The concept of bundled pricing is gaining momentum as a reimbursement model designed to address demands for better health outcomes at lower cost. Promising to deliver a standardized set of services for a fixed price with specific quality commitments will create incentives — lacking in the current fee-for-service payment system — for providers to align their efforts to contain underlying costs. Better alignment will focus attention on such issues as overutilization, technology choices, and inadequate coordination across the care continuum, which can drive meaningful change in cost and quality. To successfully adopt this model and achieve better care at lower cost, providers face three main financial challenges.

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