Episodic, or bundled payments, is a concept now
familiar to most in the healthcare arena, but the models are often
misunderstood. Under a traditional fee-for-service model, each provider
bills separately for their services which creates financial incentives
to maximise volumes. Under a bundled payment, a single entity, often
referred to as a convener (maybe the hospital, the physician group,
or a third party) assumes the risk through a payer contract for
all services provided within a defined episode of care, and receives
a single (bundled) payment for all services provided for that episode.
The time frame around the intervention is variable, but defined
in advance, as are included and excluded costs. Timing of the actual payment
in a bundle may either be before the episode occurs (prospective
payment model), or after the end of the episode through a reconciliation
(retrospective payment model). In either case, the defined costs
over the defined time frame are borne by the convener. Cite this article:
