Allocating global package pricing. The example of bypass surgery

When health care organizations announce a change in rates paid to physicians, determining how to equitably distribute the new allocation can be a problem. Package pricing requires practitioners to justify their fees or costs to their colleagues and negotiate for a "specific piece of the pie." While this approach has many models, there are few actual examples. When some successful ones are developed, they should include an economic model which allows a practice to make business decision about marginal production opportunities that are in the best interest of all parties involved. Steps include determining actual costs, historical charge patterns, historical payment patterns and Medicare payment rates.