Exploring Episode-Based Approaches for Medicare Performance Measurement, Accountability and Payment Final Report. Payment and performance measurement approaches


We asked the experts about a range of episode-based approaches to creating financial and non-financial incentives for performance and efficiency including public reporting/transparency, routine internal feedback for quality improvement, pay for performance, gainsharing between physicians and hospitals, and bundled payments.  Many of the experts stated that while non-financial incentives such as public reporting and quality improvement may have some benefit, they believed that financial incentives would be much more effective in effecting change.  Some went further to state that smaller financial incentives, such as pay-for-performance payments, would not be sufficient, and that bundled payment would be necessary to achieve significant results, although much more difficult to implement.

Regarding episode-based performance measurement applications, we asked about the adequacy of currently available quality measures - in particular, if the experts perceived problems around alignment of measures between providers and settings, and if they perceived significant gaps. Opinions were somewhat mixed on these issues. Some of the experts raised concerns about the robustness, alignment, and representativeness of currently available measures. They pointed to the numerous gaps in available measures, particularly in the areas of coordination and transitions of care. One expert raised a concern that quality measurement is too difficult to expect that it could be used for some purposes that have been proposed, such as ensuring that there was no skimping on care under bundled payment, where incentives for providing less care exist.

Other experts held the view that quality measurement could be improved for use in episode-based approaches.  They pointed towards efforts by the NQF and others in developing measures addressing current gaps.  They also described a need for new data collection systems.  An example given by one expert is the Society for Thoracic Surgeons database, which includes voluntary submissions by members of clinical data for cardiac surgery patients.  This database has allowed more-robust measurement of processes and outcomes for cardiac surgery than for other conditions, allowing for use in episode-based approaches such as the Geisinger heart bypass surgery program.  The experts stated that something similar will be necessary for application of episode-based quality measurement to non-cardiac procedures.  The adoption of electronic health records was one development that was raised as a possible source of additional clinical data.

Other experts expressed the view that currently available measures are adequate for some uses and that measure availability should not be a barrier to moving forward with episode-based approaches.  One expert raised the example of bundled versus separate payments for hospitals and physicians for inpatient care.  At the time the inpatient prospective payment system was implemented, many believed that separate payments were necessary in order to create different incentives for physicians and hospitals (physicians are paid FFS and have a financial incentive to provide additional services; hospitals are paid per-discharge and have an incentive to provide fewer services during a hospital stay).  However, the expert now believes that quality measurement has now progressed to the point where it can provide a check against financial incentives for both hospitals and physicians to provide less care under bundled payment or gainsharing.

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