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3 lessons to take away from bundled-payment experimentation

A promising experiment aimed at reducing health care costs through changes to the payment system delivered underwhelming early results, but there's more to the story.

By Peter R. Orszag | Updated on September 07, 2018
Medical bill Experience with Accountable Care Organizations offers an encouraging lesson for bundled-payment models: Cost savings grow over time as providers learn how to work under the new rules. (Photo: Shutterstock)

Important new research published in the Journal of the American Medical Association on Tuesday showed that a promising experiment aimed at reducing health care costs through changes to the payment system delivered underwhelming early results. But there’s more to the story, and the research is exactly what should be happening as we transition away from fee-for-service payments.

First, some context. As noted previously, improving value in health care is not primarily about loading more responsibility on the consumer. Instead, most of the gains must come from changing provider behavior, since the bulk of what’s delivered in health care is what the doctor orders. And part of that, in turn, requires paying doctors and hospitals differently, since paying for volume rather than value produces more care instead of better care.

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