Guest post: Prometheus and Bundled Payments

As an extension of one of my posts, Global payment system, as the current buzz in healthcare reform, Michael Halasy points us to one of his choices for a plan.

Guest post by Michael Halasy, Practicing Emergency Medicine PA, Health Policy Analyst, and Health Services Researcher

Prometheus and Bundled Payments

So, one of the more intriguing propositions in the midst of health reform is to reform payments. Make no mistake this has been tried before, and many physicians and hospital administrators remember the days of capitation and DRG’s with Medicare.

I attend a lot of health policy meetings and symposia, and the common theme on the priorities coming out of these meetings centers around bundled payments, and payment reform. The thought of course being, that as you change the payment system, other changes will be more palatable, and easier to enact. We’ve had some discussion of the ACO concept here, and make no mistake, bundled payments tied to outcome measurements will be one of the chief indicators of the ACO model success, and/or, it’s demise.

The problem is, that the current fee for service model is broken. Almost everyone knows this. It encourages fragmentation, volume over value, and quantity over quality. This is not sustainable, and is one of the main drivers in some respects of healthcare cost increases.

Prometheus happens to be one of the most studied, and well known of the new payment models (and yes, also a Titan who was condemned to watch his liver being eaten every day by an eagle).

Prometheus was first developed under a Robert Wood Johnson grant in 2006 in Rockford, Illinois, but has shown a great deal of promise for expansion. The initial premise behind it was to hold physicians and hospitals accountable for the care that they provide, but only for those outcomes that were within their control. They termed these PAC’s, or Potentially Avoidable Complications.

There has been some work that shows that these PAC’s may account for about 22% of all private sector expenditures. Reducing not only the occurrence of these incidents through incentives, but also through payment mechanisms has the potential to save a lot of money.

This data on Prometheus was retrieved from this article