Unraveling the Complexity in the Design and Implementation of Bundled Payments: A Scoping Review of Key Elements From a Payer's Perspective
- PMID: 31909852
- PMCID: PMC7077767
- DOI: 10.1111/1468-0009.12438
Unraveling the Complexity in the Design and Implementation of Bundled Payments: A Scoping Review of Key Elements From a Payer's Perspective
Abstract
Policy Points Because bundled payments are relatively new and require a different type of collaboration among payers, providers, and other actors, their design and implementation process is complex. By sorting the 53 key elements that contribute to this complexity into specific pre- and postcontractual phases as well as the actors involved in the health system, this framework provides a comprehensive overview of this complexity from a payer's perspective. Strategically, the design and implementation of bundled payments should not be approached by payers as merely the introduction of a new contracting model, but as part of a broader transformation into a more sustainable, value-based health care system.
Context: Traditional fee-for-service (FFS) payment models in health care stimulate volume-driven care rather than value-driven care. To address this issue, increasing numbers of payers are adopting contracts based on bundled payments. Because their design and implementation are complex, understanding the elements that contribute to this complexity from a payer's perspective might facilitate their adoption. Consequently, the objective of our study was to identify and structure the key elements in the design and implementation of bundled payment contracts.
Methods: Two of us independently and systematically examined the literature to identify all the elements considered relevant to our objective. We then developed a framework in which these elements were arranged according to the specific phases of a care procurement process and actors' interactions at various levels of the health system.
Findings: The final study sample consisted of 147 articles in which we identified the 53 elements included in the framework. These elements were found in all phases of the pre- and postcontractual procurement process and involved actors at different levels of the health care system. Examples of elements that were cited frequently and are typical of bundled payment procurement, as opposed to FFS procurement, are (1) specification of care services, patients' characteristics, and corresponding costs, (2) small and heterogeneous patient populations, (3) allocation of payment and savings/losses among providers, (4) identification of patients in the bundle, (5) alignment of the existing care delivery model with the new payment model, and (6) limited effects on quality and costs in the first pilots and demonstrations.
Conclusions: Compared with traditional FFS payment models, bundled payment contracts tend to introduce an alternative set of (financial) incentives, touch on almost all aspects of governance within organizations, and demand a different type of collaboration among organizations. Accordingly, payers should not strategically approach their design and implementation as merely the adoption of a new contracting model, but rather as part of a broader transformation toward 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.
Keywords: alternative payment models; bundled payments; design and implementation process; value-based purchasing.
© 2020 The Authors. The Milbank Quarterly published by Wiley Periodicals, Inc. on behalf of The Milbank Memorial Fund.
Figures



Similar articles
-
Medicare's Bundled Payment Initiatives for Hospital-Initiated Episodes: Evidence and Evolution.Milbank Q. 2020 Sep;98(3):908-974. doi: 10.1111/1468-0009.12465. Epub 2020 Aug 21. Milbank Q. 2020. PMID: 32820837 Free PMC article.
-
Is There An Association Between Bundled Payments and "Cherry Picking" and "Lemon Dropping" in Orthopaedic Surgery? A Systematic Review.Clin Orthop Relat Res. 2021 Nov 1;479(11):2430-2443. doi: 10.1097/CORR.0000000000001792. Clin Orthop Relat Res. 2021. PMID: 33942797 Free PMC article.
-
Design and impact of bundled payment for detox and follow-up care.J Subst Abuse Treat. 2017 Nov;82:113-121. doi: 10.1016/j.jsat.2017.09.012. Epub 2017 Sep 21. J Subst Abuse Treat. 2017. PMID: 29021109 Free PMC article.
-
Association of a Bundled-Payment Program With Cost and Outcomes in Full-Cycle Breast Cancer Care.JAMA Oncol. 2017 Mar 1;3(3):327-334. doi: 10.1001/jamaoncol.2016.4549. JAMA Oncol. 2017. PMID: 27768180
-
Basics of Orthopaedic Commercial and Government Bundling.J Arthroplasty. 2025 Feb;40(2):259-262. doi: 10.1016/j.arth.2024.11.025. Epub 2024 Nov 17. J Arthroplasty. 2025. PMID: 39551403 Review.
Cited by
-
The Impact of Value-Based Payment Models for Networks of Care and Transmural Care: A Systematic Literature Review.Appl Health Econ Health Policy. 2023 May;21(3):441-466. doi: 10.1007/s40258-023-00790-z. Epub 2023 Feb 1. Appl Health Econ Health Policy. 2023. PMID: 36723777 Free PMC article.
-
The potential risk of using historic claims to set bundled payment prices: the case of physical therapy after lower extremity joint replacement.BMC Health Serv Res. 2022 Aug 19;22(1):1061. doi: 10.1186/s12913-022-08410-7. BMC Health Serv Res. 2022. PMID: 35986285 Free PMC article.
-
Factors Influencing the Introduction of Value-Based Payment in Integrated Stroke Care: Evidence from a Qualitative Case Study.Int J Integr Care. 2023 Aug 10;23(3):7. doi: 10.5334/ijic.7566. eCollection 2023 Jul-Sep. Int J Integr Care. 2023. PMID: 37601033 Free PMC article.
-
Advancing District Nursing Care Through a Learning Healthcare System: A Viewpoint on Key Requirements.Healthcare (Basel). 2024 Dec 21;12(24):2576. doi: 10.3390/healthcare12242576. Healthcare (Basel). 2024. PMID: 39766002 Free PMC article.
-
Escalating costs of innovative medicines: perspective and proposals.Front Public Health. 2024 Sep 24;12:1449707. doi: 10.3389/fpubh.2024.1449707. eCollection 2024. Front Public Health. 2024. PMID: 39381757 Free PMC article.
References
-
- Ginsburg PB, Grossman JM. When the price isn't right: How inadvertent payment incentives drive medical care. Health Aff (Millwood). 2005;24:W5‐376‐384. - PubMed
-
- McGuire TG. Physician agency and payment for primary medical care. In: Glied S, Smith PC, eds The Oxford Handbook of Health Economics. Oxford, NY: Oxford University Press; 2012.
-
- OECD . Better ways to pay for health care. Organisation for Economic Co‐operation and Development; 2016. https://www.oecd.org/els/health-systems/Better-ways-to-pay-for-health-ca.... Accessed December 5, 2019.
-
- Tsiachristas A. Payment and economic evaluation of integrated care. Rotterdam, Netherlands: Erasmus School of Health Policy & Management, Erasmus University; 2015. - PubMed
-
- (HCP‐LAN ) HCPLAN. Alternative payment model framework. McLean, VA: MITRE Corporation; 2017. https://hcp-lan.org/workproducts/apm-refresh-whitepaper-final.pdf. Accessed December 5, 2019.
Publication types
MeSH terms
LinkOut - more resources
Full Text Sources