Bundling payments to providers as a means to cut healthcare costs is proving harder to do than originally anticipated, according to a new study from non-profit research organization Rand Corp.
The Rand study examined the first three years of one of the major efforts to test the concept of bundled payments: The PROMETHEUS Payment project launched by the Health Care Incentives Improvement Institute. Results of the study will be published in the November issue of Health Affairs.
Launched in three communities (Crozer Keystone Health System-Independence Blue Cross in Pennsylvania; Employers' Coalition on Health in Rockford, Illinois; and Priority Health-Spectrum Health in Michigan) and supported by the Commonwealth Fund and the Robert Wood Johnson Foundation, the project is intended to show that bundling payments to doctors, hospitals and other health providers into a single payment would encourage the different providers to work together to both treat all aspects of particular procedures and diseases while eliminating unnecessary care.
But the Rand study found that three years after launch, no bundled payments had been made and no payment contracts for bundled payments have been executed. Although all parties involved with the effort are committed to its success, researchers say the slow progress underscores the challenges such complex payment reforms must overcome.
"There is a tremendous amount of interest in this type of payment reform, but we found that transferring it into practice is extremely difficult." said Peter Hussey, the study's lead author and a policy researcher at Rand, in a press release. "The model is very complex and the fact that it builds upon the existing fee-for-service payment system presents challenges."
The adoption of bundled payments was slowed by a number of different issues including which health problems should be included in a payment bundle, as well as difficulty convincing providers that the cost cutting measures that would be required wouldn't compromise quality of care.
"We did see some progress on many of these issues so there are signs that progress on bundled payments may begin to accelerate," Hussey noted. "Despite the difficulties we observed, it's still an approach worth pursuing."
While researchers found that no bundled payments had yet been made in the three-year-old effort, they did note there have been some important changes among the providers participating in the test program. Among those changes were efforts to redesign how care is delivered while making providers aware of their ability to make these care delivery changes to both reduce cost and improve quality.
"The struggles of the PROMETHEUS participants are likely to help others adopt bundled payments more quickly in the future. But the transition to bundled payments is still likely to take years to occur," Hussey concluded.