Chronic Conditions and Acute Episode-Based Spending in Medicare

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As evidenced by the Senate Finance Committee's approval of the CHRONIC Act this year, Medicare's rising chronic disease burden is garnering increased bipartisan attention. The long-term spending outlook for Medicare depends on its ability to promote more efficient and cost-effective methods for treating beneficiaries with chronic conditions. While the program is developing value-based payment initiatives and other policies based on the health care resources patients use during episodes of acute care (such as joint replacements), there are little data available about episode-based spending for chronic conditions in the Medicare population. This project seeks to fill that gap. Melinda Buntin and her team will examine how Medicare episode-related spending has varied over time (2007–2015) among beneficiaries with chronic conditions and among dual-eligible beneficiaries. The study will focus on chronic conditions that the Buntin team previously identified, with Commonwealth Fund support, as contributing the most to overall spending growth in Medicare and the dual-eligible population. The researchers will examine spending per hospital-related episode and episode-related spending per beneficiary for these populations. Episode-based spending measures will include episodes triggered by and following on inpatient admissions and emergency department visits. For both types of episodes, the team will analyze the degree of variation in treatment within chronic conditions and within specific Medicare populations, including dual eligibles. The team will determine how much episode-related spending-and care variation-is attributable to each service category, such as hospital care, postacute care, prescription drugs, and outpatient care. Data sources for the study will include the Medicare Beneficiary Summary File and Part A claims, Minimum Data Set records, and a 20 percent sample of Part B and D claims. The project will inform officials with the Centers for Medicare and Medicaid Services, payment policy experts, and health system leaders about opportunities to use chronic disease episodes for improving value and lowering spending growth in Medicare, including in bundled-payment programs and resource-use measures under the Merit-based Incentive Payment System (MIPS) for physicians.

Grant Details

Grantee Organization:
Vanderbilt University Medical Center
Principal Investigator:
Melinda Buntin, Ph.D., and Laura Keohane, Ph.D.
Award Amount:
$301,803.00
Approval Date:
July 11, 2017

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