• Amol S Navathe, Lingmei Zhou, and Joshua M Liao.
• Value & Systems Science Lab, University of Washington School of Medicine, Seattle, WA 98195. Email: joshliao@uw.edu.
• Am J Manag Care. 2020 Nov 1; 26 (11): 483-488.

ObjectivesAs part of its strategy to improve health care value and contain hospital costs, Medicare trialed public reporting for episode-based spending via 6 novel Clinical Episode-Based Payment (CEBP) measures for cellulitis, kidney/urinary tract infection, gastrointestinal hemorrhage, spinal fusion, cholecystectomy, and aortic aneurysm. Because safety-net hospitals may fare more poorly than other hospitals under value-based reforms, we evaluated the relationship between safety-net status and CEBP episode spending.Study DesignObservational study.MethodsWe used data from Medicare and the American Hospital Association to identify and describe characteristics of safety-net and non-safety-net hospitals subject to CEBP measures nationwide. Multivariable linear regression, controlled for hospital characteristics, was used to evaluate the association between hospital safety-net status and risk-adjusted, standardized episode spending for each CEBP episode type.ResultsOf 1771 hospitals eligible for CEBPs, 28% (491) were safety-net and 72% (1280) were non-safety-net hospitals, with the former being larger and more likely to be nonprofit, nonteaching hospitals. The magnitude of episode spending varied by episode type, ranging from the lowest for cellulitis episodes to the highest for aortic aneurysm episodes. Skilled nursing facility care accounted for a considerable proportion of spending variation for procedure-based episodes but not condition-based episodes. In multivariable analysis, safety-net status was not associated with risk-adjusted episode spending for any of the 6 episode types (spending differences ranging from -$111 to $638 by episode; P > .05 for all).ConclusionsThese findings provide the first description of baseline episode spending patterns for safety-net hospitals and suggest that such spending does not vary by safety-net status.

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