Episode-based (bundled) or capitated payment for delivery of quality care across multiple providers can be a significant stimulus of lower costs and improved clinical outcomes.  Implicit in such approaches is that it incentivizes better care coordination and cost-effective decision making.  The flip side of this equation is, of course, that provider organizations take on some measure of financial liability (i.e. they are “at-risk”) for shortfalls between quality and cost targets, and actual results.

Such models can be structured to retain professional autonomy and eliminate administrative controls on utilization.  But successful implementation of such approaches starts with some fundamental decisions and processes that must be in place.  This column explains these fundamentals so that participating physicians and their organizations can understand what it will take to be prepared to go at-risk.