Grant: Operating Grant: Advancing Theoretical Method. Innovations Hlth Res- HSPR

Over the past three decades, episode-based funding has revolutionized funding for hospitals by successfully focusing hospitals attention on the production process. Several Canadian provinces are now experimenting with episode-based funding by paying hospitals for volume of care. However, episode-based of acute care does little to create incentives outside of the acute care hospital, or coordinate health care across providers and settings. Consequently, with many health care quality and efficiency problems stemming from failures at the seams between providers, there is increasing interest in creating new bundles of care which includes acute and post-acute care services that align economic incentives for care coordination. This study's objectives are to demonstrate that existing sources of clinical, administrative and cost data can be linked to create bundles. This policy initiative is being proposed as a method to restrain cost growth and enhance incentives for coordinating care in the U.S.; to be feasible in Canada, technical and implementation challenges will need to be addressed, such as processes for administrating contractual arrangements across provider organizations, creating appropriate incentives through pricing mechanisms and relations with physicians. This study aims to demonstrate that bundles provide an alternative policy option to provinces to episode-based funding of care, an option which strengthens incentives to coordinate care between settings.