The Fundamentals: How the Model Works

    • February 27, 2011

The PROMETHEUS model uses medical records, claims data and other data to measure the quality of care delivered to patients. Measures are based on commonly accepted clinical guidelines or expert opinions that define the best methods for treating a given condition from beginning to end. The prices of all treatments are tallied to generate an Evidence-Informed Case RateTM (ECR) creating a budget for the entire care episode within a defined time period.

What an Evidence-Informed Case Rate Includes An ECR includes all covered services, bundled across all providers that would typically treat a patient for the given condition (hospital, physicians, laboratory, pharmacy, rehabilitation facility, etc.). Each ECR is adjusted to accommodate the severity and complexity of the patient’s condition.  

PROMETHEUS currently has ECRs for 21 conditions.


The Importance of Potentially Avoidable Complications To determine relevant costs of a specific episode, the model separates out two types of risk. Probability Risks are outside the provider’s control and therefore assumed by the insurer. Technical Risks are within a provider’s control and therefore assumed by the provider. Technical risks include Potentially Avoidable Complications (PACs) and other variations. PACs are deficiencies in care that cause harm to the patient, and might have been prevented with more effective treatment.

Building an ECR: Congestive Heart Failure (CHF)

Charles is a 60-year-old man with CHF. A detailed examination of his personal history shows he also has coronary artery disease and gastro-esophageal reflux disease. Considering the severity of his heart failure and the other medicines he is taking, the PROMETHEUS Payment model calculates a personalized, severity-adjusted yearly budget of $9,800 for routine CHF care for Charles plus a PAC allowance of $10,300.

If providers help Charles avoid PACs like unnecessary readmissions, that allowance will be distributed back to them in the form of bonus payments.

How These Elements Tie Together Driving down PACs is the key to driving down costs. It is estimated that up to 40 cents of each dollar spent on chronic conditions, and up to 20 cents of each dollar spent on acute hospitalizations and procedures in the United States, are due to PACs. A substantial PAC allowance is calculated within each ECR. If complications occur, this allowance is used to offset costs of corrective treatment. But if providers reduce or eliminate PACs, they can potentially keep the entire allowance as a bonus.

To be more specific: Under PROMETHEUS, providers continue to get paid under their current negotiated fee schedules. Then, if they manage patients well and minimize PACs, they can potentially earn bonus payments as well. All claims are applied against the ECR for each patient, and any difference between the actual costs and the budgeted costs is distributed to providers.

In addition to tying bonus opportunities to PAC reductions, PROMETHEUS includes incentives to reward provider performance on clinical process, outcomes of care and patient experience. Based on these measures, payment is re-distributed and shared by all parties. In this way, providers are compensated for the quality of care they collectively deliver, not the number of tests or procedures they perform.

PROMETHEUS also encourages collaboration and shared accountability because each provider’s compensation is based, in part, on how well other caregivers perform. (Provider performance is measured through the use of scorecards, detailed in Building Support: CEO Leadership and Champions.)

PROMETHEUS PAC Measures Endorsed by NQF In early 2011, the National Quality Forum (NQF) endorsed PAC measures for six chronic conditions (Asthma, CAD, CHF, COPD, Diabetes, Hypertension) and three acute care conditions (AMI, Pneumonia, Stroke) used in the PROMETHEUS model. These go beyond previous outcome measures to help move the U.S. health care sector to a new level of accountability—based on value instead of volume.

Building an ECR: Knee Replacement Karen had a routine knee replacement surgery followed by an uneventful recovery. She suffers from rheumatoid arthritis, obesity and sleep apnea and takes medicines for diabetes. Considering the severity of Karen’s knee, her overall health and the other medicines she is taking, the PROMETHEUS Payment model calculates a personalized, severity-adjusted budget of $24,500 for routine knee-replacement. This includes all the costs of surgery, follow-up physical therapy and rehab and other routine care, plus a PAC allowance of $3,500. If providers help Karen avoid PACs like infections, that allowance will be distributed back to them in the form of bonus payments.

Caution Point

When providers hear about a global payment model like PROMETHEUS, they often assume it is just another version of the capitation models tried in the past. This is not the case. Capitation systems, which provide one flat fee for patient care, often fail to compensate providers fairly. But PROMETHEUS increases payment by adjusting for risk factors like patient demographics and severity of illness. Plus, it provides an allowance for PACs. As a result, it’s fairer to physicians—especially those who deliver the best outcomes.