Episode grouping can weigh impact of health services on cost and quality

September 1, 2005

As Healthcare organizations continue to seek ways by which to deliver top-quality care in a more cost-effective manner, the concept of episode grouping is increasingly coming into vogue.

AS HEALTHCARE organizations continue to seek ways by which to deliver top-quality care in a more cost-effective manner, the concept of episode grouping is increasingly coming into vogue.

For decades the healthcare industry has based the cost of a disease's treatment simply on dollars spent for pharmaceuticals, procedures, treatments and other services. But this method gives relatively little consideration to whether those dollars are delivering the best care in the most cost-effective way-and it lacks the ability to track and compare a patient's healthcare to norms that are risk-adjusted according to disease severity.

Episode grouping enables healthcare professionals to more precisely analyze patient treatments, evaluate the quality of the care delivered and manage the associated costs. It does this by grouping inpatient, outpatient, professional, lab, x-ray and pharmaceutical claims into clinically meaningful units, or episodes, of analysis that precisely describe a particular patient's complete course of care for a single illness or condition, as well as its severity. In so doing, episode grouping allows for a much more accurate assessment of care quality and cost, and provides an effective means by which to more accurately-and fairly-assess physician performance.

In addition, forward-thinking health plans use episode grouping for:

PERCEIVING VALUE

David Schutt, MD, is associate medical director for healthcare-information/consulting firm Thomson Medstat, which developed and markets an episode-grouping software called Medstat Episode Grouper (MEG). He says that episode grouping is definitely here to stay, but that its wide acceptance will come only when physicians and clinicians see its value and buy into it.

"People who practice medicine are, generally speaking, conservative-they're slow to jump into change," Dr. Schutt says. "I talk to physician groups all the time, and I often find them skeptical. There's a reason for that, of course: new treatments, new techniques, new technology, new drugs-the rate of change is incredible, and it's difficult for busy physicians to keep up with it all, so they have a tendency to stick with what they know. The good news is that by using an episode-grouping methodology-which is clinically valid, while taking into account the patient's disease severity and comorbities-you are better able to engage in meaningful discussions with your physicians around patient care, instead of trying to get their buy-in on the use of less-robust episode groupers to evaluate their performance, which is what commonly takes place today."

Dr. Schutt adds that doctors generally have a hard time relating to any method of grouping because in their daily work they don't see groups-they see individuals. "Doctors see grouping as an assembly line that doesn't take into account everything the patient brings to the care setting," he says.