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The Value of Bundles

In the US health care market, value-based bundling—integrating all the care for a specific episode or procedure under a single price and with a warranty for a specific result—is a great way for providers to start competing on outcomes.

What does it take to compete effectively in the emerging market for bundled products?

  • First, a provider must make sure that its bundles create significant value for all the stakeholders in the system—cost savings and improvements in the quality of care for patients and plan sponsors as well as increases in patient volume and some share in the financial upside for clinicians.
  • Second, successfully implementing value-based bundling requires a shift in the way providers think about pricing and how they manage risk. Pricing needs to be fully transparent and intelligible to consumers, eliminating the cryptic bills and surprises of the traditional fee-for-service model.
  • Third, and perhaps most importantly, any bundling strategy must have strong support from the institution’s clinical community. Clinicians must take a leadership role in creating the right kind of patient experience and in defining the innovations in clinical practice that will deliver cost-effective improvements in health outcomes. Over time, embracing a bundling strategy will have implications for precisely what kind of clinicians a provider organization recruits and retains. There will be a shift away from specialists who focus primarily on performing a high volume of procedures toward clinicians who focus on delivering high-value care and whole-population health.
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