Bundled Payments And Partnerships

By Kimberly Hartsfield, MPA, Vice President, The Camden Group

As bundled payment programs are expanding across specialties, payers, and sites of care, it is becoming increasingly clear that the path to success can be summarized in one word: partnerships.

Who is your Apple?

Consider the successful partnership between Nike and Apple. Although they are in different industries, their commonality lies in their customers. As a result of their partnership, both companies have experienced enhanced brand recognition, in addition to significant market and sales growth. Nike CEO, Mark Parker said about their partnership with Apple, “As I look ahead at what’s possible with Nike and Apple…technologically we can do things together that we couldn’t do independently. So yeah, that’s part of our plan, is to expand the whole digital frontier and go from…25 million Nike+ users to hundreds of millions (theverge.com).”[1] Who is that perfect partner that you had not previously considered, and what can you accomplish together?

Why it Matters

How do these strategic partnership examples apply to healthcare? The same patient that has an inpatient stay and is discharged to a post acute care facility has one goal: to get home painfree as fast as they can. Bundled payment arrangements are holding both providers accountable very differently than the traditional feeforservice model. How can potential partners leverage one another to expand their existing capabilities and utilize resources in innovative ways? All provider organizations are facing demand destruction pressures, and partnering may help both parties retain much needed volumes and revenues, while continuing to provide excellent patient quality. New relationships between providers, and between payers and providers, are being forged to advance payment transformation efforts through bundled payments. Providers are looking beyond their four walls, obtaining, analyzing, and sharing data, and partnering across the care continuum to enable patientcentric care delivery with a new focus on value and total cost of care. Identifying the right partner organizations is paramount to a successful bundled payment program. Providers should consider partnerships with organizations that are innovative, philosophically aligned around valuebased care, costefficient, and high performing in their markets. Today’s strategic partnership evaluations require a willingness to look beyond the closest geographic provider or the provider organization that has historically been the preferred referral choice. Publically available data from sources such as CMS Hospital Compare, Nursing Home Compare, Home Health Compare, Physician Compare, and Dialysis Facility Compare enable providers to proactively evaluate and identify potential candidates for partnership.

The Right Sandbox

Bundled payments are the perfect testing ground for partnerships where gainsharing programs can be established to strengthen provider engagement and evaluate potential for longterm strategic alignment. This allows participants to demonstrate their ability to eliminate unnecessary variation in care and meet the agreed upon goals of the program without assuming risk that providers may not be prepared to manage. Bundled payment programs and ACO initiatives can be very complementary, and many organizations are choosing to pursue both simultaneously. The ability to expand the external focus and consider the full continuum of care requires very different commitment and communication between providers. Partners must develop innovative solutions and continue to make IT investments to overcome the frequent inability of EMRs to transmit data between different platforms and providers. They must also be willing to collaborate clinically through the standardization of care protocols and/or seamless coordination across care settings. Perhaps more importantly, they must be willing to demonstrate mutual accountability for patient outcomes and the total cost of care. [1] http://www.theverge.com/2014/10/23/7044999/nikeapplewearablespartnership

Ms. Hartsfield is a vice president with The Camden Group. She specializes in payment transformation strategies with a focus on designing and implementing Medicare and commercial bundled payments. She frequently presents on a variety of topics including value based payment models and provider engagement. She may be reached at khartsfield@thecamdengroup.com or 501.940.2526.