New Ways to Evaluate the Value of Care Coming Soon

By Bob Kershner, CIVHC Director of Health System Payment Strategies

In the near future, CIVHC will be able to measure the cost and the quality of care by facility based on everything associated with a particular service or procedure, also known as an “episode.” Based on claims data from the Colorado All Payer Claims Database (APCD), reports on these episodes will give payers, providers and facilities new ways to evaluate the value of the care they are providing. This type of analysis is critical to moving away from our current pay for volume model to a more patient-centric and value- based payment model where outcomes and lower costs reign supreme.

How Does it Work?

Starting with Colorado All Payer Claims Database (APCD) data, claims data are run through an analytic tool called Prometheus that divides claims for a selected procedure or condition into two buckets: “typical costs” and “potentially avoidable complication costs (PACS).” For a given procedure (such as a colonoscopy or open-heart surgery), the tool identifies “trigger codes” (usually a CPT or diagnosis code) that indicate the start of the procedure or episode. All claims associated with the treatment of the specific condition get included in the episode and all non-associated procedures or services are removed.

Additionally, we try to get an “apples to apples” comparison by eliminating episodes for patients who have other significant medical conditions. For example, a person with lung cancer who is being treated for a heart attack would be excluded from the analysis of heart attack episodes. By eliminating these medically complex patients from the pool of patients being evaluated, Prometheus achieves a type of risk adjustment which allows a more reliable and accurate comparison of one facility to another.

How Can These Reports Be Used?

Analysis of these episodes can reveal numerous opportunities for improvement. Reports can be analyzed in a number of ways:

  • Average typical cost for patient treatment at a specific facility
  • Typical costs ranked by their dollar amount and frequency
  • Average complication costs
  • Complication costs by type and ranked by average cost and frequency
  • Comparison of typical and complicated costs and rates at one facility compared to others

These reports allow providers, payers and others to compare facility performance in a new and transparent manner and allow for a level of informed treatment decisions that was previously unavailable. By isolating the type and frequency of complications at each facility, benchmarking performance for specific conditions across multiple facilities is possible. This presents a multitude of potential uses to improve patient care.

These reports are a starting point for assessing facility performance. They are first and foremost an educational tool and an opportunity to bring payers and providers together to identify ways to improve care to patients. With statewide PAC rates as the benchmark, providers with higher than expected complication rates can be presented with reports outlining the type and frequency of complications. Using this information, providers can verify the information with their own internal data, identify potential causes, and redesign care if indicated.

How Can Episode Analytics Benefit Care Transitions?

While episode analytics are not designed specifically to assess care transition performance, they can potentially be used to identify opportunities to improve the care transition process. All of the episodes have a duration which includes the acute care phase and a post-acute care phase of up to 180 days (depending on the episode type). Looking at the type and frequency of complications, a facility may be able to identify whether problems stemming from transitions of care problems are contributing to a high complication rate. A hospital may realize that improved coordination with home-based or outpatient care could reduce the frequency and costs associated with a particular complication. Since these reports are not limited to just hospitals, SNF’s, long term care and others will be able to use these analyses to improve their performance. It is difficult to say at this point how exactly this will play out, but it is certain providers and payers will have a way of measuring their performance that has never been used before in Colorado.

As new episode analytic reports start to take shape, CIVHC will engage providers and payers to inform them of the results, highlight opportunities and gauge their interest in using the episode analytics to improve patient care and lower costs. CIVHC can isolate reports to Medicare, Medicaid and Commercial data sets, and in the process, we will learn a great deal about how care is being delivered.

Whatever the eventual use, the process must include thoughtful and patient evaluation of the data. At this early stage, CIVHC sees these reports as primarily an educational opportunity. They are a starting point, not a final solution. These analytic tools represent an initial foray into measuring cost and quality of care using episode analytics in combination with Colorado’s APCD. How the reports are used is still very uncertain, but the ultimate goal is to use this information to improve patient care across Colorado.