Medicare uses the prospective payment system to pay a hospital a fixed amount of money for a hospitalization: the Diagnosis Related Group (DRG) payment. The DRG payment covers all hospital-related expenses, except for physician services. Most private health plans mimic this fragmented payment method. Given new payment models and the changing relationship between physicians and hospitals, it is time to reconsider bundling physicians into hospital payments. This commentary outlines the potential benefits of this payment change and discusses key implementation barriers.
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