Report: 'Episode of care' reimbursement model filled with promise, problems

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Reimbursing physicians and providers using an "episode of care" model has been discussed as a way to potentially curb medical expenses and improve quality of care, but a number of logistical concerns stand in the way of implementing such a system, according to new research from the RAND Corporation.

Under an "episode of care" model, providers and physicians would receive one lump-sum payment for treating a patient's medical condition. Despite having been widely proposed as a potential cost saver, the system itself is still largely conceptual, according to the report.

By making a single payment for all physician or facility services related to treating conditions, such as implanting an artificial hip or managing a patient's diabetes, proponents of an "episode of care" approach hope to eliminate extraneous tests or procedures that the current fee-for-service model apparently encourages. But the model presents some serious problems to solve, according to researchers. Because many conditions are treated by a number of physicians or providers-especially chronic conditions, such as heart disease or diabetes, which affect up to 90% of seniors-it becomes difficult to discern which physician or facility is responsible for managing treatment. As a result, such a model might not be optimal for those types of patients, researchers note.

Other difficult issues to take into consideration include how best to define an episode of care, or whether or not certain types of providers would be put at an unfair financial risk by treating patients under this type of system. The study appears in the September/October edition of the journal Health Affairs.


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