The Catalyst … accelerating business growth in healthcare

Essential Healthcare Management Newsletter December 2016 Bundle Payments

Posted by Frank Ripullo on Fri, Jan 27, 2017 @01:53 PM


Rewarding Value over Volume: A look at Bundle Payments and Trends, Test your GPO Knowledge: Take EHM's GPO Quiz, EHM's Expertise



In 2015, the Centers for Medicare and Medicaid Services (CMS) announced the Comprehensive Care for Joint Replacement Model. Eight months ago, this value-based care model -- bundled payments, for the total cost of hip and knee replacement, went into effect for 800 hospitals across 67 metropolitan areas. With this model, the CMS is not just looking at the surgical costs but a full 90 days post surgical.

The cost impact will take into account physician costs, hospital stay costs, home care costs for the full care experience and outcome, including re-admissions. The hospitals will be required to maintain quality of care while at the same time take a 2-3% reimbursement cut for these procedures.

If any of us in the medical device or pharma space have learned anything over the years, we know we will be in the cross hairs for a significant contribution for this short fall. Yes, we are the lowest hanging fruit here!

As a medical-device company, what can you expect:

Expect that your decision makers will be asking for more proof sources and outcome data; Read More Here

small med large.png
From Small to Large, What Can Manufacturers Do to Gain an Edge?

It appears that the trend for Medicare continues toward value-based care.

What Are Your Next Steps?

  1. If you have not done so already, make sure you have collected data to show strong clinical outcomes. White Papers, poster presentation and published studies will be a requirement to success. Read More Here

TEST YOUR Group Purchasing Organization/Integrated Delivery Networks KNOWLEDGE!

Take our Quiz Now!

Quick Quiz: Test Your GPO/IDN Savvy!

EHM has a phenomenal track record of driving growth for its clients. EHM works with GPOs, IDNs and other group purchasing entities representing our clients using a thoughtful, opportunity-driven, and targeted approach. Our clients are suppliers who need national accounts direction to drive their business to the next level.

Group Purchasing Organizations (GPOs)

Hospitals have been using GPOs for decades to negotiate savings on purchases. GPOs usually operate by aggregating member purchases and using the large volume to negotiate discounts from vendors and manufacturers. GPOs earn their revenue from vendors based on volume of purchases made. IDNs are comprised of a network of physicians and hospitals and this aggregation helps to improve supply chain costs.

At EHM, We Work with Suppliers Dealing with the Reality of Bundle Payments

Bundle payments are designed to focus on quality of care versus quantity. Providers are awarded based on outcomes. Suppliers are showing they care by helping providers through the creation of data services to help improve the process.

Do Suppliers Need to Care?

You may be familiar with a hospital system that sets a fixed price for the supplies they need for lower extremity joint replacements. In these instances, the hospital’s physician network would accept or challenge the scenario. These doctors expected to share risk under the bundle payment model are the very doctors that bring in the orthopedic cases. Champions of particular products will have difficulty switching based on cost. The risk to publicly-traded suppliers is protecting their ASP. These types of suppliers require price protection.

Abandoning the traditional fee-for-payment model, bundle payments were first proposed by Centers for Medicare and Medicaid Services (CMS) to encourage both providers and physicians to work together across the continuum of care thereby sharing risk by providing all services using a new kind of reimbursement model. This strategy of value-based care has been adopted by many hospitals across the nation. While there is support for value-based payments, it remains an “act of faith” until enough data becomes available to observe clear outcomes. Read more about bundle payments here.

The Team at EHM Wishes you and yours a Happy, Healthy Holiday Season and Best Wishes for a Marvelous 2017!

See Upcoming Conferences 2017 

We Are a Team of Target-Driven, National Accounts Professionals

Our team navigates the multi-faceted landscape of healthcare contracting putting our clients on the fast track. It is by design that we deliver. Quite simply, with nominal monthly retainers, we gain a large part of our reward based on results.

Nearly a Decade of Dedicated Client Services!
EHM has been working with GPO’s since 2007 and has represented hundreds of suppliers in all areas of medical manufacturing. EHM began with a refined knowledge and expertise gained from hundreds of hours of work in the field created to fulfill manufacture’s needs for GPO expertise.

Yes! Let's have a conversation. 

Get in touch with us. Call (949) 842-2520 to speak to a contracting professional.