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Bundled Episode Payment and Gainsharing Demonstration Project (Text Version)

Slide presentation from the AHRQ 2010 conference.

On September 27, 2010, Weslie Kary made this presentation at the 2010 Annual Conference. Select to access the PowerPoint® presentation (900 KB).  

Slide 1

Bundled Episode Payment and Gainsharing Demonstration Project

Bundled Episode Payment and Gainsharing Demonstration Project

Agency for Healthcare Research and Quality
2010 Annual Meeting
September 27, 2010

Weslie Kary, MPP, MPH
Program Director
Integrated Healthcare Association

Slide 2



  • What is bundled or "episode" payment?
  • Why do it?
  • IHA bundled episode and gain-sharing demonstration and evaluation plan.

Slide 3

What is bundled (episode) payment?

What is bundled (episode) payment?

  • A single prospective price for all services needed by the patient over an episode of care.
  • Defined on parameters of time and services.

Image: Table showing things that might be included in a episode definition bounded by time and services, for example: pre-admission services including physician services, imaging, and drugs.

Source: Center for Healthcare Quality and Payment Reform, Transitioning to Episode-Based Payment (

Slide 4

Why bundle? Problems with current payment options

Why bundle? Problems with current payment options.

  • Fee for service: rewards volume of services, not appropriateness or coordination of care.
  • Global capitation: shifts too much risk to providers, creates incentive for risk selection.
  • Pay-for-performance: when framed as quality bonus, does not move enough money.

Is bundled payment a workable compromise?

Slide 5

Some people think so . . .

Some people think so.


  • Expand ACE Demo, include post-acute care by 2013.
  • Demonstrate in Medicaid population by 2012.
  • Bundle payments in ACO.

Images: Representative organizations that believe bundled payment is a workable compromise, including: CMS ACE Demonstration (the seal of approval that participants are allowed to use in marketing); a photo of the executive team of the Geisinger ProvenCare™ Health plan; a chart of the Prometheus Payment™ (another pilot program); and a photo of Congress, which approved an expansion of episode payment pilots in PPACA.

Slide 6

IHA Demonstration Project

IHA Demonstration Project

  • Focus: Major procedures and acute conditions, orthopedic first → cardiac and other.
  • First participants: Monarch HealthCare, Cedars-Sinai, Hoag Hospital, Saddleback Memorial, Tenet, UCLA, Aetna, Blue Shield, CIGNA, HealthNet → all California.
  • First populations: Commercial PPO → HMO, Medicaid Managed Care and Medicare Advantage.
  • Episode definition: Date of surgery + 90 days, includes acute and routine follow-up, complications within 90-days, related readmits.

Slide 7

Demonstration evaluation

Demonstration evaluation

  • What happened? Was model scalable? What facilitates success, what bodes failure? (RAND: Susan Ridgely, Peter Hussey)
  • Was quality of care for orthopedic patients maintained compared to control hospitals? (U.C. San Francisco: Kevin Bozic, Steve Takemoto)
  • Did efficiency go up, costs of care go down compared to baseline period? (U.C. Berkeley: James Robinson, Samuel Tseng)

More info:

Current as of December 2010
Internet Citation: Bundled Episode Payment and Gainsharing Demonstration Project (Text Version). December 2010. Agency for Healthcare Research and Quality, Rockville, MD.


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