Recent Research Finds a New Driver of Cost Variation in Episode Payments

A key driver of variation in payments for heart attack care is the transfer from one acute care hospital to another for angioplasty, according to a new study published by DataGen, a national healthcare data and analytics company.


ALBANY, N.Y., July 31, 2014 (GLOBE NEWSWIRE) -- via PRWEB - The study, The Truth Behind Variation in Episode Payments, explores variation in Medicare episode of care payments for four clinical areas--congestive heart failure, acute myocardial infarction (AMI), pneumonia, and major joint replacements (hips and knees). Using the definition of episodes of care employed by Medicare's Bundled Payments for Care Improvement program, the study examines these clinical areas within the ten most and least expensive regions in the country.

"Our study reaffirms that, in most instances, the hospital inpatient stay is not the driver of cost variation across Medicare episodes of payment," said Gloria Kupferman, DataGen Vice President. "In fact, post-acute care choices and utilization as well as readmissions are primary drivers of variation in three of the four episodes we examined. The biggest surprise is the driver of variation within AMI episodes--patient transfers from one acute care hospital to another for angioplasty."

"These findings present an opportunity for care redesign and Medicare program savings, particularly among hospitals that are licensed to perform percutaneous coronary intervention (PCI) but transfer patients to another facility for the procedure," said Ms. Kupferman.

While further study is necessary to determine why these transfers occur (for example, a hospital does not have a 24/7 interventional cardiology program), the potential for savings is evident and could have significant implications for public health policy related to part-time surgical coverage.

This study also found implications for providers considering participation in bundled (episode) payments, including:

  • Providers need to look at and use data in a new way. They must examine the entire episode of care, not just the inpatient stay.
  • Hospitals should be cautious about engaging in episode payments for diagnoses such as AMI that may require a procedure not performed on a full-time basis within the hospital or for which specialty hospitals are in close proximity.
  • Providers accepting risk through new payment models need to identify the most clinically appropriate and cost-effective settings for post-acute care.

"We are in the midst of major transformation in healthcare," said Ms. Kupferman. "It is essential that providers exploring new methods of payment closely analyze their data and scope of services in light of this and other research."

The Truth Behind Variation in Episode Payments also appears in the June 2014 issue of Becker's Hospital Review Executive Briefing: Bundled Payments.

About DataGen

For more than a decade, DataGen has been an essential partner to healthcare organizations across the country, providing actionable information, insight, and analytics that enable hospitals and healthcare systems to strengthen financial and quality performance while preparing for reform. Drawing on our specialized expertise and as in-depth understanding of the power of analytics to drive change, DataGen transforms complex healthcare policy and payment data into actionable information.

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