The U.S. Department of Health and Human Services (HHS) announced another initiative today designed to lower costs and improve quality of care. This latest effort focuses on improved care for patients while they are in the hospital and after they are discharged.

Doctors, hospitals, and other health care providers can now apply to participate in a new program known as the Bundled Payments for Care Improvement initiative (Bundled Payments initiative). The program will align payments for services delivered across an episode of care, such as heart bypass or hip replacement, rather than paying for services separately. Bundled payments will give doctors and hospitals new incentives to coordinate care, improve the quality of care, and save money for Medicare.

"Patients don't get care from just one person — it takes a team, and this initiative will help ensure the team is working together," said HHS Secretary Kathleen Sebelius. "The Bundled Payments initiative will encourage doctors, nurses and specialists to coordinate care. It is a key part of our efforts to give patients better health, better care, and lower costs."