Health care executives are facing new management challenges as payers shift more risk to providers. As evidenced by the Bundled Payments for Care Improvement initiative and, most recently, the Comprehensive Care for Joint Replacement model, hospitals are being pushed to assume greater risk for care episodes. This risk can extend well beyond the acute care discharge. Until recently, participation in BPCI programs has been optional, but that is changing. With the April 1 launch of the CJR model, the Centers for Medicare & Medicaid Services has mandated which hospitals will participate and how much they will be paid. The days of opting out of bundled payment initiatives are numbered.

What are the implications for health care executives as they assume responsibility for care that extends beyond the walls of their hospitals? They will need to minimize variation in cost and quality for a bundled payment episode. Larger integrated delivery networks that already offer post-acute care, like skilled nursing facilities and home health care services, typically have a leg up in managing cost and quality. But even these networks can face challenges if they have not invested in integrated care pathways, care management and transition resources and information systems.

Executives who are not part of an integrated network are navigating new terrain. They lack the formal mechanisms that might enable direct control of post-acute care, so they must establish relationships, processes and infrastructure to achieve coordination and control with trusted post-acute care partners. Only through these partnerships can they hope to deliver quality care at a cost below the established target price of the bundle.