Bundled healthcare

Strategy& offers healthcare clients a comprehensive and integrated suite of services for pursuing a bundled care strategy.

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.


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Bundled care (a care delivery and payment mechanism which offers a single price for all services associated with a procedure) has revealed...