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Getting “Bundle Ready”: How Provider Organizations Can Design Clinical Pathways in the Context of Bundled Payments

Authored by

Joshua M Liao, MD, MSc, FACP1; Christopher Chen, MD, MBA2


1Department of Medicine, University of Washington School of Medicine; Value and Systems Science Lab, UW Medicine, Seattle, WA 

2Valley Medical Center, UW Medicine; Value and Systems Science Lab, UW Medicine; Seattle, WA


The authors report no relevant financial disclosures.


J Clin Pathways. 2019;5(1):49-51. doi:10.25270/jcp.2019.02.00056
Received October 16, 2018; Accepted January 10, 2019.


Joshua M Liao, MD, MSc, FACP

1959 NE Pacific St. BB1240, Box 35652

Seattle, WA 98109

Phone: (206) 616-6934

Fax: (206) 616-1895


Abstract: Clinical pathways can be meaningful tools for improving the quality and value of care. Pathway initiatives are also influenced by payment policy, taking different forms and adopting different emphases depending on the type of payment incentive. Therefore, even with an existing framework and core criteria for conceptualizing features of pathways, there is room to extract insights from these criteria to create pathways that account for surrounding payment policy. In particular, pathways represent natural interventions for episode-based bundled payments, which have emerged and continue to scale as a nationwide value-based payment model. However, despite the conceptual alignment between bundle payments and clinical pathways, an opportunity remains for provider organizations to better design the latter in the context of the former. In particular, organizations can get clinical pathways “bundle ready” and increase the ability to succeed in the setting of bundled payments by emphasizing multidisciplinary plans of care across multiple care settings, local application of guidelines or evidence to capitalize on opportunity targets, and specific patient populations without necessarily deploying exhaustive inventories of pathway activities.

Clinical pathways have been implemented in over 23 countries and dozens of disease areas,1 providing meaningful tools for engaging clinicians, decreasing variation and resource utilization, and increasing the quality of care (eg, through reduced medical complications).2 However, despite common adoption and increasing momentum for implementation, provider organizations can differ significantly in how they define, set goals for, and implement pathways.

These differences have created the need for a conceptual framework outlining core criteria that characterize clinical pathways. A multistage process has been used to identify 4 features that can define pathways interventions: (1) structured multidisciplinary plans of care; (2) local applications of guidelines or evidence; (3) “inventories” of activities via algorithms or protocols; and (4) standardization efforts targeted to specific patient populations.3 

This framework helps create shared language around the question of “what is a clinical pathway?” However, pathway frameworks must also account for the surrounding payment environment. As care delivery is inevitably influenced by payment forces, pathway initiatives have consequently taken different forms under fixed payment, capitation, and fee-for-service incentives. As a means of delivering care, clinical pathways should not be confounded with the payment models that support them. Nonetheless, certain features of clinical pathways will be more or less critical for success depending on the nature of the prevailing payment incentives. 

This point is particularly salient given the ongoing nationwide transition from volume- to value-based payment and the resulting emergence of novel, nationwide bundled payment models that address cost of care for procedures and conditions encompassing a broad range of clinical areas. Under bundled payments, care is grouped into defined episodes and clinicians are held financially accountable for episode-specific quality and spending. Those who are able to maintain quality while reducing costs below a pre-defined “target price” benchmark are eligible for additional financial gains in the form of shared savings. Clinicians who do not stay below the target may be subject to shared losses. 

Following Medicare’s lead, bundled payments have been consistently scaled up over the last decade. For example, in oncology, Medicare developed the Oncology Care Model for 6-month care episodes focused on chemotherapy administration among cancer patients. In orthopedic surgery, the Comprehensive Care for Joint Replacement program was implemented to improve the value of hip and knee joint replacement surgery across episodes spanning hospitalization and 90 days of post-acute care. 

Importantly, Medicare has also gone beyond specific clinical areas and launched expansive national bundled payment programs that involve numerous clinical areas. In 2013, the agency launched The Bundled Payments for Care Improvement initiative, which implemented episodes encompassing hospitalization and post-discharge care for 48 different conditions and procedures. More recently, the agency launched the Bundled Payments for Care Improvement Advanced program (BPCI-Advanced),4 building off of and extending BPCI into a program that involves 32 episodes spanning 8 different specialties. BPCI-Advanced, which involves predominantly inpatient episodes spanning hospitalization and 90 days of post-acute care, has engaged over 1500 organizations around the country. In the program, episode triggers include both procedures, such as lower extremity joint replacement surgery, as well as hospitalization for medical conditions, such as congestive heart failure exacerbation.

Collectively, these programs have established bundled payments as a cornerstone value-based payment model and positioned them to create a proverbial rising tide that increase the consistency and rigor of clinical pathway definition and approaches.5 In turn, designing pathways for a range of clinical areas that incorporate a bundled payment perspective (ie, that are “bundle ready”) will be an important goal for many provider organizations navigating the move toward value. Conceptually, the episodic design of bundled payments provides a naturally aligned payment model for clinical pathways. Both bundles and pathways focus on specific patient populations and condition- or procedure-specific care. Both also emphasize determining which patients should be included (ie, which patients “trigger an episode” or “go on pathway”). 

However, despite these potential synergies, pathways may not necessarily be designed in ways that help clinicians and organizations to succeed in bundled payments. In part, this is because of the aforementioned variation in how pathways have been conceived and implemented. Some pathways may not be “bundle ready” because they fail to span the appropriate care phases (eg, inpatient and post-acute) and/or align clinicians from different specialties and training backgrounds. As medical directors involved in bundled payment policy and pathway development in our institutions, we believe that provider organizations can capitalize on this opportunity by viewing the above-mentioned core pathway criteria3 through the lens of bundled payment performance, using the resulting insights to design clinical pathways. 

Pathway Criteria in the Context of Bundled Payments

Multidisciplinary Plans of Care

First, given the need to coordinate care across multiple involved clinicians, bundled payment-minded pathways will focus heavily on multidisciplinary plans of care across multiple care settings. For example, ensuring that patients in orthopedic joint replacement bundles receive the most appropriate post-discharge care requires coordination between operating surgeons, internists providing post-operative hospital care, and physical therapists and rehabilitation specialists assessing the most appropriate discharge location. Pathways that involve strong multidisciplinary teamwork are best suited to meet these bundled payment needs.  

Similar dynamics exist for pathways aimed at supporting condition-based bundles such as congestive heart failure. Chronic conditions require disease management and coordination between inpatient and outpatient clinical teams, as well as team members who help guide patients through transitions out of the hospital (eg, care coordinators or patient navigators). Upstream and downstream care providers, including those who may be outside of the episode initiator’s organization, may have an impact on key performance metrics and should be considered or included in pathway development, implementation, and evaluation. This approach will become increasingly important over time as bundled payments, which predominantly focus on inpatient care, shift toward the outpatient setting (eg, BPCI-Advanced is the first program to test outpatient episodes alongside inpatient ones).

Local Applications of Guidelines or Evidence

Second, while all clinical pathways should involve local applications of guidelines or evidence, different bundled payment models may have different targets for opportunity that depend on the structure of the model and episode definitions. Within that context, the focus and implementation approach of pathways meant to drive performance in bundled payments should be adapted accordingly. For example, major drivers of success under some inpatient-focused bundles may include reducing post-acute care utilization, whereas drivers under outpatient bundles may include an emphasis on improving clinical consultation and coordination of referrals. Pathways created in support of procedure-based bundles (eg, joint replacement surgery) should specifically consider device costs, since device costs can be highly variable and represent a significant proportion of overall episode spending.6 In turn, reducing device costs can drive episode savings and high performance in such bundles.7  

Inventories of Activities

Third, though the development of comprehensive protocols and algorithms should encompass the appropriate opportunity targets, exhaustive inventories of activities may not be needed in “bundle ready” pathways, given that variation reduction does not appear to be an absolute requisite for bundled payment success. For example, significant physician practice variation can exist even at organizations that are high performers in orthopedic bundled payments.8 However, reductions in implant costs and total episode spending did not absolutely depend on decreasing physician practice variation. Under bundled payment incentives, optimal pathways should strategically use inventories of activities, targeting variation in areas tied directly to bundle performance and recognizing the opportunity for improvement even in the absence of variation reduction.  Aligning pathway process metrics with bundled payment arrangement metrics can also help ensure that inventories are productively employed.  

Specific Patient Populations

Fourth, to design pathways that target specific patient populations, organizations should identify pathway features that accommodate but are not strictly adherent to bundled payment policy nuances. For example, from a bundled payments perspective, patients admitted with initial symptoms consistent with pneumonia may ultimately fall under other bundles (eg, sepsis) based on the nature and intensity of services provided. Unfortunately, it may be difficult in a number of situations to prospectively identify at the point of care which patients will qualify for a particular bundle. Therefore, independent of this technical designation, organizations should design clinical pathways that maintain emphasis on appropriate care by delivering standardized services to all patients with similar initial symptoms. Patients should receive the benefits of pathways regardless of whether they ultimately “fall in” or out of specific bundled payment episodes, thereby preserving provider organizations’ missions to serve their patient populations.  


As incentives from emerging and clinically expansive bundled payment initiatives spread nationwide, organizations and clinicians face the need and opportunity to design more “bundle ready” clinical pathways. Using an existing conceptual framework for defining and operationalizing pathways, providers can emphasize several pathway criteria over others and implement pathways that increase their ability to succeed in bundled payments. 


1. Vanhaecht K, Bollmann M, Bower K, et al. Prevalence and use of clinical pathways in 23 countries - an international survey by the European Pathway Association. Int J Care Pathways. 2006;10(1):28-34. 

2. Zhang AH, Liu XH. Clinical pathways: effects on professional practice, patient outcomes, length of stay and hospital costs. Int J Evidence-Based Healthc. 2011;9(2):191-192. 

3. Lawal AK, Rotter T, Kinsman L, et al. What is a clinical pathway? Refinement of an operational definition to identify clinical pathway studies for a Cochrane systematic review. BMC Med. 2016;14:35. 

4. The Centers for Medicare and Medicaid Services. BPCI Advanced. Updated January 23, 2019. Accessed January 28, 2019.   

5. Liao JM. Bundled payments: a rising tide for clinical pathways. J Clin Pathways. 2018;4(10):58-60. doi:10.25270/jcp.2018.12.00051

6 Liao JM Holdofski A, Whittington GL, et al. Baptist Health System: Succeeding in bundled payments through behavioral principles. Healthc (Amst). 2017;5(3):136-140.

7. Navathe AS, Troxel AB, Liao JM, et al. Cost of joint replacement using bundled payment models. JAMA Intern Med. 2017;177(2):214. 

8. Liao JM, Emanuel EJ, Whittington GL, et al. Physician practice variation under orthopedic bundled payment. Am J Manag Care. 2018;24(6):287-293.

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