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Home / News & IndustryManaged Care Insight and Analysis
Updated: January 4, 2011
IHA Project Tests Viability Of Bundled Care Payments

The Integrated Healthcare Association (IHA) is launching a pilot project to test whether episode of care payments (bundled payments) for specific medical procedures can improve healthcare efficiency, generate cost savings and improve healthcare outcomes.

IHA received grant funding for the pilot effort from the California HealthCare Foundation.

"Bundled payments offer another mechanism to help align financial incentives for all providers involved in treating a patient during a discrete episode of care for a specific condition," said Thomas R. Williams, executive director of IHA.

Starting in late summer and focusing initially on commercial PPO patients in Los Angeles and Orange counties, the project is designed to demonstrate the feasibility of episode of care payments for total knee or hip replacements. Later phases of the pilot will expand the types of procedures and include other areas of California.

Episode of care payments have received national interest as a promising method to improve quality and contain costs. A report from the Commonwealth Fund Commission on a High Performance Health System projects that bundled payments for acute care episodes could potentially reduce national health expenditures by as much as $300 billion by year 2020.

The episode of care project will test the feasibility of a reformed payment structure that establishes a single budget or fee for a procedure that involves multiple providers.

"This innovative pilot will be helpful in improving understanding of how to best enhance patient care through an integrated approach to reimbursing physicians and hospitals," said Thomas M. Priselac, president and CEO of Cedars Sinai Health System in Los Angeles. "It allows doctors, hospitals, and health plans to work collaboratively in designing the best way to implement this approach to reimbursement based on episodes of care."

Participation in the pilot is voluntary and includes Aetna, Blue Shield of California, CIGNA, HealthNet, Cedars-Sinai Medical Center, Hoag Hospital, UCLA Health System, Saddleback Memorial Medical Center, and Tenet-California.

Several independent practice associations and medical groups will be engaged in this new bundled payment system.

The recently passed national health reform bill includes Medicare and Medicaid sponsored establishment of national, voluntary bundled payment pilot programs beginning in 2012.

Address: Integrated Healthcare Association, 300 Lakeside Dr., Suite 1975, Oakland, CA 94612; (510) 208-1740, www.iha.org.


  This article was taken from:
Pay-for-Performance Reporter

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