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Study outlines strategies to test new payment models for health care
Date:9/29/2009

A new RAND Corporation study outlines methods that might be used to test a novel payment system for medical care that would provide doctors, hospitals and other health providers a set fee for treating an ailment such as hip replacement surgery.

Proposals to pay health providers for so-called "episodes of care" have gained momentum during the ongoing debate about national health care reform as a strategy that could both curb medical spending and improve the quality of care.

While payments based on episodes of care have been widely discussed, the approach is largely conceptual with little real world experience that might help guide the design or adoption of the strategy, according to the study published in the September/October edition of the journal Health Affairs.

Researchers from RAND Health analyzed claims information from a large group of Medicare beneficiaries and identified key issues that should be considered to help determine how to define episodes of care and identify which provider is accountable for an episode.

"While using episodes of care as the basis for payment has enormous potential, we found there are many unanswered questions that must be addressed before moving forward," said Peter Hussey, the study's lead author and a policy researcher at RAND, a nonprofit research organization. "We've identified steps that should be taken to help move from concept to implementation."

Critics of the current payment system for health care say it encourages overuse of services because physicians and others are paid separately for each procedure or test performed.

Under an episode of care approach, some or all of the services related to the management of a patient's chronic or acute medical condition would be grouped together and paid for in a lump sum. For example, public or private insurance programs might make a single payment for all of the physician, facility, and pharmacy services related to car
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Contact: Warren Robak
robak@rand.org
310-451-6913
RAND Corporation
Source:Eurekalert

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