EP434: 5 Surprises About Bundled Payments, With Benjamin Schwartz, MD, MBA

For a full transcript of this episode, click here.

I’ve been in a couple of meetings lately. In one case, a healthcare company came up with a strategy and deployed it; and the strategy didn’t go as planned. The other one, it did go as planned—it worked great. Of course, I’m coming in on the back end like a Monday morning quarterback here; but the plan that failed, I have to say, I wasn’t surprised. Had they asked me ahead of time, I would have told them to save their money because the plan was never gonna work, even though the strategy looked like kind of a straight line from here to there.

Nor was I shocked by the success of the other plan, even though this one that triumphed had what looked like five extra steps and was slightly counterintuitive if you looked at it cold, without understanding the way the healthcare industry actually works.

Here’s my point: It might feel like the healthcare industry is chaos monkey central and impossible to predict actions and reactions—and, for sure, there’s always unknowns and intersecting variables—but it’s not a complete black box. The trick is, as you know and I know, you gotta understand what other stakeholders are up to. You gotta get a bead on what they’re doing and what their incentives are because then you can better predict actions and potentially reactions.

So, let me state the obvious (that’s why listeners tune in to this show as I just said, and it’s what we aim to shine a light on here at Relentless Health Value): the pushes and the pulls and the forces. What’s going on outside of the organizations or the silos that we work within day-to-day. Because if you’re looking to sell to, partner with, not be obstructed by [insert some stakeholder here], then it’s very vital to be keyed in on what they’re doing or what their customers are doing or what their customers’ vendors are doing. This show should feel like it gives you a measure of control (or at least that’s my hope) or a method to find the measure of control. And I hope you succeed. That’s why I continue to put out these shows. The RHV tribe members want the same thing I want—to fix the healthcare industry for patients and for members—so, thanks for being here and for making actionable the insights that you might find here.

I have been so looking forward to doing a show with Ben Schwartz, MD, MBA, orthopedic surgeon and prolific writer of deeply thoughtful and insightful posts on LinkedIn. In this healthcare podcast, we are talking about bundled payments. And today’s your lucky day if you think you know a lot about bundles, because most people who listen to this show at least know enough to be dangerous. So, that’s our starting point, which is why I asked Dr. Schwartz to talk to me about what most people find surprising about bundles and bundled payments. There are four surprises that we go through in the show today. Listen to the show or read the transcript to find out exactly what they are. So, no spoiler alert alert.

But relative to these surprises, we get into the four types of bundles that may or may not be available. And those four types of bundles are:

1. CMS bundles such as the BPCI (Bundled Payments for Care Improvement) and the CJR (Comprehensive Care for Joint Replacement) bundles, and we talk about the current state of said BPCI bundles, which are being sunsetted probably because so many efficient clinical teams are being penalized for getting too efficient. They become victims of their own success the way the program is currently designed, wherein the goalposts keep shifting.

2. Commercial bundles—ie, a bundle that is offered by a commercial carrier such as a BUCA (ie, Blue Cross Blue Shield/UnitedHealthcare/Cigna/Aetna/Anthem) carrier

3. Direct bundle—a bundle that is paid for directly by a plan sponsor such as a self-insured employer

4. Condition- or diagnosis-specific bundle. These types of bundles do not spiral around a surgical intervention at their core, which most of the current bundles do. Thi