OMIS Seminar: Gain-sharing Agreements in Bundled Payment Models
November 25, 2019 @ 8:00 am - 5:00 pm
Operations Management and Information Systems (OMIS), Schulich School of Business, York University
Salar Ghamat, Ph.D.
in Seminar on
Wednesday, November 27, 2019, 11:30am-1:00pm
W357 Seymour Schulich Building
“Care-coordination: Gain-sharing Agreements in Bundled Payment Models”
In this study we examine the use of gain-sharing agreements in bundled payment models that capture the cost of a patient’s treatment from a hospital and a post-acute care provider. Our work is inspired by the Centers for Medicare and Medicaid Services’ (CMS) Comprehensive Care for Joint Replacement (CJR) bundled payment model that offers hospitals a fixed bundled payment for a patient’s treatment expenses during acute and post-acute care. This bundled payment model aims to incentivize hospitals to enter into agreements with providers to ensure that the billing charged to the healthcare payer and care quality meets the bundled payment requirements. We model the interaction between three parties—a hospital, a post-acute care provider and a healthcare payer, in which they can only treat a patient and achieve the desired quality of care with collective effort. We show that while using a gain-sharing agreement might be a “win-win-win” scenario for the three parties, good design of the payment scheme by the payer is essential to incentivize a hospital to participate in the bundled payment model (e.g., CJR) and sign a gain-sharing agreement with the provider. Furthermore, we show that the provider prefers a low target price, such that to achieve the bundled payment requirements the hospital needs to coordinate patients care with the provider. Finally, we illustrate that a target price-minimum quality bundled payment model would be more effective, in care-coordination, in healthcare settings where the provider is much more effective than the hospital in reducing its billing.
Salar Ghamat is an Assistant Professor at Lazaridis School of Business & Economics, Wilfrid Laurier University. Salar received his Ph.D. in Management Science from Ivey Business School (Western University) in 2018, MSc in Operations Research and Management Science from Tilburg University, and MBA from Bilkent University. His areas of research include co-opetition and counterfeiting in supply chain management, and value-based payment models in healthcare operations management.