Companies Look To 'Bundled Payments' To Lower Health Care Costs

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Starting Oct. 1, Americans will be able to buy private health insurance through public exchanges created under Obamacare. (401(K) 2013/Flickr)
(401(K) 2013/Flickr)

Many Americans have been searching for health insurance plans that match their pocketbook. But insurance companies and individuals are also searching for less expensive health care, and they're taking some creative approaches.

One of these approaches is a new program called the Employers Centers of Excellence Network, which is being launched with large employers, including Walmart and Lowes.

Starting in January, employees of those companies will be able to get knee and hip replacements for free at one of four hospitals around the country, because the network has already negotiated the price of all of the patients' care with the hospitals.

In fact, their travel, hospital costs and the costs for a family member to come with them as caretaker are all covered, as long as they go to one of the hospitals in the system, instead of their own.

The process of negotiating costs for all steps of a procedure is called "bundled payments," and under the Affordable Care Act, Medicare did some experiments with it.

But does it actually save the customer money? And what happens when, during your procedure, additional care is needed that wasn't part of the package negotiated with the hospital?

Here & Now's Robin Young speaks to David Lansky, president and CEO of the Pacific Business Group on Health, which operates the Employers Centers of Excellence Network. He says the first consideration when constructing the network wasn't actually the cost of the care, but outcome.

“You save a lot of money — not on the initial cost of the operation, but not having to go back to the hospital over and over again for adjustments,” he says.

Robin Young also speaks with Matt Barry, senior health care analyst at Bloomberg Government, about the logistics behind bundling, and whether or not it makes sense for people to use.


This segment aired on November 13, 2013.


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