What are "bundled payments" in healthcare?

Bundled payments represent a significant shift in the way healthcare services are reimbursed. This payment model consolidates payments for multiple services that are provided during a single episode of care. Essentially, it means that a single, predetermined payment covers all the necessary services and costs associated with a specific procedure or treatment, rather than billing separately for each individual service.

This model encourages efficiency and collaboration among healthcare providers, as they must work together within the fixed payment structure to deliver quality care and manage costs effectively. This approach aims to improve care coordination, reduce unnecessary services, and ultimately enhance patient outcomes while managing healthcare costs. By aligning financial incentives among various providers involved in a patient's care, bundled payments can lead to more streamlined services and a focus on patient-centered care.

In contrast, other payment models mentioned either focus on specific types of care or outcomes, such as preventive care or patient satisfaction, without the same comprehensive approach to bundling payments for an entire episode of care. Additionally, the direct payment model for patients does not encapsulate the collaborative aspects of care that bundled payments are designed to address.