Bundling Healthcare

I came across an article in USA Today that describes a new Medicare pilot project in which participating hospitals and physicians receive a single "bundled" payment for services (as opposed to previous fee-for-service payments that each went to hospitals and physicians separately) in an effort to reduce costs and improve efficiency. Proponents of the project say that it is already realizing savings and is driving better care in comparison to the fee-for-service system that they argue promotes more care (not necessarily quality care). They also suggest that it is forcing hospitals and physicians to truly work and communicate together in the care of the patient. Hospitals have the incentive to be part of the "bundled" experiment because patients receive "discounts" in their care if they elect to have procedures performed at facilities participating in the project. Some are skeptical, however, that patients even care about the discounts offered or that the project will truly realize improved care, fearing that instead physicians will be more reluctant to call for specialist consultations. They also worry that hospitals, who are in charge of dispersing the reimbursement funds upon receipt, will take care of themselves first and then tend to the physicians.

This article had two reasons of interest for me. First, as I study organizational theory, I am intrigued as to how a number of the theories I am learning about would predict organizational reactions to this project, particularly in their desire to manage their resources and gain legitimacy in the eyes of patients and the health care community. Second, I am reminded of our family and friends in Texas, because the Baptist Health System out of San Antonio is one of the few locations that this pilot project is taking place!

http://www.usatoday.com/news/health/2009-10-25-bundle-payments_N.htm