Policy makers have proposed bundling payments for all heart failure (HF) care within 30 days of an HF hospitalization in an effort to reduce costs. Disease management (DM) programs can reduce costly HF readmissions but have not been economically attractive for caregivers under existing fee-for-service payment. Whether a bundled payment approach can address the negative financial impact of DM programs is unknown.

Our study determined the cost-neutral point for the typical DM program and examined whether published HF DM programs can be cost saving under bundled payment programs. We used a decision analytic model using data from retrospective cohort studies, meta-analyses, 5 randomized trials evaluating DM programs, and inpatient claims for all Medicare beneficiaries discharged with an HF diagnosis from 2001 to 2004. We determined the costs of DM programs and inpatient care over 30 and 180 days.

With a baseline readmission rate of 22.9%, the average cost for readmissions over 30 days was $2,272 per patient. Under base-case assumptions, a DM program that reduced readmissions by 21% would need to cost $477 per patient to be cost neutral. Among evaluated published DM programs, 2 of the 5 would increase provider costs (+$15 to $283 per patient), whereas 3 programs would be cost saving (−$241 to $347 per patient). If bundled payments were broadened to include care over 180 days, then program saving estimates would increase, ranging from $419 to $1,706 per patient.

Proposed bundled payments for HF admissions provide hospitals with a potential financial incentive to implement DM programs that efficiently reduce readmissions.