Bundled Healthcare

As the healthcare industry moves towards a more consumer-centric, value-based model, we at Strategy& see bundled care, if executed correctly, as offering the greatest potential to transform the industry. In sharp contrast to the current Fee-For-Service (FFS) paradigm in which hospitals and physicians receive separate payments for every activity, under a bundled payment, providers accept a fair, agreed-upon price for an entire episode of care, and patients are afforded transparency into the full care process. Where FFS encourages over-use, the bundle financially motivates providers to provide the lowest cost care that still delivers high-quality outcomes, and requires that providers begin to take on the financial risk.

Successful bundle pilots demonstrate that the shift in cost and quality requires a wholesale transformation in care delivery, not only changing payment but also re-organizing care around the patient and his or her medical condition. Strategy& represents this delivery transformation via prospectively priced and paid, chronic and acute care products. We have researched and published widely on the topic.

By improving outcomes and reducing costs, bundled care represents a rare win-win for the demand side (patients and employers) and the supply side (payors and providers) regardless of how the Affordable Care Act (ACA) plays out. In fact, the underlying philosophy of bundled care — better ways to treat patients, new partnerships, and new approaches to pricing — can function as part of many solutions.

As bundles (as opposed to individual activities) become the new locus of competition in healthcare, industry players will have to build new capabilities and differentiating strategies. In the future, a system of bundled products can serve as the backbone of a provider’s population management program. Where negotiation power and reputation once spelled success, health industry players will have to mobilize to not only deliver but also communicate value at the bundle level. Whether making a focused bundle play, converting completely to bundles or holding back as others forge the path, all industry players will have to consider the impact of this shift to value.

Strategy& Annual Bundles Survey 2015/2016 Results
We sponsor an annual nationwide multi-stakeholder survey to gauge industry progress and attitudes toward bundles. This year's survey shows bundle adoption at a critical turning point, but there is still a mismatch between provider activity and employer needs.

Our thought leadership

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Bundled care has revealed itself to be an essential component of any future care delivery model that intends to deliver better care and outcomes at a reduced cost.
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In a bundle, a single fee covers everything related to a condition or procedure in an end-to-end construct that has the potential to vastly improve the consumer’s experience.
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This perspective presents survey data from providers: physicians and hospitals.
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This report provides an overview of healthcare bundles, including the history of their development and the outlook for their future.
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A bundled approach to treatment offers higher quality, lower costs, and a better experience for patients.

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How we help our clients

Strategy& offers a comprehensive and integrated suite of services designed to support bundle strategy, design, and implementation:

Enterprise strategy
Although we firmly believe bundles will play a critical role in the healthcare of the future, industry players will, and should, choose to engage in different ways. Some may select a bundles-only strategy; some may see bundles as part of a larger population health move. These decisions should be made in the context of an overall enterprise strategy, and Strategy& can help define this holistic vision. Payors and providers alike will have to make choices about how and when to play with respect to bundles.

Bundle go-to-market
Once a provider or payor has chosen to pursue bundles, many decisions remain — what to bundle, how to promote, position and price, who to partner with or sell to, and how to engage the physicians and other providers necessary to execute. Given not only health care and bundles experience but also deep expertise in BtoB and BtoC marketing, Strategy& helps clients identify the key questions they need to answer to arrive at a clear go-to-market plan that will enable success for each unique situation.

Bundle capability identification and design
Based on our work across many bundle initiatives, we are able to help clients identify both the necessary capabilities and the key gaps they will have to fill in order to succeed under a bundles strategy. We help clients do the detailed design necessary to not just prepare for different reimbursement but to truly re-organize care around the patient.