Proponents of a movement away from the traditional fee-for-service model of reimbursement for health care argue that it results in unnecessary use of services and interventions by rewarding volume and not value, increasing the cost of care. In 1984, Medicare instituted the diagnostic-related group model in an effort to stabilize health care costs by decreasing length of stay and resource use in the inpatient setting; however, postacute care was not included and outpatient spending increased as patients were discharged earlier.1 The Patient Protection and Affordable Care Act of 2010 established incentives for hospitals and physicians to improve value and address outcomes.1 A result of this was the Bundled Payment Care Improvement Program, exploring a bundled payment model that began in January 2013 and targeted all Medicare fee-for-service beneficiaries with Part A (hospital) and part B (physician) coverage.2 The bundling of payments resulting in a single reimbursement for all services rendered by health care professionals for an episode of care has been proposed as a potential health care reform solution. An episode of care is defined as all acute and postacute care provided for a particular patient condition including physician payments and the costs of postdischarge care for a specified amount of time.
Murayama KM. Bundling Our Health Care Future. JAMA Surg. 2015;150(12):1115–1116. doi:10.1001/jamasurg.2015.2422
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