The Robert Wood Johnson Foundation (RWJF) will provide $6.4 million in grants to further develop and test a new model for health care payment that will reward hospitals and physicians to coordinate and provide high-quality care. The provider payment system, developed by the nonprofit PROMETHEUS Payment®, Inc., creates common clinical incentives for all parties, and bases payment on a case rate that encompasses what science indicates are the resources all providers should consider in treating a patient's condition.
The PROMETHEUS Payment model has been developed over more than three years by a group of experts from a variety of disciplines, including physicians, insurers, health services experts and purchasers. Recognizing that changes in health care payment can only succeed if disparate parties work together, the PROMETHEUS Payment Design Team developed the system to explicitly base payment on adherence to clinical guidelines and patient outcomes, which by necessity will require tight coordination among an entire care team.
“One of the biggest problems of our broken health care system is that health care providers get paid regardless of whether it is the right care at the right time,” said John R. Lumpkin, M.D., M.P.H., senior vice president and director of the health care group at the Robert Wood Johnson Foundation. “We need fresh thinking and new payment systems that encourage and reward hospitals and physicians for providing high-quality care. We believe the PROMETHEUS Payment model holds considerable promise, and we're pleased to support this phase where the designers will take the models out for a test drive in real-world communities.”
PROMETHEUS Payment, Inc. has named Rockford, Ill., and Minneapolis, Minn., as initial pilot sites, with two other locations to be named in the near future. The pilot sites should be operational by January 2009.
“Unlike prior payment systems or even current pay-for-performance programs, the PROMETHEUS Payment model starts with science and fairly accounts for the resources necessary to make that care deliverable to specific patients with specific, individual clinical needs,” said Alice G. Gosfield, chairman of the board for PROMETHEUS Payment, Inc. “The system is voluntary, broadly applicable across health care delivery sites and can be used by small physician groups, as well as large integrated delivery systems. Willing plans and eager providers will make the PROMETHEUS Payment approach a success.”
The partnership with RWJF enables PROMETHEUS Payment to:
- Expand its starter set of Evidence-informed Case Rates™ (ECRs), the total amount that will be paid to all providers who collectively treat a particular condition for a particular patient, in accordance with good, well-accepted clinical practice guidelines. These ECRs will give patients and payors a predictable measure of costs and are generous and flexible enough to give providers a clear incentive to improve care.
- Develop a PROMETHEUS Payment quality scorecard—a public report that will contain comprehensive information for consumers, physicians, providers and payors on performance and price, and will substantially increase transparency in health care.
- Implement and test the model in four pilot communities.
- Assess the impact of the model in these communities by external evaluators.
PROMETHEUS Payment Model Approach Now Ready to Ignite
As the cornerstone of the PROMETHEUS Payment model, project leaders have spent months calculating 12 ECRs for certain types of cancer, cardiology and orthopedic care—as well as ECRs for routine and preventive care.
ECRs start with a ‘base'—a minimum level of service for uncomplicated care, consistent with what the evidence suggests is good practice for that care. Then, above the base, there is a ‘severity adjustment'—to account for potential complicating factors—and an explicit additional ‘margin,' to give providers a financial incentive to adhere to the guidelines. Finally, there is a ‘withhold'—a portion of the total payment that is held back, to be paid at a later date, based on how a provider performs on a scorecard of quality metrics.
Teams of providers in the pilot sites will coordinate and negotiate which portions of the case rate they agree to deliver and at what price. In Rockford, a coalition of local employers will test the model working directly with local providers. In Minneapolis, employers, health plans and providers are involved in a full-scale test of the PROMETHEUS Payment approach.
The PROMETHEUS Payment program has contracted with Innovative Resources for Payors (IRP) to help design the ECRs and establish the operational processes with the pilot plans. IRP will use its Claimshop® contract management and pricing engine to develop and operate the ECR Tracker—the project's tracking engine.
“Developing this model and making it operational has been a significant undertaking, but the PROMETHEUS Payment system is now unchained and ready for implementation,” said Francois de Brantes, leader of the PROMETHEUS Payment Design Team. “We've assembled an expert team that is fully capable of putting our concept into practice in the pilot sites, and we look forward to engaging communities across the country in participating in this groundbreaking effort.”
Comments from PROMETHEUS Board Members
“Every business owner who purchases health insurance for his or her employees wants health care costs to be aligned with a high quality of care for their employees. PROMETHEUS will provide insights into how to accomplish this goal while also increasing transparency about health care costs and payment.”
Ford Brewer, M.D., M.P.H., Medical Director
Toyota North America, Lexington, Ky.
“PROMETHEUS has the potential to totally transform the way providers are paid. It will free physicians and hospitals to allocate their resources as they see fit to deliver the best possible result for the patient. It's about providing and being paid for using all the right resources for the right care.”
John E. Brush, Jr., M.D., F.A.C.C.
Cardiology Consultants, Norfolk, Va.
“With PROMETHEUS we have set out to help payers and purchasers reform what the Institute of Medicine has called a toxic payment system. To reform health care payment, we examined why our current payment system fosters poor care and devised a method for mitigating these effects and motivating effective health care delivery.”
Suzanne F. Delbanco, Ph.D., M.P.H.
Former CEO, The Leapfrog Group, Washington, D.C.
“Unlike prior payment systems or even current pay-for-performance programs, the PROMETHEUS Payment model starts with science and fairly accounts for the resources necessary to make that care deliverable to specific patients with specific, individual clinical needs.”
Alice G. Gosfield, Esq.
Alice G. Gosfield and Associates, P.C., Philadelphia, Penn.
“Health care purchasers need more and better information about the quality, cost and value of the health care they make available to their employees. The type of transparency and rigor that PROMETHEUS Payment is working toward can help engage consumers in making more informed health care decisions.”
Jim Knutson, Risk Manager and Human Resources
Aircraft Gear Corporation, Rockford, Ill.
“I've always been struck by how unfair most payment systems could be—that they really don't do a good job of accounting for patient severity. And while clinical guidelines are all well and good, they don't really influence how care is actually delivered. PROMETHEUS aims to bring clarity and fairness to the payment process, while increasing quality and value of care.”
Keith Michl, M.D., Practicing Internist
Southwestern Vermont Medical Center, Manchester Center, Vt.
“I believe the PROMETHEUS Payment approach will drive quality through a reimbursement and reward structure, and that's important, but another advantage is that it will drive community health planning within geographic regions, and that's something that will benefit populations at large, not just individual patients.”
Michael C. Riordan, President and CEO
Greenville Hospital System University Medical Center, Greenville, S.C.
“There is no more important issue in health care than the need to reform a broken provider payment system that perpetuates a fragmented and unaccountable delivery system. In moving towards a bundled payment system for distinct episodes of illness, the PROMETHEUS Payment model is clearing a promising path forward.”
Andrew Webber, President and CEO
National Business Coalition on Health, Washington, D.C.
The Robert Wood Johnson Foundation focuses on the pressing health and health care issues facing our country. As the nation's largest philanthropy devoted exclusively to improving the health and health care of all Americans, the Foundation works with a diverse group of organizations and individuals to identify solutions and achieve comprehensive, meaningful and timely change. For more than 35 years, the Foundation has brought experience, commitment, and a rigorous, balanced approach to the problems that affect the health and health care of those it serves. By helping Americans lead healthier lives and get the care they need, the Foundation expects to make a difference in our lifetime.
PROMETHEUS Payment®, Inc., is a nonprofit corporation created to steward the further development and implementation of the PROMETHEUS Payment model specifically designed to: improve quality; lower administrative burden; enhance transparency; and support a patient-centric and consumer-driven environment, all while facilitating better clinical coordination throughout health care. The PROMETHEUS Payment model is intended to create a payment environment where doing the right things for the patient helps providers and insurers do well for themselves. The name speaks to the values of the model: Provider Payment Reform for Outcomes, Margins, Evidence, Transparency, Hassle Reduction, Excellence, Understandability and Sustainability.
Innovative Resources for Payors (IRP) provides solutions and services for insurance carriers, third-party administrators, HMOs, PPOs, self-insured employers and other payor organizations. IRP's knowledge and technology, including its Claimshop®/contract modeling, increase the accuracy, affordability and efficiency of claims management. With more than 250 clients and more than 15 years of experience in the managed care marketplace, our people and systems help payors achieve unprecedented claims automation.