Episodes of Care: You have got to be kidding

27 May Episodes of Care: You have got to be kidding

Episode (ĕpĭ-sōd) n.

1. A portion of a narrative that relates an event or a series of connected events and forms a coherent story in itself.
2. One of a series of related events in the course of a continuous account; An incident that is part of a progression or a larger sequence.

As I have referenced many times on this blog (here, here, and here), I am a big fan of the concept of Episodes of Care (EOC). I believe EOC’s are the best comparative and most functional unit by which health care value (outcomes/price) can be appropriately measured. An EOC can be defined as the set of services required to manage a specific medical condition over a defined period of time.

In the case of a right hip procedure, an EOC would include the pre-surgical evaluation, the actual surgery, the anesthesiologist, the operating room, actual hip device, post op recovery, medication and supplies, rehabilitation, and followup visits to orthopedic surgeon and primary care all bundled together for a single price. In the case of more chronic care, it would include all the care required to manage a typical diabetics care for a year. This would include the various visits, consults with nutritionists, podiatrists, ophthalmologists, primary care and related specialists.

The concepts of EOC have been around for a while, and the idea of reimbursing for care in this way is picking up momentum. This is an important ideologic transition, moving from providing fee for service pay for procedure mentality to a more comprehensive, wholistic approach to deliverying care. It also speaks to a fundamental problem of creating a retail health market and organizing health care into a service-based “product” that consumers can compare, shop, and purchase.

We are beginning to see the first “demonstration” projects that focus on the retail productizations (based on EOC) in Carol.com and payment mechanisms like Prometheus. These early innovations in creating health care products in a retail environment remain too complex for mass adoption at this stage, but are still very encouraging.

The barriers to “productizing” health care services into EOC’s remain formidable. Case in point: my 5 year old nephew needs to have a tonsillectomy. This is a simple, straightforward, and relatively common procedure performed millions of times each year. In attempting to provide his parents with some guidance of cost, quality, and outcomes questions, we rapidly determined that it is next to impossible to find this information anywhere, let alone in a consumable form that could be used to make a rational health care decision (ie, which surgeon, what facility, what are expected costs, what is expected outcome?).

So, we determined to turn the experience into case study. I am going to help create a EOC for a <17 Tonsillectomy. Here is what I did with comments italicized:

  1. Diagnosis. The recurrent ear infections, repeat strep throat, persistent snoring, and behavioral problems led to a self diagnosis by a medically savvy father. Given the certainty of diagnosis, the primary care provider was bypassed (allowed by insurance plan) to go directly to the ENT specialist. ENT confirmed the diagnosis, explained rational for bypassing confimatory sleep studies (supported by JAMA article brought in by father), and discussed surgical options. Surgery was schedule for 10 days out. This particular diagnosis seemed consistent with symptoms, with literature, and with physician advise and no second opinion was sought. Additional research on the internet confirmed above.
  2. Procedure. Next was to evaluate the procedure, including asking the physician appropriate questions about the procedure, the alternative techniques, and expectations of outcome. The surgeon did an excellent job explaining the procedure and the technique, and provided some good in office diagrams and descriptions. Provider explanation of procedure was adequate and confirmed by quick online review of tonsillectomy.
  3. Providers. The next process was to evaluate which providers are required to perform this procedure. This information was gleaned from the above conversation about the procedure. Learned that the surgeon, an anethesiologist, a pathologist, and the OR team is required for this outpatient, same-day procedure. Also learned that there are typically two additional followups with the ENT and an optional followup with the primary care provider as part of a reasonable post op course. Extracting this information was difficult, and required an extensive knowledge of the health care system. Providers and staff were somewhat unsettled by this line of questioning but were open to providing it when I explained that I was a cash paying patient trying to determine what the full cost of this EOC was going to be. Insurance carrier was completely not helpful in assembling the EOC, but offered to review line item detail after the fact. This obviously misses the whole point of assembling an EOC for comparative pre-event planning.
  4. Facility. Same day surgical centers are typically more efficient business operations than hospitals (hence the dramatically lower pricing). I was able to obtain the acility related charges directly from the surgery center.
  5. Other components. This includes medication, supplies, and other miscellaneous items that should be included in the EOC. This was also difficult to obtain, despite every component provider providing this service dozens of times each week, no one had a collective view of what is involved.
  6. Pricing. Pricing information was exceptionally difficult to obtain. After 28 minutes on hold with the carrier, I was informed that they can only tell me the physician pricing – and to get that I would need a CPT code, a physician ID number, and a zip code where the procedure was being performed. I then had to chase down each individual provider (anesthesia, pathology, and surgery center) to get pricing information. Obtaining this information was exceptionally difficult – I had to repeatedly explain why I was trying to get the information, go back and get ICD-9 codes, review the insurance discount versus cash price, and be transferred back and forth between multiple administrative and billing personnel at each provider. This process will need to be repeated two additional times with two sets of different providers / facilities to have a basis of comparison.
  7. Performance. Because EOC’s are a measure of health care “value” we cannot just stop at price. We need to understand the performance characteristics of the EOC along the dimensions of proficiency (how many times has surgeon done this procedure?), ratings (what have been the patient satisfaction scores for this physician?), and outcomes (what are the quality or other relevant metrics to assess outcome of the procedure?). This was by far the most difficult component to compile. Proficiency information is somewhat available through Healthgrades, ratings information remains scant, and outcomes are essentially non-existent. These are systemic problems of measuring health care value that preclude more meaningful analysis and assessment of EOC in the short term. This is a perfect, standards-based metric development activity for one of the large government sponsored bodies to undertake (NQF, AHRQ, IOM, etc).
  8. Comparative Analysis. Finally, after approximately 12 hours on the phone (and the web while on hold) gathering relevant information for a simple tonsillectomy procedure, we were able to assemble a very crude EOC. We will need to repeat the process for two additional sets of providers/facilities for comparison. It was interesting to note the wide variability in pricing, the lack of performance information, and the difficulty in assembling this information which is so readily available for nearly every other consumer industry.

This case study was helpful to solidify my belief in the EOC as the appropriate unit to measure health care value. It was also instructive to more fully understand the challenges of trying to assemble an EOC, and the opportunity that exists for infomediary organizations to provide this information to consumers. Unlocking the silo’d information from the various providers, as part of a comprehensive EOC framework, could unlock significant value for patients, providers, and payors.

It just wont be that easy. No kidding.

  • Ian Furst
    Posted at 22:34h, 28 May Reply

    Interesting post Scott. It’s the first I’ve read about EOC’s (by that name). There is a common metric in the literature of cost per life year. In an EOC however, the patient will pass through many institutions (large and small) were soft costs are hidden (admin, infrastructue, depreciation, etc…). If you want to do the cost analysis you need to know not only employee hourly rates but depreciation, lease, bad debt and other expenses that go into total cost. Rather than trying to sort out the mess, why not do the analysis on an hourly basis. I (and I assume most institutions) know the cost of care on a daily basis given a certain level of patients. That level changes slowly over the years even though patient mix can evolve more rapidly. It would be a lot easier to microcap it too — 1/2 consult, 1/2 surgery, 2 hours pacu, 1 night floor, 15min post op x 2. Another main barrier to EOC’s I assume is concurrent care where nurses, anesthetists, etc.. may have multiple patients.

  • Endoguy
    Posted at 00:08h, 29 May Reply

    This was a facinating read. I hadn’t really considered the whole EOC concept in this type of detail.

    My first thought in your narrative was – My God, what a totally tedious process, who would have time for this kind of research.

    My second thought was – been there before in dealing with insurance companies in getting a straight answer.

    There seems to not be the resources or tools out there to deconstruct the whole process in discreet components.

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  • Vince Kuraitis
    Posted at 18:45h, 29 May Reply


    I understand the intellectual appeal of the concept of episodes of care…and I applaud companies that are experimenting here.

    Based on my 25 years experience in health care, I just don’t think it can work. Intellectually, logically appealing — YES; practical — NO. Obviously this a gut level judgement.

    Porter and Teisberg have been big promoters of the concept, and I just don’t see them as having their feet on the ground — http://e-caremanagement.com/porterteisberg-jama-article-out-of-the-box-or-out-of-touch/ .

    Your case study of a tonsillectomy is very interesting. Given the difficulties you encountered with what would seem to be a very straightforward EOC, how would you ever make the concept work with older patients with multiple chronic conditions?

    I’ll try to keep an open mind, but I’m not yet convinced.

  • scottshreeve
    Posted at 15:28h, 30 May Reply


    Great comments as always. I am sorry you don’t believe . . . its what happens when you have been battling something for all the years you have. I remain fresh-eyed and non-jaded, but with a health respect for how difficult change is within health care.

    Therefore, I believe the only way for this to work is to begin locally, to begin small, and to begin to do EOC by EOC. It is the type of disruptive innovation that won’t even be noticed because it is so difficult and so slow but ultimately some one or some group will figure out how to make it easier, simpler, and the collaboration/communication platform will increase such that it is not only possible but preferred way to contract for services.

    I realize it looks like a pipe dream now, and I have been accused of smoking the good stuff before (open source in health care IT – you are crazy!), so I will take your comments as constructive and a good reality check.

    I will keep plugging away, under the radar, and see where this road leads. Looking forward to catching up with you soon.

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