Exploring Episode-Based Approaches for Medicare Performance Measurement, Accountability and Payment Final Report. 6. Conclusion


Current Medicare performance measurement and payment policies are structured in ways that foster setting-based, provider-centric care delivery, as their design emphasizes measurement of and payment for individual services delivered by individual providers in separate settings of care. These design features foster and reinforce a silo-based approach to care management, which contrasts sharply with an average Medicare beneficiary's care needs and care experiences. As the analyses in this study reveal, Medicare beneficiaries frequently have multiple, complex chronic conditions and typically receive care from multiple providers, who often practice in different settings of care. Beneficiaries' needs might be better service by a more coordinated and integrated approach to care delivery.   

Existing payment and accountability structures pose challenges in being able to close the quality gap and provide cost-efficient care to an ever-growing population of Medicare beneficiaries.  Silo-based approaches to performance measurement, accountability and payments do not provide the stimulus to deliver care in a patient-centered and coordinated fashion.  Recent reform proposals have called for approaches that would better align and strengthen provider incentives (both financial and non-financial) to deliver care in a more proactive and holistic way (Baucus, 2008).  Applying episodes of care as the basis for performance measurement, accountability and payment is one potential reform mechanism that could drive the system towards a more patient-centered care focus, improve quality and lead to improved efficiencies in the use of resources.  Additional research is needed to examine the practical application and implementation options of an episode-based approach to Medicare FFS.

This report summarizes the findings from an exploratory examination of issues related to the construction of episodes of care for different clinical events/conditions and the potential application of episodes within Medicare for payment and performance measurement purposes.  As we summarize the key lessons that emerged from our review of the literature, expert discussions, and data analyses and consider the policy implications, we do so within the framework of a building block approach to constructing and applying episodes of care that was outlined at the start of this report. - The findings contained in this report reflect the design features of the two commercially available grouper software tools that were used to construct episodes in this project.  Other types of episode constructions could yield different results.  Additionally, some of the observed variation in results across states may be an artifact of variations in coding practices in different regions and future work should attempt to understand the extent of variation in coding practices.

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