Pay It Forward

By Charlie Miraglia

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In this inspirational film from 2000, a young boy creates a good will movement that is all about helping others without expecting anything in return, while inspiring others to do the same. In our current healthcare environment, the parallel I see to this film is that the new value-based models are all about the end game of better health – without focusing on the transactional value (cost) of each step of the process.

This is most apparent in the new bundled payment models, where a set fee or budget is “paid forward” to the healthcare providers who in turn, deliver all of the care required for the particular episode of care in question. Although no one truly enjoys change of any kind (especially as it relates to how you get paid), this type of model seems to be growing in popularity. In reality, it’s much more likely that this model is simply much less daunting than other at-risk payment innovations, so it’s a little easier to get buy-in from hospitals and physicians.


One of the biggest advantages of bundled payment models is that they encourage better teamwork, which should result in better outcomes and greater patient satisfaction. Incentives are more aligned to improve care coordination throughout the patient’s journey, which should decrease system-wide waste and lead to a higher quality of services. However, communicating across the entire continuum of care will be critical to this model’s success, since the bundle includes all phases of care: acute, post-acute, rehab, etc.

For this reason, the first of these models to emerge has been centered on the “comprehensive care for joint replacement” (CCJR), created by CMS to test bundled payment and quality measurement for an episode of care associated with hip and knee replacement surgeries. Hospitals and physicians engaged in the CCJR model will work together to improve the quality and coordination of care from the initial hospitalization through recovery for a single total payment to be shared by all providers. Once again, success is predicated on data sharing across the continuum of care.

It seems reasonable to “wrap up” an episode of care in a neat little bundle as I’ve described for the case of a hip or knee replacement. It’s probably not a bad first step in the arduous process of transforming healthcare. However, applying this model to more complex situations is a lot more challenging. For example, patients with comorbidities and complicated chronic illnesses like Diabetes or Cancer are much more difficult to fit into a simple episode of care “box”. On the other hand, this may be just the spark needed to stimulate providers to work together to become more efficient and cost-effective in their treatment protocols, including the use of expensive specialty pharmaceuticals.

Unfortunately, we’re still living in a fee-for-service world – at least for now – so change is likely to come slowly. As new models emerge, some will be more enthusiastically embraced by hospitals and physicians than others. Trial and error will no doubt get us to where we need to be – eventually. In the meantime, those on the front lines of healthcare will continue to do their jobs the best way they know how, regardless of how they get paid for it.

Dr. Charlie Miraglia is hc1’s Chief Medical Officer and resident movie buff. You can connect with him on Twitter @ccmiraglia.

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