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Better benchmark data accelerates move to payment for episodes of care

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Robin Gelburd asks and answers in FierceHealth Payer why it has taken payment for episodes of care (aka bundled payments) so long to catch on and why it is  catching on  now. Among her remarks:

 “One reason has been a lack of sufficiently robust benchmark data and sophisticated analytics to determine how much a typical episode of a given procedure or condition currently costs, and how much it could cost if it were optimized by eliminating duplicative services or preventing potentially avoidable complications. {But} such tools are now becoming available….”

“To provide a clear view of what the market is currently paying for episodes, benchmark data about per-episode healthcare costs require several characteristics. They must:

  • “Include both billed charges and allowed amounts
  • “Be available on a national scale or specific to a geographic area
  • “Be adjusted for risk factors and co-morbidities”

“Benchmark data with those characteristics are now reaching the market. Such data make it possible for payers contemplating a move toward value-based reimbursement and conducting related pricing studies to evaluate episodes. And such data also can inform negotiations between plans and providers, thereby helping to build and maintain networks.”

“W}hen the data includes both the total episode pricing and separate line items for the individual procedures that make up the episode, such information can allow providers to compare their own performance and pricing at the procedure level to that of the market in their region. Thus, episodes can benefit providers, helping them to improve budgeting and achieve efficiencies, as well as better negotiate with payers.”

“Seeing how individual professionals and facilities fit into the episode as a whole may stimulate the formation of partnerships and better coordination of care. Benchmark data can also help consultants advise payers and healthcare systems.”

“In addition to episode benchmark data, episode analytics are available that can enable payers to analyze their own episodes. Organizations can examine their episodes to see, for example, when and why actual episode costs exceeded expected costs, and which specific providers were associated with higher or lower levels of potentially avoidable complications. That information can aid in building networks, educating providers, improving the quality and efficiency of care and budgeting.”

“By using benchmark data together with episode analytics, organizations can compare their own episode results to those of the larger marketplace and identify areas of both improvement and opportunity.”

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