How Hospitals Respond to Incentives in Bundled Payment Models for Joint Surgery

Commonwealth Fund May 18, 2021
Andrew D. Wilcock, Michael L. Barnett, J. Michael McWilliams, David C. Grabowski, Ateev Mehrotra

Toplines

Hospitals in bundled payment programs may respond to incentives in a way that undercuts the aim of delivering lower-cost care

Early cost savings from Medicare’s joint replacement bundle disappeared after hospitals responded to changes to the program

Hospitals in bundled payment programs may respond to incentives in a way that undercuts the aim of delivering lower-cost care

Early cost savings from Medicare’s joint replacement bundle disappeared after hospitals responded to changes to the program

The Issue

Episode-based payments, also known as bundled payments, are intended to incentivize hospitals and other providers to deliver more efficient care. However, some question whether hospitals in these models can take advantage of incentive structures in a way that undercuts the aim to deliver...

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