Background Note | HBS Case Collection | September 2011 (Revised August 2013)

Note on Bundled Payment in Health Care

by Regina E. Herzlinger and Charles C. Huang

Abstract

The note explains how bundled health care payment differs from fee-for-service payment; provides examples of the difference between the two; describes early innovators in bundling and their results; provides guidance on how to make it happen; and elucidates the legal issues bundling raises. Bundled payment will replace virtually all other health care payment formats. This note explains how and why.

Keywords: Health Care and Treatment; Health Industry;

Citation:

Herzlinger, Regina E., and Charles C. Huang. "Note on Bundled Payment in Health Care." Harvard Business School Background Note 312-032, September 2011. (Revised August 2013.)