Health Care Spending and Utilization: Evidence from Perinatal Care - PowerPoint PPT Presentation

Effects of Episode-Based Payment on Health Care Spending and Utilization: Evidence from Perinatal Care in Arkansas C A I T L I N C A R R O L L P H D C A N D I D A T E H A R V A R D U N I V E R S I T Y J O I N T W O R K W I T H M . C H E R N E W , A . M . F E N D R I C K , J . T H O M P S O N A N D S . R O S E

Background  Bundled payment has been proposed as alternative to fee-for-service reimbursement  Recently gained traction in multiple markets  New payment models use clinical episodes as basis of payment  “Episode - based payment” (EBP)  Set fee for entire episode of care  Incentive to reduce ineffective or duplicative services within episode

Evidence on Episode-Based Payment  Voluntary Medicare EBP is associated with lower spending  Bundled Payments for Care Improvement (BPCI) Initiative 1  Little research has focused on:  Mandatory EBP  EBP in the commercial market  Arkansas Health Care Payment Improvement Initiative (APII)  Collaboration between Arkansas BCBS and Medicaid  Automatic participation for providers  Applied EBP to perinatal care in 2013  Nearly universal coverage of pregnancies by 2014 1. Navathe et al. (2017); Dummit et al. (2016)

Research Question  What was the impact of EBP on the cost and quality of perinatal care in the commercial market in Arkansas?

EBP in Arkansas: FFS with Reconciliation Adapted from Arkansas Payment Improvement Initiative Materials

Perinatal EBP in Arkansas  Principal Accountable Provider (PAP) is provider that delivers baby  Episode includes all pregnancy related care in episode window  Episode exclusions: neonatal care, high risk pregnancies  Risk adjustment based on clinical severity  PAPs eligible for shared savings if quality targets are satisfied

Research Strategy  Data: Truven Health MarketScan Commercial Claims  Empirical Strategy: Difference-in-Differences  Study period: 2010-2014  Post-EBP: 2013, 2014  Control Group: states in same or neighboring census region with statistically similar pre-period trends  Alabama, Kentucky, Louisiana, Oklahoma  Control variables: maternal and plan characteristics

Results: Overall Episode Spending

Decomposing EBP’s Spending Effects

Results: Price v. Quantity of Inpatient Facility Care Quantity Measures

Interpretation of Facility Price Decrease  Consistent with two broad explanations:  Shift in referrals to low-price hospitals  Lower negotiated rates for perinatal care  Lower negotiated rates would decrease prices for all conditions  No evidence of price changes outside of perinatal care  Price changes are concentrated in urban areas with multiple hospitals  Consistent with a shift in referral patterns

Conclusions and Implications  EBP led to an overall reduction in episode spending, relative to surrounding states  At 3.8% savings, our results are consistent with other large payment reforms  Spending reductions were driven by inpatient facility prices. We found no significant reduction in cesarean section rate.  Future work can explore other clinical areas and study provider-level changes

Acknowledgements  Funding  Laura and John Arnold Foundation  NSF Graduate Research Fellowship  AHRQ Predoctoral Fellowship

Thank you Email: caitlincarroll@fas.harvard.edu