There are two things people often mention when they talk about health care frustrations. They want:
- A bill they can actually understand.
- A price they can compare in advance.
Of course, that’s not the way that most health care is purchased. In our current “fee-for-service” health care system, each separate item or service carries a separate fee, which usually makes it impossible to know what a surgery or test will cost in advance.
Health care bundles are the exception. Health care bundles are now available for many surgeries and tests.
When you buy health care in a bundle, it means you:
- Pay a single price for many different services that are part of a surgery or test.
- Know the price in advance.
- Typically save a significant amount when compared to buying the services one-by-one and fee-plus-fee.
Unfortunately, not every surgery or test can be easily turned into a bundle of care. Surgeries and tests typically work well as a bundle when they:
- Are not emergencies. That means that patients have time to “shop” for care and compare prices.
- Can be delivered in an outpatient setting. Bundled prices can sometimes be used for “inpatient” care, where the patient stays in the facility overnight. For example, The Alliance QualityPath program offers bundled prices for some inpatient joint replacements, as well as outpatient colonoscopies and MRI and CT scans. But most surgeries and tests with bundled prices are available only for outpatient care. These outpatient options usually have the greatest savings for employers.
- Are available from many different providers. That means patients have an opportunity to compare their options for where to have care. At The Alliance, for example, patients can choose between multiple bundled providers as well as traditional fee-for-service care for many surgeries and tests. Well-known providers who offer “bundles” for care and are part of The Alliance network include NOVO Health, Twin Cities Orthopedics, and Marshfield Clinic Health System.
An Employer Opportunity
Knowing the price in advance gives employers the opportunity to decide whether to offer incentives for using bundled care. If you can know you can save hundreds or even thousands of dollars on a surgery or test by using a specific bundled provider, for example, you may decide to share a portion of the savings with employees as a way to increase participation.
Encouraging employees to choose a bundled provider also helps employers begin to move away from buying health care on a fee-for-service basis. We all know that fee-for-service health care prices vary wildly from provider to provider and from service to service, even when a provider network provides discounts on the cost of care. Bundled pricing provides a framework that lets you fairly compare these prices and make clear decisions.
The health care marketplace has a long way to go before we can all make sense of bills and pricing. In the meantime, buying care in a bundle is one way to gain savings while helping the market find better approaches to paying for care.
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- View providers who offer bundled procedures.
- Compare bundle pricing offered by The Alliance.
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- What RAND Corporation’s Hospital Price Transparency Project (RAND 3.0) Means For Employers - September 22, 2020