[Skip to Navigation]
May 19, 2015

Including Physicians in Bundled Hospital Care Payments: Time to Revisit an Old Idea?

Author Affiliations
  • 1Department of Health Care Policy, Harvard Medical School, Boston, Massachusetts
  • 2Beth Israel Deaconess Medical Center, Boston, Massachusetts
  • 3RAND Corporation, Boston, Massachusetts
JAMA. 2015;313(19):1907-1908. doi:10.1001/jama.2015.3359

For those unfamiliar with the US health care system, Medicare’s hospital payment likely makes little sense. Medicare uses the prospective payment system to pay a hospital a fixed amount of money for a hospitalization: the Diagnosis Related Group (DRG) payment. The DRG payment covers all hospital-related expenses, except for physician services. For instance, the radiology technician who obtains the x-ray is paid under the DRG payment, but the radiologist who reads the x-ray is paid separately for each film read. The nurse who delivers a medication is paid under the DRG payment, but the physician who orders the medication is paid separately for each visit. Most private health plans mimic this fragmented payment method.