Table 1.

Medicare bundling demonstration project: reimbursement for a procedure normally paying $1,000 to surgeon and $6,000 to hospital

	Reimbursement to hospital (DRG)	Actual cost to hospital	Surgeon fee (CPT)	Total payment	Quality of care gainshare* with surgeon 25%	Total payment to surgeon (CPT)	Increased payment to surgeon	Profit to hospital
Current before bundling	$6,000	$5,600	$1,000	$7,000	0	$1,000	0	$400
Implementation of best practices bundling with 10% discount	$5,400	$4,400	$900	$6,300	$250	$1,150	$150	$1,000

* If quality of care improved or stayed static, the hospital would be allowed to “gainshare” the savings with the surgeon up to 25% of the surgeon’s original reimbursement.