New Pricing Approaches for Bundled Payments: Leveraging Clinical Standards and Regional Variations to Target Avoidable Utilization

Highlights • There is a growing need for payment models that enable closer alignment between reimbursement and best practice care. • New integrated payment models may give payers powerful mechanisms to reduce unwarranted variations through incentivizing care re-design across systems of providers. • Translating clinician-defined best practice standards to administrative data finds significant potentially avoidable utilization. • Potentially avoidable utilization occurs in all regions, with no single region uniformly achieving either optimal or worst care in all areas.