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Survey: Use of Bundled Payments Increasing, but Many Providers Remain Undecided

April 18, 2014
by Rajiv Leventhal
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The number of hospitals, hospital systems and physician groups that use bundled payments has increased, though many are still uncertain about participating in this healthcare financial system, according to a new survey from KPMG a N.Y.-based audit, tax and advisory firm.

In the KPMG poll of 140 healthcare providers conducted on March 26, 44 percent said they are "already working with bundled payments," up from 38 percent in KPMG's October poll on this same issue. Meanwhile, 29 percent remain undecided, down slightly from 36 percent in October. Interestingly, 7 percent said they had no intention to offer bundle payment plans—up from only 2 percent in the October poll. Twenty percent said they're not there yet, but plan to. The Center for Medicaid and Medicare Service (CMS) Bundled Payment program has an April 18 application deadline.

Similar to the October survey results, 42 percent of providers identified aligning physicians and hospitals as the greatest challenge in establishing a bundled payment plan. This sentiment reflects a history of misalignment between physicians and hospitals payment methods and operational goals. Nearly a third of respondents (32 percent) felt control of expenditures throughout the bundle posed the biggest challenge; while 16 percent believed the ability to harness performance information across the organization as the most significant barrier. 

Just as they were in KPMG's October poll, providers were almost equally split when asked about the key components of bundled payment strategies. Thirty percent indicated that the ability to harness and manage big data would lead to success. Twenty-eight percent felt providing resources for program design, administration, and provider contracting were necessary. Another 27 percent cited commitment from top leaders as critical. Fifteen percent believed an open mind to new ideas was essential.

"Hospitals and large physician groups are increasingly adopting bundled payment options as a means to enhance control over the total path of care (quality and cost) and to create a much more patient-centered experience," Marc Berg, KPMG's head of strategy and transformation for healthcare and life sciences, said in a news release. "Based on our study, 58 percent of providers say they are generating more than 15 percent of their revenues from risk-based methods, such as bundling. We expect those numbers to grow further as providers see how bundling can strengthen relations with physician groups and take steps toward becoming preferred partners with the health plans."

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