Bundled payments with copay waivers reduce surgery costs for patients, payers

Editor's Note

A RAND Corporation study published in the March Health Affairs finds that health insurers and patients can achieve significant savings when they participate in a bundled payment program that waives cost-sharing for patients.

Researchers examined a bundled payment program developed by a private insurer that ran from 2016 to 2020. The bundled payment, which covered all related care given within a 30-day period, waived cost-sharing for patients who chose to receive care from bundled payment providers, including healthcare systems and surgeon groups.

A range of procedures were covered by the bundled payment contracts, but the researchers focused on the three most common—spinal fusion, total knee and hip replacement, and bariatric procedures. A total of 2,372 procedures were included.

The researchers found that the program reduced total surgery costs by an average of $4,229 for the three procedures, a 10.7% relative reduction. Cost-sharing payments were waived for 21% of patients, whose out-of-pocket costs decreased by $498 per episode, a 27.7% relative decrease.

The results show that direct payment programs that use bundled payment mechanisms can have financial benefits for both employers and patients, the researchers say.