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Centers of Excellence & Bundled Payment

CHANGING INCENTIVES changes care

Costs for episodes of care can vary significantly around our state. For example, based on an analysis of Alliance member data, the median cost of knee replacements at Maine hospitals ranges from $30,000 to $50,000, and studies suggest there is little or no correlation between cost and quality.

In addition to the wide variation in cost, financial incentives in our current fee-for-service system reward the volume of services delivered rather than well-coordinated, safe care with the best outcomes.

To address these issues, the Healthcare Purchaser Alliance of Maine partners with Carrum Health to offer episode-based bundles of care that are delivered at the highest quality centers of excellence. Purchasers are able to pay one consistent upfront payment for all the services associated with over 90 episode of care. This approach has been shown to lower costs, improve outcomes, and enhance patients’ experience of care. 

In markets where Carrum Health is being utilized, purchasers are realizing significant savings on the highest quality services. In addition to bundled rates that are 25-40% below market average, Carrum Health’s center of excellence providers also offer warranties on their services, and through shared decision-making they redirect patients to less invasive, more appropriate care 15-40% of the time.

The Alliance believes that centers of excellence and bundled payment programs create the right incentives to promote high-quality, efficient, coordinated care that can be purchased at a competitive price.