Bundled Payment Across the U.S. Today

Health policy discussion across the United States during the past few years has increasingly focused on finding alternatives to the predominant fee-for-service model of paying for health care services which many see as a key impediment to slowing the growth of health care costs and improving quality. One promising alternative is a bundled payment model where a fixed dollar amount that covers a set of services, defined as an episode of care, for a defined period of time is paid. The fixed dollar amount can cover bundles for both professional and facility charges for acute care, as well as chronic conditions.

This issue brief from the Health Care Incentives Improvement Institute (HCI3), assesses the recent experience with and trends in bundled payments in America. Researchers identify and examine 19 non-federal bundled payment initiatives in detail, highlighting significant growth and activity with the model since it first showed promise in a Medicare pilot more than two decades ago. The brief describes the path and decisions followed by the participants with the hope that their experiences and choices will help inform those who are following them into the world of bundled payments.

The Robert Wood Johnson Foundation was one of the original funders for the development of the PROMETHEUS Payment® methodology highlighted in the brief and continues to work with the project as a payment reform technical assistance provider to Aligning Forces for Quality, its signature effort to improve the quality of care in the U.S.