Reimbursement compression, softening demand, and new pay-for-performance programs have required CV programs to be diligent about managing costs, primarily for expensive inpatient services.

However, the emergence of alternative payment models are mandating CV leaders to expand the focus of cost-savings strategies to cover entire episodes of care, which creates new challenges for CV leaders. And with CMS’s announcement of a proposed mandatory bundle for AMI and CABG, CV programs must develop a clear strategy to respond to these challenges.

This research report offers 12 lessons for CV leaders to build an appropriate internal infrastructure and foster meaningful partnerships with physicians, vendors, and post-acute care providers to succeed with episodic cost management.

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The new mandate for episodic cost management

Bundled payments haveemerged as a primary model forhealth care reform given theirsignificant savings potential. Infact, bundled payments arebelieved to offer greater savingsopportunities than accountablecare organizations (ACOs).

Performing well on efficientepisodic cost management canhelp position a CV program as amarket leader and providebenefits that extend beyond anyone individual bundle.

We identifiedthree key partnershipopportunities for CV programs toreduce episodic costs: physicianengagement, supplier risksharing,and post-acute carecoordination. To explore these partnership opportunities in detail, Read more on p. 7.

Unpack the cost of care episodes

To begin, CV leaders must first possess a solid understanding of the sources of episodic costs, as well as the variation intotal costs across multiple episodes. Medical episodes may differ substantially from surgical episodes in the sources ofcost, necessitating tailored and differentiated strategies for cost control depending on the condition or procedure inquestion.

The special report in this study discusses how CV leaders can analyze their episodic costs and assess the sources ofvariation, then use the data to select appropriate conditions for bundled payments. Read more on p. 17 .

12 lessons for episodic cost management

These lessons are designed to help CV programs not only make the transition from fee-for-serviceeconomics to alternativepayment models, but also deliver cost-effective, high-qualitycare across thecontinuum.

Build a longitudinal cost structure

• Set strategic oversight (p. 25)
• Leverage nurse episode managers to own operations (p. 30)

Engage and align physicians

• Build and sustain physician involvement (p. 40)
• Formulate meaningful financial incentives (p. 44)
• Collaborate to reduce care variation (p. 48)

Leverage vendor relationships

• Establish standards for vendor performance (p. 60)
• Create contracts to share and manage risk (p. 62)
• Capitalize on population health management services (p. 66)

Maximize post-acute care collaboration

• Discharge patients to appropriate setting (p. 75)
• Select preferred post-acute care providers (p. 80)
• Share post-acute care pathways (p. 83)
• Provide support for PAC performance improvement (p. 84)

Download the Research Report

Tools and implementation support resources for episodic cost management

• BPCI Overview
• Care Coordination Episode Profiler
• CABG Bundled Payment Dashboard: Maine Heart Center
• PCI Bundled Payment Dashboard: Sparks Health (pseudonym)
• CABG Post-Acute Care Roadmap: Baystate Medical Center
• Vendor Scorecard: University of Chicago Medicine
• Readmissions Reduction Toolkit