In the quest to manage the spiraling cost of US health care, one approach has generated great interest. The philosophy behind much current policy—including the Affordable Care Act (ACA)—is that aggregating fee-for-service reimbursement into payments for broader bundles of care will lead to greater efficiency in the provision of care and thus lower costs.

Under the accountable care organization model, perhaps the best-known example of this strategy, medical reimbursements are aggregated to the person-year level. Other programs aggregate reimbursement for episodes of care—for example, care for a particular cardiovascular or orthopedic condition. The Episode of Care Payment Demonstration project, which is authorized by the ACA, requires the Centers for Medicare and Medicaid Services to experiment with bundling Medicare Part A and Part B payments for inpatient care. It resembles the Acute Care Episode payment program, an ongoing demonstration program that bundles Part A and Part B payments for select types of inpatient care episodes.