Furthermore, understanding costs for a medical condition is essential in constructing the second main element of value based healthcare - bundle payments - which are single fixed payments designed to pay all providers in a course of treatment, whereas under a fee-for-service providers are paid separately (Porter, 2010). Under bundled payment, the combined lump sum means that the incentive for all providers is aligned and due to the characteristics of this kind of payment, the providers involved will aim to work together to improve quality and efficiency. Providers will thus receive a share in the saving which is accumulated from the fixed bundle minus the actual costs. Bundled payments also benefit the patient as they will receive a better
