February 2021
Case
HBS Case Collection

New England Baptist Hospital: Getting Paid for Value

By: Robert S. Kaplan, Mary Witkowski, Toby E. Emanuel and Syed S. Shehab

Format:Print
| Language:English
| Pages:8

Abstract

New England Baptist Hospital (NEBH), a national leader in adult orthopedic care, has the lowest rate of complications and 30-day readmissions in New England, but gets paid 30% less for its surgeries than nearby institutions. NEBH introduces, with several large employers, bundled payment plans that cover the patient’s surgical treatment from day of surgery until discharge from the hospital and subsequent post-discharge care, including eight physical therapy appointments and treatment for any complications during 60 days post-surgery. But the new payment plan, even with a much lower price than the fee-for-service payments being paid to competitive institutions, has not led to increased patient volumes from employers. The case, in addition to facilitating discussion about design features for bundled payment plans, illustrates the challenges of a hospital leader trying to benefit from its better patient outcomes and lower prices when its payers─employers, health plans, and the government─change only slowly.

Keywords

Healthcare; Healthcare Spending; Healthcare Innovation; Healthcare Industry; Health Care Outcomes; Health Care Delivery; Health Care Reform; Bundled Payments; Health Care and Treatment; Spending; Innovation and Invention; Value Creation; Strategy; Health Industry; North America

Citation

Kaplan, Robert S., Mary Witkowski, Toby E. Emanuel, and Syed S. Shehab. "New England Baptist Hospital: Getting Paid for Value." Harvard Business School Case 121-036, February 2021.