A new way to pay for health care
You can purchase bundles from your Internet and cable providers. Is your hospital next?
Bundling. It happens every day: your child's Happy Meal from McDonald's; your cable, phone and Internet package; your home plus car insurance plan. These are all examples of the convenience, simplicity – and savings – you get from bundling goods and services.
Now, imagine you need a knee replacement. Bummer. Now imagine the multiple bills, from multiple providers for countless services, from consultations to anesthesia to surgery to rehab. Imagine the financial uncertainty – because you have no idea what the total cost will be.
In the health care industry, that's called "fee-for-service." But momentum is building to replace the fee-for-service system with a bundled payment model. That would mean that everything related to your knee replacement, including any complications, would be covered for one set price.
Better health care at a lower price
Another important reason for hospitals and health systems to pursue bundled payments is that the Centers for Medicare and Medicaid Services supports the approach, approving more than 500 organizations for its Bundled Payments for Care Improvement initiative in January.1
The challenges – and the solution
To help meet this challenge, SAS worked with the Health Care Incentives Improvement Institute (HCI3) to create a new software solution: SAS for Episode Analytics.
Once the episode of care is defined (i.e., the entire span of services involved in providing patient care for a condition or procedure, including pre- and post-care, regardless of clinical setting), SAS Episode Analytics then provides personalized, comparative costing for each episode, allowing health care plans and providers to project a budget for specific medical care within a defined time period. The episode of care includes all covered services across all providers that typically treat a given condition, adjusted for the severity and complexity of a patient's condition.
"The more data you have, and the better you analyze it, the less likely you are to set unrealistic targets for either quality or cost," says Graham Hughes, MD, Chief Medical Officer for the SAS Center for Health Analytics and Insights.
"Organizations adopting bundled payment models can use SAS Episode Analytics to clearly understand what's involved in an episode of care," says Hughes, "including costs, services, and how many entities will share in the care and reimbursement. Then they can confidently predict and manage the financial risks and rewards."
SAS Episode Analytics helps health care organizations:
In partnership with HCI3
Horizon Healthcare Services increases patient satisfaction, reduces costs
1, 2 H&HN magazine. "Bundled payment," April 2013. www.hhnmag.com.
Lessons from Horizon Healthcare and Blue Cross Blue Shield of NC
*Strong leadership. Engaged and committed executive support for the initiative.
*Data analysis. Both Horizon and BCBSNC emphasized the importance of analytics to monitor internal programs and share data with providers.
Source: Issue Brief: Bundled Payments One Year Later. May 30, 2013. www.hci3.org .
This story appears in the Fourth Quarter 2013 issue of