clinical innovations - Six Innovations - Innovation Number Four

Demand for transparency with bundled services and bundled billing arrangements

Reprinted from Physician Leaders, June 14, 2007

Soon health care services will be repackaged as bundled services with prices known in advance. This will share some features of packaged tours in the travel industry. Bundled services will partly be a response to a demand for transparency by HSA-card carrying consumers, spending their own money in high deductible plans, partly as reaction to consumer-demand for convenience and partly to give consumers a sense of precisely what to expect for the array of services needed for many chronic disease ailments.

Bundled services will require bundled bills by hospitals, specialists and others participating in providing services. It will require integrated teams of doctors, nurses and other paraprofessionals. It will require advance knowledge by consumers of the quality, price and outcomes provided.

To a limited extent, demands for transparency will replace fragmented fee-for-service model. But consumers will continue to frequent their own doctors, whose revitalized productive practices, will offer their own integrated services. Bundled services will make it easier for independent agencies to rank health services in terms of quality, outcomes and price. And it will be easier for consumers to comparison shop.

In the words of Regina Herzlinger, "In a consumer-driven health system, provider teams will name their price for bundles of care they create, reversing current, insurer-dictated prices for fragmented care and enabling consumers to reward excellence."