The Healthcare Provider Relay: Why We Need a Patient-focused Episode Payment System

An alien watching a 500 meter relay would think the race is all about the baton. Why else would these beings dedicate themselves to getting this object to its destination as quickly and flawlessly as possible? A relay race would not exist without the baton to bind the individuals together and create a team event. Although each team member’s leg of the race is important, the requirement that the baton be handed from one team member to the next turns four separate runs into a single, unified performance that can be evaluated and rewarded for its overall excellence.

In the relay that is the U.S. healthcare system, the patient is the baton—and the patient baton is not as fortunate as the white plastic one. In the current healthcare set-up, the hospital discharges its responsibility for the patient’s care once it discharges the patient. Then the patient is passed like a baton from one set of provider hands to the next, wobbles and all. Healthcare payment models in use today are centered on individual team members—providers—and not on the patient. Each provider on the relay team is evaluated and rewarded separately.

The role of poorly executed handoffs, such as potentially preventable hospital readmissions, are just beginning to be recognized as an area where costs are high and quality is low because the industry has not yet designed systems around an organizing principle that can appropriately define and motivate the healthcare relay team. With the electronic health record in place across the industry, we now have the technical infrastructure to perfect the handoff. But coordination of care on a large scale is hard work, and up to now there has been no incentive to do that work. So the degree to which providers do not resemble a peak-performing relay team is not surprising. What is amazing, though, is that up to now there has been no incentive.

When an idea is a really good one it sounds like a no-brainer. You read about it and you say to yourself, “Why didn’t anyone think of this before? Why isn’t this already being done?” That was my reaction after I read a paper called “Developing A Prospective Payment System Based on Episodes of Care,” by Rich Averill and four other (fantastic, mad) scientists in our department at 3M—an economist, two doctors, and a statistician, all of them involved in breaking new ground for healthcare payment for decades. In the paper, they describe a new payment system they have developed that uses a “patient-focused episode.”

A patient-focused episode is a unit of measurement for payment and quality that is defined from the point of view of the patient, not the provider. It takes account of five key things about the patient: the “trigger” that brings the patient to the hospital, how severely or acutely ill the patient is at the time of admission, the patient’s “burden of chronic illness” before admission, the scope of services like drugs and physician office visits the patient needs during the pre-and post-hospital portion of the episode, and over these it defines a time period that sets the boundaries (for example, two weeks before admission and 30 days after discharge). In other words, this system re-sets the fundamental unit of measurement in healthcare delivery as a competitive relay, with a defined time period that motivates individual team members to work as a unit toward a single, clearly stated goal—to carry each patient across the episode finish line as efficiently and excellently as possible.

An episode based payment system that is designed around the patient is the next logical step in the evolution of healthcare payment systems. It acknowledges that the healthcare relay is in fact all about the baton. A system that incentivizes healthcare providers to achieve excellence both as individual providers and as a relay team is the industry’s “no-brainer” way to control costs and improve quality.

Read for yourself and see what the future could be, when the industry comes around to focusing on the patient as a way to structure healthcare for optimum quality and efficiency. Not to mention, the patient is more likely to get a better deal.

Rhonda Butler is a Senior Clinical Research Analyst with 3M Health Information Systems.

One response to “The Healthcare Provider Relay: Why We Need a Patient-focused Episode Payment System


    Loved the analogy, very nice blog.


    Jim B. Edwards | Training Specialist 3M Health Information Systems Div 3M Building, 575 W. Murray Boulevard | Murray, Utah 84123 Office: 801 265 4601 | Fax: 801 263 3658 | |

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