Characterizing managing physicians by claims sequences in episodes of care

Value-based healthcare in the US is a payment structure that ties reimbursement to quality rather than volume alone. One model of value-based care is the Tennessee Division of TennCare's Episodes of Care program, which groups common health conditions into episodes using specified time windows, medical code sets and quality metrics as defined in each episode's Detailed Business Requirements [1,2]. Tennessee's program assigns responsibility for an episode to a managing physician, presenting a unique opportunity to study physician variability in cost and quality within these structured episodes. This paper proposes a pipeline for analysis demonstrated using a cohort of 599 Outpatient and Non-Acute Inpatient Cholecystectomy episodes managed by BlueCross BlueShield of Tennessee in 2016. We sorted episode claims by date of service, then calculated the pairwise Levenshtein distance between all episodes. Next, we adjusted the resulting matrix by cost dissimilarity and performed agglomerative clustering. We then examined the lowest and highest average episode cost clusters for patterns in cost and quality. Our results indicate that the facility type where the surgery takes place is important: outpatient ambulatory care center for the lowest cost cluster, and hospital operating room for the highest cost cluster. Average patient risk scores were higher in the highest cost cluster than the lowest cost cluster. Readmission rate (a quality metric tied to managing physician performance) was low for the whole cohort. Lastly, we explain how our analytical pipeline can be generalized and extended to domains beyond Episodes of Care.