title: New pricing approaches for bundled payments: Leveraging clinical standards and regional variations to target avoidable utilization.
abstract: OBJECTIVE
  Develop pricing models for bundled payments that draw inputs from clinician-defined best practice standards and benchmarks set from regional variations in utilization.
  
  
  METHODS
  Health care utilization and claims data for a cohort of incident Ontario ischemic and hemorrhagic stroke episodes. Episodes of care are created by linking incident stroke hospitalizations with subsequent health service utilization across multiple datasets.
  
  
  METHODS
  Costs are estimated for episodes of care and constituent service components using setting-specific case mix methodologies and provincial fee schedules. Costs are estimated for five areas of potentially avoidable utilization, derived from best practice standards set by an expert panel of stroke clinicians. Alternative approaches for setting normative prices for stroke episodes are developed using measures of potentially avoidable utilization and benchmarks established by the best performing regions.
  
  
  RESULTS
  There are wide regional variations in the utilization of different health services within episodes of stroke care. Reconciling the best practice standards with regional utilization identifies significant amounts of potentially avoidable utilization. Normative pricing models for stroke episodes result in increasingly aggressive redistributions of funding.
  
  
  CONCLUSIONS
  Bundled payment pilots to date have been based on the costs of historical service patterns, which effectively 'bake in' unwarranted and inefficient variations in utilization. This study demonstrates the feasibility of novel clinically informed episode pricing approaches that leverage these variations to target reductions in potentially avoidable utilization.
authors.affiliation: Centre for Health Services and Policy Research, School of Population and Public Health, University of British Columbia, Vancouver, Canada.
authors.forename: Erik
authors.initials: E
authors.lastname: Hellsten
authors.affiliation: Centre for Health Services and Policy Research, School of Population and Public Health, University of British Columbia, Vancouver, Canada.
authors.forename: Scally
authors.initials: S
authors.lastname: Chu
authors.affiliation: The Children's Research Institute of the Children's Hospital of Wisconsin, Medical College of Wisconsin, Milwaukee, WI, USA.
authors.forename: R Trafford
authors.initials: RT
authors.lastname: Crump
authors.affiliation: Ontario Ministry of Health and Long-Term Care, Toronto, Canada.
authors.forename: Kevin
authors.initials: K
authors.lastname: Yu
authors.affiliation: Centre for Health Services and Policy Research, School of Population and Public Health, University of British Columbia, Vancouver, Canada. Electronic address: jsutherland@chspr.ubc.ca.
authors.forename: Jason M
authors.initials: JM
authors.lastname: Sutherland
mesh_terms: D003695:Delivery of Health Care / Q000191:economics / Q000706:statistics & numerical data; D017048:Health Care Costs; D018166:Health Care Reform / Q000191:economics / Q000458:organization & administration; D006801:Humans; D018803:Models, Economic; D009864:Ontario; D064872:Patient Care Bundles / Q000191:economics*; D017410:Practice Guidelines as Topic; D012051:Reimbursement Mechanisms / Q000458:organization & administration*; D020521:Stroke / Q000191:economics / Q000628:therapy
keywords: Bundled payment; Cost; Episode of care; Pricing; Regional variation; Stroke care