Why bundled payments could drive innovation: an example from interventional oncology

Some have suggested that the current fee-for-service health care payment system in the United States stifles innovation. However, there are few published examples supporting this concept. We implemented an innovative temporary balloon occlusion technique for yttrium 90 radioembolization of nonresectable liver cancer. Although our balloon occlusion technique was associated with similar patient outcomes, lower cost, and faster procedure times compared with the standard-of-care coil embolization technique, our technique failed to gain widespread acceptance. Financial analysis revealed that because the balloon occlusion technique avoided a procedural step associated with a lucrative Current Procedural Terminology billing code, this new technique resulted in a significant decrease in hospital and physician revenue in the current fee-for-service payment system, even though the new technique would provide a revenue enhancement through cost savings in a bundled payment system. Our analysis illustrates how in a fee-for-service payment system, financial disincentives can stifle innovation and advancement of health care delivery.