More Packaged Pricing For Baptist
Written by Scott Blake on May 23, 2013
By Scott Blake
Baptist Health is putting into action an alternative payment system called bundling at the company’s urgent care centers in Southeast Florida in line with the Obama administration’s efforts to rein in healthcare costs, according to a Baptist executive.
Baptist Health rolled out so-called "bundling" or "packaged pricing" in March at its 16 urgent centers in Miami-Dade and Broward counties, said Eric Shatanof, Baptist Health’s corporate vice president of managed care network development and medical management.
The company is next considering putting bundling into action at its "sleep centers" for the treatment of sleeping disorders and related problems, he said.
However, he said, Baptist Health has decided to hold off on using bundling throughout its seven hospitals in Southeast Florida.
"We looked at that," he told Miami Today, "but it didn’t make sense for us."
Bundling is an alternative to traditional fee-for-service healthcare where doctors and hospitals are paid for each service provided for each patient’s illness or course of treatment. Under the system, doctors, hospitals and other providers, and insurers consult and coordinate to determine a single payment for an episode of care before — not during or after — services are provided. The payment is then distributed to all of the individual providers and suppliers involved.
According to the Obama administration, more than 500 hospitals and related healthcare organizations nationwide have agreed to be paid in bundled payments as part of a three-year initiative to see if the system can lower the costs of the Medicare federal health insurance program for the elderly.
The US Patient Protection and Affordable Care Act — spearheaded by President Obama — aims to test such new payment systems, with the government’s primary goal being to rein in US healthcare expenditures without sacrificing quality.
Some private sector insurers already are providing bundled payments. Companies such as UnitedHealth Group, Humana, Aetna and most Blue Cross and Blue Shield plans are making bundled payments to groups of doctors and hospitals, according to Forbes magazine.
Mr. Shatanof said Baptist has used some form of bundling since 2001, when the company put it to use for patients paying completely out of pocket for elective medical services.
"We’re been taking the lead in bundling," he said.
Baptist Health has spearheaded such efforts through its Corporate Pricing Office, which Mr. Shatanof said has been recognized for its work.
The office provides pricing estimates, quotes and package pricing for pre-scheduled services for uninsured patients, as well as estimates of co-insurance, co-payments and deductibles for insured patients, based on their specific insurance benefits.
Baptist Health President and CEO Brian Keeley has said this new approach to pre-determining healthcare costs is essentially a reversal of a traditional "inherently inflationary" system in which services are provided and the costs are then tallied.
Under bundling, Mr. Keeley has said, if Baptist were to exceed the pre-determined price for treating a patient, it would absorb the extra costs. However, if Baptist were to come in under the pre-determined price, the doctors and Baptist would share in the savings.
In treating a given number of patients, bundling may be a breakeven proposition for Baptist financially, Mr. Keeley has said, but the business advantage would be that it would help the health system gain market share by being more price competitive.
Still, Mr. Shatanof said, bundling more easily lends itself to certain services and types of care where the costs are more easily determined up front, rather than for situations in which there are more variables and thus costs are harder to predict.
Meanwhile, Baptist Health is implementing "shared savings" initiatives beyond its urgent centers that work in a similar way to bundling, he said.
"A budget is set for what the spending should be" for a given patient scenario, he added, "and if we beat the target, the parties share in some of the savings."
Baptist Health has formed a task force to look at such payment systems, Mr. Shatanof said.
"We’ve had to do market studies on physicians’ fees; we’ve installed new computer systems for payments and adjustment of claims; we’ve negotiated contracts with physicians," he said.
Bundling has two parts — clinical management and financial management, Jon Henderson, a Dallas attorney specializing in healthcare law, said an interview with the American Association of Family Physicians.
"It’s a matter of getting the metrics right for ensuring payment for what physicians contribute to the patient’s care and then having the physicians’ financial expectations met in that business deal," Mr. Henderson said.
He said because a major theme of healthcare reform is lowering costs, that means favoring healthcare delivered by primary care doctors.
"Most everyone would agree," he added, "that a hospital is generally the most expensive setting in which to deliver healthcare."To read the entire issue of Miami Today online, subscribe to e-MIAMI TODAY, an exact digital replica of the printed edition.