For example, RAND researchers found that in more than half of the hip fractures they examined among Medicare beneficiaries, patients were treated in four or more different settings. For some conditions, including diabetes and low back pain, most patients were treated in just one setting.

In addition, many of the patients studied had multiple chronic conditions such as high blood pressure and elevated cholesterol levels. Encouraging a single-condition focus through an episode-based payment plan may not be optimal for these patients, according to the study.

RAND researchers outline several applied studies they say would facilitate more rapid movement of episode-based payment approaches from concept to implementation beyond the approaches used in the current pilot studies.

Among the issues studies must address are: how to define an episode of care; understanding the sources of variation within episodes of care; and whether some types of providers would be put at undue financial risk if their patients were treated under an episode of care scheme.

"Our analysis shows that doing these sorts of studies at the beginning of an evaluation period could help answer some important questions and increase the chance of success during real-world evaluations of episode-based payments." Hussey said. "Our recommendations serve as a starting point for a more-robust testing agenda."

Source: RAND Corporation