What does the term "bundled payment" refer to in healthcare?

The term "bundled payment" in healthcare refers to a single payment that covers multiple services related to a specific treatment or condition. This payment model is designed to streamline costs and improve efficiency in healthcare delivery. Rather than billing separately for each service provided during a patient’s treatment—which could include consultations, tests, procedures, and follow-up visits—healthcare providers receive one comprehensive payment that encompasses all of these services. This approach encourages coordinated care and can lead to more effective management of patient outcomes while potentially reducing overall healthcare costs.

This payment model contrasts with other structures that may emphasize individual service billing or discount arrangements, which do not capture the holistic nature of treatment for specific medical conditions. Instead of dealing with a fragmented payment system, bundled payments promote collaboration among healthcare providers, fostering a greater focus on patient care as a whole.