Chart of the Day: Impact of Participation in Bundled Payments for Physician Groups and Hospitals

Examining How Financial Savings Differ Across Participant Types

March 1, 2023

By:

Kaday Kamara

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Bundled payments are a key strategy used by payers to reduce costs around episodes of care. However, little is known about how well physician group practices vs. hospitals perform when participating in these alternative payment models. Medicare’s Bundled Payments for Care Improvement (BPCI) program, which covers the costs of medical and surgical episodes from hospital admission for up to 90 days of post-acute care, offers an opportunity to answer this question.

In a new JAMA Health Forum study, LDI Adjunct Senior Fellow Joshua Liao, Senior Fellow Amol Navathe, and colleagues examine cost outcomes in physician groups and hospitals participating in the BPCI program.

After assessing claims data from over 1.2 million Medicare beneficiaries, they found that spending for surgical episodes decreased similarly for hospitals and physician groups. However, for medical episodes, only hospitals achieved significant reductions.

As policymakers and payers continue to design and evaluate bundled payment models, they should consider how the performance of participant types compares to others for various types of care. In this study, hospitals seemed better positioned to achieve savings in medical episodes while both were successful around surgical episodes.

The study, “Performance of Physician Groups and Hospitals Participating in Bundled Payments Among Medicare Beneficiaries,” was published on December 9, 2022, in JAMA Health Forum. Authors include Joshua Liao, Qian Huang, Erkuan Wang, Kristin Linn, Torrey Shirk, Jingsan Zhu, Deborah Cousins, and Amol Navathe.