see a hospital deliberately choosing an agency or facility that had a high rate of hospitalizations.

And if this doesn’t come to pass, there are millions of other reasons why preventing hospitalizations is a good thing. Ask any patient or family member of a patient who has been hospitalized lately how their lives were disrupted by an inpatient stay.

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