• Joshua M Liao, Lingmei Zhou, and Amol S Navathe.
• Department of Medicine, University of Washington School of Medicine, Seattle, Washington.
• J Hosp Med. 2021 Apr 1; 16 (4): 204-210.

BackgroundMedicare has implemented strategies to improve value by containing hospital spending for episodes of care. Compared with payment models, publicly reported episode-based spending measures are underrecognized strategies.ObjectiveTo provide the first nationwide description of hospitals' episode-based spending based on publicly reported Clinical Episode-Based Payment (CEBP) measures.Design, Setting, And ParticipantsWe used 2017 Hospital Compare data to assess spending on six CEBPs among 1,778 hospitals. We examined spending variation and its drivers, correlation between CEBPs, and spending by cost performance categories (for individual CEBPs, below vs above average spending; for across-CEBP comparisons, high vs low vs mixed cost). We also compared hospital spending performance on CEBPs with a global Medicare Spending Per Beneficiary measure.Main Outcomes And MeasuresEpisode spending.ResultsEpisode spending varied by CEBP type, with skilled nursing facility (SNF) care accounting for the majority of spending variation for procedural episodes but not for condition episodes. Across CEBPs, greater proportions of episode spending were attributed to SNF care at high-(18.1%) vs mixed-(10.7%) vs low-cost (9.2%) hospitals (P > .001). There was low within-hospital CEBP correlation and low correlation and concordance between hospitals' CEBP and Medicare Spending Per Beneficiary performance.ConclusionsVariation reduction and savings opportunities in SNF care for procedural episodes suggest that they may be better suited for existing payment models than condition episodes are. Spending performance was not hospital specific, which highlights the potential utility of episode spending measures beyond global measures.

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