Vermont Healthcare Pilot Program: Bundled Payments

Pilot programs are effective in doing a dry run to see if a given piece of legislation is going to be effective. Case in point is the pilot program for aromatherapy in postoperative patients. For the case of healthcare, there is lots of pressure to find a new and affordable way to provide medical care to people with dire financial circumstances. One initiative has been implemented on behalf of the Vermont Legislature (2011). This initiative outlined a way to “provide comprehensive, affordable, high-quality, publicly financed health care coverage for all Vermont residents in a seamless manner regardless of income, assets, health status, or availability of other health coverage” (Vermont Legislature, 2011, p. 1). The details of this initiative included a comprehensive payment system that is done over a given time period. In this way, patients would not have to incur high costs at the time of their visit. Ultimately, while this program has proven to reduce healthcare costs, it has impacted overall care quality and is difficult to implement across different providers.

The program was effectively implemented in Vermont and across a wide range of providers. According to Alan Panebaker (2011), “the state and hospital association applied to operate programs that would include bundled payments rather than a traditional fee-for-service payment where patients pay for each operation, test or visit individually” (para. 3). The paradigm shift from an on notice payment to a fee is much more effective for the patient and provider because they can retain financial sustainability. Vermont has initiated this pilot program in the hopes that it will be a great solution for the national stage as well. Ultimately, the pilot program’s vision for “moving close to a single-payer system and paying a single price for all of the health care services needed by a group of people for a fixed period of time” is a progressive program that has the capacity to change the way things work (Panebaker, 2011, para. 10).

While the costs are reduced in this pilot program, it does not effectively increase care quality. For example, Hussey, Mulcahy Schnyer, and Schneider (2012) conducted an in-depth study of pilot programs like these. The researchers concluded that “the introduction of bundled payment was associated with: (1) reductions in health care spending and utilization; and (2) inconsistent and generally small effects on quality measures” (Hussey et al., 2012, p. 75). Clearly, there are some promising aspects of this pilot program. People’s bills would be reduced and it would be more economically efficient for the providers to handle it. However, while “evidence provides some support that the programs are likely to be an effective strategy for reducing health care spending,” care quality is also important (Hussey et al., 2012, p. 75). Jirvanna Healthcare was successfully able to reduce spending with implementations such as these. Since the study found that there were few improvements to the quality, this pilot program should be evaluated further. It is vital that the providers still retain the same quality as the system intends to provide. 

This initiative also posed some implementation problems. For instance, coordinating among many different providers is a formidable challenge. Given that this program is only being done in one state, it may not be an end-all solution for the whole nation. According to Jim Hester, who was head of the committee that implemented the Vermont pilot program, “to really deal with the issues requires a transformational change in the system” (Panebaker, 2011, para. 8). This transformational change implies complex coordination among a plethora of different healthcare providers. Such cohesion may be impractical or take too long to implement. This may suggest that this solution may not be as comprehensive, but just a short term fix instead. Finally, the report by Hussey et al. (2012) found that “there were some reports of implementation difficulty” for many providers (Hussey et al., 2012, p. 76). The difficulties associated with the plan may suggest that national implementation and scaling may not be worth the effort if it will not work appropriately. 

References

Hussey, P., Mulcahy, A., Schnyer, C., & Schneider, E. (2012). Bundled payment: Effects on health care spending and quality. Evidence Report/Technology Assessment, 208, 1-76.

Panebaker, A. (2011, December 11). State to try "bundled" health care payment pilot program. VTDigger.org. Retrieved from http://vtdigger.org/2011/12/11/state-to-try-bundled-health-care-payment-pilot-program/

Vermont Legislature. (2011, May 26). No. 48. An act relating to a universal and unified health system. Vermont Legislature. Retrieved from http://www.leg.state.vt.us/docs/2012/Acts/ACT048.pdf