Consistency is the name of the game for providers when it comes to reducing costs, with more providers looking to reduce clinical variability to maximize their returns on shared savings models, accountable care organizations and bundled payment systems. But there are financial risks associated with such efforts — competitors can better strategize to beat prices, and physicians on staff may be less supportive of standardized clinical delivery initiatives, complaining of "cook-book medicine."
Ed Gaines, chief compliance officer for Medical Management Professionals, says there are a few best practices for hospitals to combat these strategies.
For starters, he says, the best way to get physicians on board with a hospital or surgery center's bundling strategy is to make the clinical data transparent to them to show them how the standard of care is evidence-based and how the hospital's direct costs and earnings are generated. In scenarios involving physician ownership, that transparency can also assure physician investors that the bundle price will be profitable, Mr. Gaines says.
This is how Geisinger Health System, based in Danville, Pa., famously pioneered its bundled pricing for procedures such as coronary artery bypass grafting, he says. System administrators gathered data to share with physicians and invested them in the best, cost-effective standard of care to be implemented. With high physician buy-in, the standard was followed faithfully, and the program is frequently touted as an exemplary model for healthcare bundling, he says, but with one caveat. Geisinger Health Plan is one of the health system's major payers, and this fact and Geisinger's geographic positioning may make them unique.
In addition to strong leadership and execution of the move, Mr. Gaines says Geisinger had several other factors working in its favor to promote the success of the bundling program. "I think if you look at Geisinger, they had done [bundling] with employed physicians," he says. "That makes it easier to line [physicians] up and tell them, 'We believe this is great care, go implement it,' as opposed to an independent group of physicians."
"I believe that co-management arrangements may also facilitate strategic alignment of independent groups with their hospitals without the groups giving up independence," he adds.
Whether through the more elaborate ACO structures or bundled payment adoption — which Mr. Gaines referred to as "ACO lite" — changing the paradigm of hospital pricing is imperative. Healthcare spending as a percentage of the U.S. gross domestic product is growing at a rate that would overtake much of GDP by 2050, he says. "Bundled payment makes you look like you've embraced the change. You can be successful in partnering with hospitals and looking at data to figure out where that variable coast is," he says. "Providers who figure that out are primed for success in the future."
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