Exploring Episode-Based Approaches for Medicare Performance Measurement, Accountability and Payment Final Report. Definition of episodes

02/01/2009

We asked experts for their views on the pros and cons of different episode definitions, with particular reference to three potential types of definitions under a building block approach (single setting, multiple types of providers in a single setting, and then across the continuum of Medicare settings).  Most experts professed a strong preference for episodes that cut across multiple settings.  The main benefit of episode-based approaches to these experts was to create change in the delivery system to reduce fragmentation of care.  To these experts, episodes of care that cover only a single setting (e.g., physician and hospital services for inpatient care) do not do enough towards this goal (one expert went as far as to call single-setting approaches "useless").  On the other hand, several experts suggested a different approach: due to the challenges with conducting performance measurement or payment across settings, they suggested focusing on single-setting approaches first, such as gainsharing for physicians and hospitals for inpatient care.  If these efforts were successful, the experts believed, they could be expanded to include multiple settings.

When asked about particular conditions or other types of episodes that would be good candidates for initial episode-based approaches, many experts pointed towards high-prevalence, high-cost conditions.  The reasons given were that these conditions represented greater potential opportunity for cost-saving and greater volume, which would help balance the variability in content of episodes.  Some experts also expressed a preference for starting with episodes that were more discrete (i.e., well-defined beginning and end points).  

A particular concern that was flagged my many experts was how to approach complex patients with multiple chronic conditions, who represent a high proportion of Medicare costs.  For these patients, experts expressed doubts about whether episodes focusing on each disease separately were appropriate since the patients may be managed more holistically.  One expert raised the possibility that treatments for one chronic condition may contraindicate treatments for another, indicating that a more-holistic approach may be preferable to an episode-based approach.  Alternative approaches that were raised by experts for complex patients with multiple conditions included medical homes or other arrangements where an organization accepted accountability for performance and a care coordination payment, capitation payment, or other payment for management of multiple conditions.

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