Payment & Delivery

How insurers and providers are organized and paid to deliver care. Research by LDI Senior Fellows examines the shift from fee-for-service payments to newer models of paying for and delivering value, such as Accountable Care Organizations and Patient-Centered Medical Homes.

A Comprehensive Measure of the Costs of Caring For a Parent: Differences According to Functional Status

Research Brief
Oct. 10, 2018

Providing unpaid care for an older parent has costs that go well beyond a caregiver’s lost wages. A new estimate suggests that the median direct and indirect costs of caregiving are $180,000 over two years, about the same as full-time institutional care. This estimate accounts for lost earnings as well as non-tangible factors, such as lost leisure time and changes to the caregiver’s well-being. It suggests that informal care cost caregivers at least $277 billion in 2011, which is 20 percent higher than estimates that only consider lost wages.

The Current State of Evidence on Bundled Payments

Issue Brief
Oct. 8, 2018

A review of the evidence shows that bundled payments for surgical procedures can generate savings without adversely affecting patient outcomes. Less is known about the effect of bundled payments for chronic medical conditions, but early evidence suggests that cost and quality improvements may be small or non-existent. There is little evidence that bundles reduce access and equity, but continued monitoring is required.

Penn’s Gant Family Precision Medicine Consortium Takes on Sustainable Targeted Oncology

Sep. 20, 2018

Biomedical advances in genomics and oncology, combined with rising costs for targeted cancer therapies, challenge the way we currently deliver and pay for cancer care. To foster the economic sustainability of targeted therapies, the University of Pennsylvania convened the Gant Family Precision Cancer Medicine Consortium, a multidisciplinary work group of experts from health care economics, policy, law, regulation, biomedical research, patient advocacy, and the pharmaceutical and insurance industry.

Developing a Standard Handoff Process for Operating Room-to-ICU Transitions: Multidisciplinary Clinician Perspectives from the Handoffs and Transitions in Critical Care (HATRICC) Study

Sep. 5, 2018

Meghan B. Lane-Fall, Jose L. Pascual, Scott Massa, Meredith L. Collard, Hannah G. Peifer, Laura J. Di Taranti, Megan Linehan, Lee A. Fleisher...

Abstract [from journal]

Background: Operating room (OR)–to-ICU handoffs place patients at risk for preventable harm. Numerous studies have described standardized handoff procedures following cardiac surgery, but no existing literature describes a general OR-to-ICU handoff system.

Methods: As part of the Handoffs and Transitions in Critical Care (

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Association of Hospital Participation in a Medicare Bundled Payment Program With Volume and Case Mix of Lower Extremity Joint Replacement Episodes

Sep. 5, 2018

Abstract [from journal]

Importance: Medicare’s Bundled Payments for Care Improvement (BPCI) initiative for lower extremity joint replacement (LEJR) surgery has been associated with a reduction in episode spending and stable-to-improved quality. However, BPCI may create unintended effects by prompting participating hospitals to increase the overall volume of episodes paid for by Medicare, which could potentially eliminate program-related savings or prompt them to shift case mix to lower-risk patients.

Objective: To evaluate...

Debating Medicaid Rules for Mental Health Care

Aug. 10, 2018

In a recent Scattergood Foundation report, LDI Senior Fellow Dominic Sisti and I tackle the curious case of the “institutions for mental diseases” (IMD) exclusion in Medicaid. For non-elderly adults, the national IMD exclusion prevents Medicaid from paying for inpatient care in institutions with more than 16 beds that primarily provide care for persons with “mental diseases” other than dementia or intellectual disabilities.

Hospitals, Skilled Nursing Facilities, and Bundled Payment

Aug. 10, 2018

The Centers for Medicare and Medicaid Services has rolled out a number of bundled payment programs in the hopes that they will help to control costs and improve coordination and quality of care. A focus of these programs is the care delivered by skilled nursing facilities (SNFs) – a post-acute care setting that currently accounts for a significant portion of cost variation and spending in Medicare.

Differential Pricing of Pharmaceuticals: Theory, Evidence and Emerging Issues

Aug. 9, 2018

Abstract [from journal]

Differential pricing—manufacturers varying prices for on-patent pharmaceuticals across markets—can, in theory, lead to increased patient access and improved research and development (R&D) incentives compared with charging a uniform price across markets. Theoretical models of price discrimination and Ramsey pricing support differentials based inversely on price elasticities, which are plausibly related to average per capita income. However, these models do not address absolute price levels and dynamic efficiency. Value-based differential pricing theory...

Effect of Hospital and Post-Acute Care Provider Participation in Accountable Care Organizations on Patient Outcomes and Medicare Spending

Aug. 9, 2018

Divyansh Agarwal and Rachel M. Werner

Abstract [from journal]

Objective: To test for differences in patient outcomes when hospital and post‐acute care (PAC) providers participate in accountable care organizations (ACOs).

Data/Setting: Using Medicare claims, we examined changes in readmission, Medicare spending, and length of stay among patients admitted to ACO‐participating hospitals and PAC providers.

Design: We compared changes in outcomes

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