CardioVascular Care Providers. A pioneer in bundled services, shared risk, and single payment

Area of Science:

• Cardiovascular Surgery
• Healthcare Economics
• Health Services Research

Background:

• The Texas Heart Institute introduced a novel packaged pricing plan for cardiovascular surgery in 1984.
• This plan, CardioVascular Care Providers, Inc., consolidated all physician and hospital charges into a single, global payment.
• Initially offered to non-Medicare patients, it was later extended to Medicare beneficiaries undergoing coronary artery bypass grafting.

Purpose of the Study:

• To evaluate the impact of a packaged pricing model on cardiovascular surgery costs and patient access.
• To assess the benefits of bundled payments for payers and healthcare providers.
• To determine the feasibility and success factors of physician-directed, organ-specific bundled payment plans.

Main Methods:

• Implementation of a global payment package covering all services for cardiovascular surgery.
• Contracting with self-insured corporations, prepaid health plans, union trusts, and foreign governments.
• Extension of the model to Medicare patients for specific procedures like coronary artery bypass grafting.

Main Results:

• The bundled payment plan resulted in a lower overall flat fee compared to individual service charges.
• Demonstrated reductions in healthcare costs and improved patient access to cardiovascular procedures.
• Streamlined billing processes and enabled predictable expense forecasting for payers.

Conclusions:

• Physician-directed, organ-specific bundled payment models can successfully lower costs and enhance patient access in cardiovascular surgery.
• The simplicity and comprehensive nature of the plan contribute to its effectiveness.
• This reimbursement approach shows promise for wider adoption and is currently under evaluation by Medicare.