by fixing pricing and publishing cost and outcomes data. patients would be able to choose a provider based on a comparison of real data, not word of mouth. bundled payments may also encourage economies of scale - especially if providers agree to use a single product or type of medical supply - as hospitals or integrated health systems can often negotiate better prices if they purchase supplies in bulk. considerations before practices choose to participate in bundled payments, they need to be diligent in researching potential episodes of care that would be amenable to this type of reimbursement. traditionally, physician's quality monitoring and improvement is managed by the hospital's nursing sector. transitioning to a bundled payment methodology shifts accountability back to physicians, thus considerations for their delivery in an acute care episode is essential as well as realigning strategic nursing priorities to enable the needed capacity for care delivery transformation. once they have selected and defined an episode of care, they should: identify all associated costs list all services provided within the episode of care calculate how the care episode would be reimbursed identify how many entities would share in reimbursement involve physicians in care coordination create care delivery models to reduce waste, minimize redundancy, and improve provider communication identify the advantages of investing in home care options according to a february 2018 health affairs article, government as innovation catalyst: lessons from the early center for medicare and medicaid innovation models, "the initiative also highlighted business and operational barriers to implementing this approach. these included managing cash flows, developing budgets for episodes paid prospectively (rather than retrospectively), and reliably tracking providers' enrollment in a bundled payment model. convening organizations (such as premier or remedy partners, which brought multiple providers together to support implementation and sometimes shouldered some financial risk), could bring bundles to scale faster but introduced the additional complexity of a three-way arrangement among payer, convener, and provider." in case study: delivery and payment reform in congestive heart failure at two large academic centers, published in the july 2014 edition of healthcare: the journal of delivery science and innovation, the authors state, "convening organizations play a key role in providing technical assistance and implementation support. clinical leaders and health systems do not always have a complete set of tools for payment reform. thus, conveners contracted by cmmi, played a helpful role in catalyzing payment reform for their members." design options implementation of bundled payments can take many different forms. several of the key design dimensions include: prospective vs. retrospective payment: a prospective bundle pays a fixed price, established in advance, to a provider to deliver all services included within the bundle. a retrospective bundle initially pays each provider for services in the traditional fee-for-service payment method; after the completion of the episode of care, a provider designated as the accountable provider for the bundle receives a share of savings relative to the bundle price or pays a share of costs in excess of the bundle price. retrospective payment is sometimes called "virtual bundling." approach to risk adjustment: bundled payments often use a risk adjustment approach to modify the price of the bundle to reflect the severity of the patient's condition. payment methods vary on the basis of which factors are used to determine the risk adjustment (such a patient diagnoses from the past year, patient diagnoses from the past three years, patient medications) and how much each factor adjusts the price of the bundle. level of risk sharing: a bundled payment may be structured to offer upside (a share of savings if costs are below the bundle price), downside (a share of excess costs if costs are above the bundle price), or both. providers may bear all of the savings and/or excess costs (100% risk), or they may bear a fraction of the risk while payers continue to bear the rest. exclusions, tail risk, and stop-loss criteria: bundled payment models may choose to set up a variety of safeguards that limit the financial risk that providers bear under extreme circumstances. various forms of these safeguards include criteria excluding certain types of cases (such as patients with serious comorbidities), criteria excluding costs for cases in excess of a cost threshold (such as unusual cases whose cost is more than 3 standard deviations above the average), and stop-loss criteria limiting the downside that a provider will bear if the average cost is far above the bundle price. disadvantages the drawbacks of a bundled payment approach include: the scientific evidence in support of it has been described as "scant." for example, rand concluded that its effect on health outcomes is "uncertain." it does not discourage unnecessary episodes of care; for example, physicians might hospitalize some patients unnecessarily. providers may seek to maximize profit by avoiding patients for whom reimbursement may be inadequate (e.g., patients who do not take their drugs as prescribed), by overstating the severity of an illness, by giving the lowest level of service possible, by not diagnosing complications of a treatment before the end date of the bundled payment, or by delaying post-hospital care until after the end date of the bundled payment. hospitals may seek to maximize profit by limiting access to specialists during an inpatient stay. because one provider may outsource part of the care of a patient to other providers, it may be difficult to assign financial accountability for a given bundled payment. there is an administrative and operational burden, for example in establishing fair compensation rates. small sample sizes and incomplete data may cause difficulties in calculation of proper rates for bundled payments. if rates are set too high, providers may provide unnecessary services; if rates are set too low, providers may experience financial difficulties or may provide inadequate care. some types of illnesses may not fall neatly into "episodes." it is possible that one patient may have multiple bundles that overlap each other. academic health centers, which emphasize research, teaching, and new technologies, may be disadvantaged by the payment scheme. providers risk large losses, for example if a patient experiences a catastrophic event. a complex "reinsurance mechanism" may be needed to convince providers to accept bundled payments. a study by dartmouth medical school showed extreme variation in healthcare across the u.s. and attributed the inconstancies to a lack of standardized care protocols. currently, there is no nationally accepted bundled payment methodology defined, though continued experimentation is expected to lead to refinement.