Essentially a bundled payment is a fixed amount for taking on all aspects of financial and clinical risk for a patient for a given period of time. For example, if you are hospitalized for a knee replacement, you're essentially given a sum, just as the federal wait times did for a knee replacement. You're given a sum for that procedure, but it covers all aspects of care, including the physician care, the hospital-based care, plus all the rehabilitative care post-hospitalization. That may be in-patient rehabilitation or outpatient rehabilitation as well as some home care.
During that time you are financially at risk for re-hospitalization. Because re-hospitalizations are very expensive, we want to provide very effective care to keep people at home and rehabilitated.
Bundled payments are being implemented as a broad policy experiment in the United States to see if they will improve outcomes and reduce the rate of cost growth.
I have actually led some research in Ontario, using their utilization databases, which has proven that bundled payments are technically feasible, so I know they are technically feasible in some locales. There are opportunities to move in that direction for a good number of conditions.