Variation in Practice -The Influence of Money

A recent study highlights the problem of bundling and shows how financial incentives distort care in some gastroenterology practices (Clin Gastroenterol Hepatol 2014; 12: 58-63).

Background: When needed, patients can undergo both colonoscopy and esophagogastroduodenoscopy (EGD) at the same time; when combined, the procedures are considered bundled.  It is more convenient for patients and less costly to do the two procedures during the same sedation.  However, Medicare reimbursement to physicians for bundled procedures is less than the sum of the two procedures when charged separately. This creates an incentive for physicians to unbundle these procedures.

Study design: The authors examined Medicare claims from 2007-2009 in a national, random sample (patients ≥66 years) –part of the Surveillance Epidemiology and End Results Program.


  • 12,982 had colonoscopy and EGD within 180 days.  ~35% of these were not bundled.  This included 2359 (18%) unbundled procedures which were performed within 30 days of each other.
  • Geographic differences were noted: bundling occurred less often in the Northeast (55%) and most often in the West (68%)

What does this study indicate about bundling (& human nature)?  This study indicates that physicians respond to underlying financial incentives to separate these procedures.  In our pediatric practice, we do not unbundle procedures.  The additional facility costs, use of anesthesia, costs to families from missing work, and convenience are compelling reasons to combine procedures if feasible.  However, this data indicates that unless physicians are paid the same value for each EGD and colonoscopy, there will continue to be many patients who have their procedures scheduled on separate dates.

Bottomline: Medicare and other insurance companies will save money by not paying less for combined procedures.

Another example of financial incentive influencing care with regard to ambulance and EMS care:  How Perverse Incentives Drive Up Health Care Costs / ideastream 

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