Researchers from University of California Los Angeles (UCLA) Provide Details of New Studies and Findings in the Area of Managed Care (Modeling Financial Outcomes and Quantifying Risk In Episode-based Payment Models): Managed Care

2021 OCT 29 (NewsRx) -- By a News Reporter-Staff News Editor at Insurance Daily News -- Fresh data on Managed Care are presented in a new report. According to news reporting originating from Los Angeles, California, by NewsRx correspondents, research stated, “Health systems and provider groups currently lack a systematic mechanism to evaluate the financial implications of value-based alternative payments. We sought to develop a method to prospectively quantify the financial implications, including risk and uncertainty of (1) transitioning from a fee-for-service to an episode-based payment model and (2) modifying episode-specific clinical cost drivers.”

Funders for this research include Veterans Affairs National Clinician Scholars Program, American Urological Association Urology Care Foundation Research Scholars Grant.

Our news editors obtained a quote from the research from the University of California Los Angeles (UCLA), “Finally, we highlight practical applications for the model to help facilitate stakeholder engagement in the transition to value-based payment models. We created a financial simulation from empirical data to demonstrate the feasibility and potential use cases within the context of a hypothetical episode-based payment model for prostate cancer surgery (prostatectomy). We used Monte Carlo simulation methods to predict financial outcomes under various clinical and payment model scenarios for our pilot prostatectomy episode use case. We input patient-level empirical cost, reimbursement, and clinical data for a cohort of 157 patients at our institution into our model to quantify expected financial outcomes (payments, financial margins) and financial risk for stakeholders (payer, hospital, providers) under an episode-based payment model. Compared with the status quo, there is a range of expected financial outcomes for various stakeholders depending on the financial parameters (episode price, shared savings, downside risk, stop-loss) in an episode-based payment model. Modifying clinical cost drivers has a profound impact on these outcomes. Uncertainty is high due to the small number of episodes.”

According to the news editors, the research concluded: “The simulation demonstrates that both financial parameters and clinical cost drivers significantly affect the expected financial outcomes for stakeholders in value-based payment models.”

This research has been peer-reviewed.

For more information on this research see: Modeling Financial Outcomes and Quantifying Risk In Episode-based Payment Models. The American Journal of Managed Care, 2021;27(8). The American Journal of Managed Care can be contacted at: Managed Care & Healthcare Communications Llc, 666 Plainsboro Rd, Ste 300, Plainsboro, NJ 08536, USA.

The news editors report that additional information may be obtained by contacting David C. Johnson, University of California Los Angeles (UCLA) Ucla, Natl Clinician Scholars Program, Vet Affairs, Los Angeles, CA, United States. Additional authors for this research include Artem Pashchinskiy, Mark S. Litwin, Christopher S. Saigal, Fernanda Bravo, Eric Kwok and Christine Ahn.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.37765/ajmc.2021.88729. This DOI is a link to an online electronic document that is either free or for purchase, and can be your direct source for a journal article and its citation.

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