A Jay Holmgren Doctoral Student, Health Policy and Management Harvard Business School

Voluntary Bundled Payment Program For Care After Acute Hospitalization Unable to Achieve Broad Participation

MedicalResearch.com Interview with:

A Jay Holmgren Doctoral Student, Health Policy and Management Harvard Business School

A Jay Holmgren

A Jay Holmgren
Doctoral Student, Health Policy and Management
Harvard Business School

MedicalResearch.com: What is the background for this study? What are the main findings?

Response: Post-acute care, care that is delivered following an acute care hospitalization, is one of the largest drivers of variation in US health care spending.

To address this, Medicare has created several payment reform systems targeting post-acute care, including a voluntary bundled payment program known as the Model 3 of the Bundled Payment for Care Improvement (BPCI) Initiative for post-acute care providers such as skilled nursing facilities, long-term care hospitals, or inpatient rehabilitation facilities. Participants are given a target price for an episode of care which is then reconciled against actual spending; providers who spend under the target price retain some of the savings, while those who spend more must reimburse Medicare for some of the difference.

Our study sought to evaluate the level of participation in this program and identify what providers were more likely to participate. We found that fewer than 4% of eligible post-acute care providers ever participated in the program, and over 40% of those who did participate dropped out. The providers more likely to remain in the program were skilled nursing facilities that were higher quality, for-profit, and were part of a multi-facility organization.

MedicalResearch.com: What should readers take away from your report?

Response: In this case, a voluntary bundled payment reform program was unable to achieve broad participation amongst post-acute care providers. If policymakers want to continue targeting post-acute care providers with bundled payments directly, they may want to explore mandatory programs or stronger incentives in order to achieve levels of participation that can move the needle on Medicare post-acute care spending.

MedicalResearch.com: What recommendations do you have for future research as a result of this work? 

Response: We still need to find new ways to control costs in post-acute care. Future work should continue to evaluate policy programs for effectiveness. Researchers may also wish to further evaluate the success of bundled payment programs in their attempts to achieve broad participation and reduce spending.

No disclosures 


Holmgren AJ, Adler-Milstein J, Chen LM. Participation in a Voluntary Bundled Payment Program by Organizations Providing Care After an Acute Hospitalization. JAMA. Published online June 25, 2018. doi:10.1001/jama.2018.8666 

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Last Updated on June 26, 2018 by Marie Benz MD FAAD