Bundled Payment

Bundled payment provides a single payment for "bundles" of related services during an episode of care rather than paying the hospital, physicians, and other medical providers for each unit of service they provide. The expectation is that this approach will encourage providers to work together to provide more efficient and cost-effective care, eliminating duplicative and ineffective treatment.

Although bundled payment has been identified as the most promising option for reducing health care spending, little is known about its effectiveness on a broad scale and the approach is proving difficult to implement. Having conducted the only two objective evaluations to date of bundled payment experiments, PROMETHEUS and the IHA Pilot Evaluation, RAND is in a unique position to help the promise of this payment model be realized.

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