A long-planned healthcare payment model is set to move from theory to practice in January 2009 at four pilot sites across the country in the latest of several efforts to improve the way providers are paid across the continuum of care.
Prometheus Paymenta not-for-profit, 3-year-old collaboration to develop evidence-based case rates, or ECRs, that more accurately price treatments while rewarding high-quality, efficient and patient-centered careunveiled its plans last week to launch pilots in Minneapolis; Rockford, Ill.; and two sites yet to be named. Prometheus also got a boost for the pilot program with a $6.4 million grant from the Robert Wood Johnson Foundation. Prometheus is an acronym that stands for provider payment reform for outcomes, margins, evidence, transparency, hassle-reduction, excellence, understandability and sustainability.
Its ready to fire up and we need to keep the fire going, said Alice Gosfield, board chairwoman of Prometheus, a Philadelphia-based healthcare attorney and past board chairwoman of the National Committee for Quality Assurance.
Prometheus members spent many months calculating 12 evidence-based case rates for conditions such as orthopedics, diabetes, several types of cancer, and routine and preventive care. ECRs start with a base fee that pays for a minimum level of service for standard care. Above that, there is a severity adjustment that accounts for potential complications, and an additional margin to give providers a financial incentive to stick to the guidelines. Finally, there is a withhold of a portion of the total payment, to be paid at a later date, based on how a provider performs on a scorecard of quality metrics.
The Robert Wood Johnson Foundation grant will be used in part to refine the ECRs and develop a quality scorecard. The foundation last year awarded another multimillion-dollar grant to an innovative program, Archimedes, a for-profit company owned by Kaiser Permanente. The foundation awarded $15.6 million to Archimedes, which is marketing a healthcare clinical-simulation model; the grant is designed to make it more widely accessible (Nov. 12, 2007, p. 17).
In Rockford, a coalition of local employers will test the Prometheus payment model working directly with local providers. Jim Knutson, risk manager for Aircraft Gear Corp. in Rockford and a Prometheus board member, said that the coalition is hoping to recruit 4,000 to 5,000 employees and their families, or about 8,000 to 10,000 covered lives, to participate in the project.
We have wandered through the forests of failed coverage policies for years, Knutson said. Initially, were hoping it will put a lid on healthcare cost increases. Most employers in the area, like others nationwide, are experiencing 8% to 10% annual healthcare cost hikes, while their businesses are growing just 4% to 5% a year, Knutson said.
SwedishAmerican Hospital, a 269-bed not-for-profit hospital in Rockford, is in preliminary discussions to participate in the pilot, said Tom Myers, the hospitals vice president of marketing and strategic planning. Were excited about the model, Myers said. We think its the way the industry is going.
SwedishAmerican already has a single contract with a coalition of employers in the area. Myers said he did not yet know how the pilot would work with the existing contract.
In Minneapolis, HealthPartners, a not-for-profit managed-care organization with 642,000 members, will be the lead payer on that pilot, with providers and employers yet to be recruited, Gosfield said. The idea is to test the model in different payment settings around the country. Its not designed for just large, integrated systems, as some people believe, she said. Rockford, which is near Chicago, is a far less consolidated, integrated marketplace than Minneapolis, which has a lot of experience with transparency initiatives.
You dont win in Prometheus by having a secret, fabulous price nobody knows about, Gosfield said. This is all about transparency.
Prometheus is similar to the CMS bundled payment model of reimbursing providers and to ProvenCare, a payment model developed at three-hospital Geisinger Health System, an integrated system in Northern Pennsylvania. On May 16, the CMS said it is launching a new demonstration project to test 28 cardiac and orthopedic bundled payments in acute-care settings in Colorado, New Mexico, Oklahoma and Texas.
The difference is that Prometheus is not only a surgical payment model, but also has evidence-based care rates for diabetes and other nonsurgical care. We also dont require any organizational structure for providers, Gosfield said. Prometheus is about transforming what goes on clinically, not financially.