How Do You Construct a Bundle?

(Post Three in a series)

By Joanne Conroy, MD

We are now getting into the real grit of how you actually construct a bundle. Saying that you will name one price for an episode of care (including hospital, physician, and post-acute care for 30 to180 days post-discharge) seems simple… It is anything but!

Take a condition like pneumonia. The steps to creating a bundle include deciding what DRGs (codes that describe a bundle of services for a hospital stay) are in the bundle. For pneumonia, our working group decided to use DRGs 177 – 179 (Respiratory infections & inflammations with and without complications) and 193-195 (Simple pneumonia & pleurisy with and without complications). We did not include COPD and Asthma DRGs because the optimal management of those chronic processes was different from the acute care of pneumonia.

We decided to include nearly 30 hospital-acquired conditions and another 25 potentially avoidable complications as relevant to the anchor admission. We also identified almost 25 relevant readmission DRGs—readmissions that would be linked to the anchor admission and included in the bundled pricing—and excluded hundreds of others that were irrelevant. The relevant readmissions ranged from respiratory failure, AMI, and cardiac arrest to COPD and asthma. One unanswered questions is, What about diabetes and CHF? Many elderly patients have these co-morbidities; their exacerbation can be linked to management of the acute pneumonia admission.

The group is wondering whether to go big—cast the net wide and examine more savings opportunities—or go narrow, targeting only what the AMCs can directly control. We know from many analyses that the real opportunities for savings are in the post-acute period, managing the expensive readmission and standardizing how and where post-acute care is delivered. This is foreign territory for many hospitals.

The saving grace of the methodology is that the goal is to beat your own hospital costs by at least 3 percent. So unless your patients become far sicker or technology dramatically changes how you deliver care (think laparoscopic surgery), your savings targets should not be a surprise and should be achievable.

—Joanne Conroy, MD, is Chief Health Care Officer at the Association of American Medical Colleges. She can be reached at Follow her on Twitter @joanneconroymd.