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So just as a wrap up, we're going to talk about how care is bundled. So let's look at this. So when you look at-- this is just the food example. When you look at paying a la carte what you're saying is, I'm paying for each item I get. So the risk if I eat a lot is with the person paying. So if I'm paying my own bill, I order a lot of food, I end up spending a lot of money. School meal plan on the other hand, if I'm a student at the school, I can eat, and eat, and eat and I'm not going to pay anymore, because the school is going to pay for all the food I eat. Because I paid for a meal plan that was basically unlimited over time.

Now, we're going to look at paying physicians, and I made this one little more of a dichotomy. I took salary out, because salary doesn't really fit. So as you go from fee for service, and paying by the visit as opposed to paying capitated, what you're doing is when you're paying for a visit you're saying, OK, every day is a different-- every time someone is seen is it different charge. So the risk is with the payer if the person has expensive procedures at visits or they have many visits. But now what you're doing is what we call bundle you're saying, OK, all the visit someone has over a month, I'm going to decapitate them and give you a fee. So if the person comes in 50 times a month you're still getting the same amount. If they come in zero times a month you're still getting the same amount. So your bundling somebody over time.

So the last one we're going to look at is methods of paying hospitals and how you bundle here. And what we go for is straight fee for service, where you're paying for every little item, which can become very expensive for the person paying the bill, to where you're paying every day. So at least all of the items for one day are in that little enclosed per diem payment, or DRG, where you're saying all the days you're there. We're just going to say, this is the amount you get for admission X, so for heart attack without complications you get X number of dollars. And then the most bundled would be a global budget at which point the risk is with the provider. So, that would be the end of the intro to week three, and I look forward to seeing you online.

Here is a link to the media file cryan_payment_w03_p04.mp4