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


The use of episodes of care for quality measurement and accountability is mostly non-existent in practice, although it has been proposed and discussed in the literature as a strategy for reforming Medicare.  There are a few cases where providers are being held accountable for what percentage of their patients with a particular condition received all recommended services under what is referred to as an “appropriate care” composite measure, such as for patients with diabetes (Health Partners, 2007) or for patients undergoing coronary artery bypass graft (CABG) surgery.  However, these “bundled” measurement efforts generally are limited in scope to physicians providing care in a single care setting and do not cut across the trajectory of care to involve multiple care settings.

Aligning or coordinating condition-specific measurement efforts across different provider types and settings as a mechanism to enhance the care delivered during an episode of care has not been addressed in the literature or in practice. Hospitals have recognized, however, the importance of aligning hospital and physician measures to improve care delivered in a narrow inpatient episode (Damberg et al. 2007), which could occur even within the existing silo-based performance measurement framework that Medicare has in place through alignment and coordination of measurement across programmatic efforts.

The IOM has recommended the use of episode-based performance measurement in two recent reports (Institute of Medicine Committee on Redesigning Health Insurance Performance Measures, 2006; Institute of Medicine Committee on Redesigning Health Insurance Performance Measures, 2007), suggesting that currently available point-in-time quality measures could be aggregated to the episode level and then applied.  The IOM also identified a number of measurement gaps associated with measuring care over the course of an episode, including care coordination and transitions across care settings, patient outcomes over time, and measures of the oversupply of services, and recommended using such measures in the future (Institute of Medicine Committee on Redesigning Health Insurance Performance Measures, 2006).  Research suggests that improvements in care around patients transitioning from the hospital to the community could substantially reduce readmission rates (Coleman et al., 2006; Naylor and McCauley, 1999). Some progress has been made in recent years to develop measures to assess care coordination and transitions in care ( Institute of Medicine Committee on Redesigning Health Insurance Performance Measures, 2006). For example, as part of the 9th Scope of Work, Quality Improvement Organizations (QIOs) in 14 states will work to improve care coordination and transitions between settings for Medicare beneficiaries.   

Some of the experts with whom we held discussions raised concerns about adequacy of currently available quality measures for episode-based approaches.  However, others held the view that quality measurement could be improved for use in episode-based approaches, and felt that existing measures were adequate for initial steps towards episode-based approaches, citing the efforts of the NQF and others in developing measures to address current gaps.  Experts also described a need for new data collection systems, such as clinical registries and electronic health records that would facilitate broader measurement efforts.

In contrast, measurement of resource utilization has been conducted using episodes of care as the unit of analysis and reporting (McGlynn et al., 2008).  The past five years has seen increased use by commercial payers of software tools that measure resource use within an episode of care construct—mostly for profiling, but in some cases for establishing tiered insurance products.  Testing work is being done to determine if such measures can be incorporated into pay-for-performance program.  In the resource use measurement application, the episode is typically limited to care delivered in ambulatory care and inpatient settings (post-acute care typically is not considered as it is less common in the commercially-insured-aged population).  CMS has also begun to explore the potential use of commercial episode grouper tools to profile physician resource use within the Medicare program.  CMS has funded an array of projects which have considered or are examining how Medicare data is handled by commercial groupers, the underlying clinical logic of the groupers, and the construction and testing of resource use reports with physicians.  The National Quality Forum (NQF) is currently examining the joint measurement of quality and cost using episodes of care as the basis of assessment (National Quality Forum, 2007).

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