Lessons Learned: Implementation of Prometheus Payment Initiative - M. Susan Ridgely & Peter S. Hussey RAND Corporation Meredith B. Rosenthal ...
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Lessons Learned: Implementation of
Prometheus Payment Initiative
M. Susan Ridgely & Peter S. Hussey
RAND Corporation
Meredith B. Rosenthal
Harvard School of Public HealthBundled Payment Attempts to Address Some
of the Well Documented Problems of
Fee-For-Service Payment
• Reduce unnecessary cost and waste in the delivery and
administration of care
• Standardize the delivery of guideline-concordant care
• Align incentives so that providers are rewarded for
efficiency and quality rather than production of units of
service
• Allocate risk to the entities best able to manage that risk
(insurance risk to payers, clinical risk to providers)
ID Here-2 Jun-04A Single Price for All Services Needed
Example: Bundled Payment for Procedures
ID Here-3 Jun-04Why Bundle?
• Problems with current payment options:
– Fee for service rewards volume of services but
not appropriateness or coordination of care
– Global capitation shifts too much risk to
providers and creates incentive for risk
selection
– Pay for performance does not move enough
money to provide a strong incentive
• Is bundled payment the “perfect” compromise?
ID Here-4 Jun-04Health Care Reform Created Momentum…
• “How do we get ahead of the coming wave of
change?”
• “We need to be developing ACOs or medical
homes…”
• “How can we structure payment under these new
models?”
• “CMS (the 800 lb. gorilla) is coming down this path
and we had better get ready….”
ID Here-5 Jun-04The Literature Cautions That Bundled
Payment May Not Be So Easy To Implement….
• There is a lot of variability in the “readiness” of hospitals
and physicians to adopt payment reform
• Bundled payment requires a definition of a bundle that is
accepted by providers as valid
• Operationalizing the bundled payment requires identifying
episodes using FFS payments in “real time”
• Setting the payment amount so that it is not too high or too
low will require negotiation
• Robust quality measures are needed to guard against
unintended consequences and to provide tools for
improvement
ID Here-6 Jun-04Not So Easy to Implement (Cont.)
• Reaching agreement on an incentive structure between
payers and providers may be challenging
• The bundled payment must be divided among providers in a
way that will enhance accountability - but who will do that and
how?
• Providers must be motivated to act together to manage
clinical care and improve outcomes - can this work in places
other than Geisinger?
• Clinical re-engineering is often promised (for example, in
various P4P demonstrations) and rarely observed
• The task is going to be hard and there will be trial and error
involved
ID Here-7 Jun-04Little Empirical Work to Guide Implementation
• Proposals were largely conceptual, with little empirical work
or experience in applied settings to guide their design:
– Geisinger Health System’s payment for cardiac care
episodes
– Medicare Acute Care Episodes (ACE) demonstration for
orthopedic and cardiovascular procedures
– Medicare Physician Hospital Collaboration
demonstration, which is testing gainsharing models
involving physician-hospital collaborations, with an
emphasis on tracking patients beyond the inpatient stay
ID Here-8 Jun-04What is Prometheus Payment?
• A voluntary 3-year effort by a “design team” led by HCI3
and made up of employers, health plans, providers, and
health services researchers
• Funded by the Commonwealth Fund (2006) to develop
“evidence informed” case rates
• Funded by the Robert Wood Johnson Foundation (2007-
2010) to plan implementation and “road test” in five
demonstration sites
• RWJF also funded RAND and Harvard to provide an
independent evaluation to determine early “lessons
learned”
ID Here-9 Jun-04Case Study Approach Appropriate for
Evaluation
• Small number of sites (3-5)
• Complexity and stage of intervention
• Primary interest in questions of implementation:
– Is the model “scalable”
– What bodes success or failure?
• A series of telephone interviews and a site visit in
last year of the demonstration
ID Here-10 Jun-04Speaking “Promethean”
• Evidence-Informed Case Rates (ECR)
• Typical costs
• Potentially avoidable complications (PAC)
• The Engine (runs analytics)
• The Scorecard (quality data)
ID Here-11 Jun-04Prometheus Software Uses Algorithms…
• To group claims in a claims database into episodes
of care
• To divide services provided into two categories:
“typical” and “potentially avoidable complications”
• To calculate payment amounts
• To determine a risk score for each episode
• And then calculate a payment rate (ECR)
ID Here-12 Jun-04What is an ECR?
• A single, risk-adjusted, prospective (or retrospective)
payment given to providers across inpatient and outpatient
settings to care for a patient diagnosed with a specific
condition
• Based on the resources required to provide care as
recommended in well-accepted clinical guidelines
• Combined with performance incentives -- a portion of
payment is withheld and redistributed based on providers’
performance on quality measures
• With a built-in allowance for PACs (which acts as a
“warranty”). The allowance is based on 50% of the current
rate of observable complications, recognizing the reality
that some complication rate is unavoidable
ID Here-13 Jun-04The Target is Managing Potentially
Avoidable Complications
• According to Prometheus Payment, PACs consume an
average of 25 cents of every dollar of an acute care or
procedural ECR
– “Never events,” hospital acquired infections and re-
admissions constitute the bulk of the inpatient acute
and inpatient procedural PACs
• PACS consume an average of over 60 cents of every
dollar of a chronic care ECR
– Inpatient admissions, ED and urgent care use
account for the bulk of chronic care PACs
• Dollars currently spent on PACs can be redirected to
create powerful incentives to reduce PAC rates, creating
a win-win for providers and payers
ID Here-14 Jun-04RWJF Demonstration Sites
• Three demonstration sites participated in the
evaluation:
– An employer coalition contracting with two local
health systems (ECOH, IL)
– An integrated delivery system with a “captive”
health plan (Priority Health-Spectrum Health, MI)
– An integrated delivery system contracting with local
health plans (Blue Cross-Crozer Keystone, PA)
• Each site was expected to:
– “Normalize” the ECR data (create site-specific
calibration of ECR typical and PAC rates)
– Develop quality data for the Scorecard
– Engage providers in clinical re-engineering
ID Here-15 Jun-04This Would Be a Limited Road-Test…
• No financial risk for providers (so sites can fully beta
test all ECRs, severity algorithms, and provide
information on upside and downside to providers)
• Fee-for-service with year-end reconciliation - no site
would get to prospective payment
• Focus on ability to operationalize all of the components
of Prometheus (use of Engine, Scorecard)
• Each site chose one or more ECRs - no site attempted to
do more than 3-5 ECRs
ID Here-16 Jun-04Sites Experienced Considerable Challenges
• Defining bundles
• Defining the payment method
• Implementing quality measurement
• Determining accountability
• Engaging providers
• Delivery redesign
ID Here-17 Jun-04Lessons Learned - This is Not for
the Faint of Heart
• After three years of implementation - no site has implemented
bundled payment even for “upside only” risk
• Problems with ECR specifications and analysis has been time
consuming for pilot sites (SAS code was “alpha” not “beta”)
• Getting provider buy-in was not a problem in any of the three
sites (strong support from the c-suite) but front line staff not
yet engaged at this point
• In two sites, payers reluctant to “share savings” and for some
providers shared savings would be such a small % of revenue
that unlikely to change behavior
ID Here-18 Jun-04Lessons Learned (cont).
• Problems with quality measure specifications have slowed
progress for providers in one site - even those with well-
established EMR.
• Some providers are struggling with how to make PACs
(administrative data) into “actionable” information for
clinicians
• Potential “leakage” of patients out of health systems is
identified as a problem - but no solution is apparent
• Benefit design/patient incentives seen as important but not
addressed in the demonstration
• Given that readmissions drive PAC costs, some wonder
whether the effort expended to define all the other PACs was
worth it
ID Here-19 Jun-04Conclusions
• Prometheus is a complex system that takes longer than
expected to implement - partly due to “Promethean” but partly
because bundled payment is complex and must build on
existing complex health care systems
• There is a question about whether other methods (simpler)
could achieve same gains
• Bundled payment may be more likely to be successful among
certain types of participants who are prepared for the
challenges – ideally integrated payer and delivery systems
• Providers are interested in participating to get ahead of
coming national reforms, but distrust complex, abstract
reports especially if based on claims.
ID Here-20 Jun-04Conclusions (cont.)
• Pilot site participants have seen more value in Prometheus as
a measurement tool than a payment method to date
• Despite slow progress, Prometheus has opened up important
lines of dialogue and made participants more aware of their
capabilities in areas including claims analysis and EMR-based
quality measurement
ID Here-21 Jun-04Health Affairs – November 2011
• Hussey, P., Ridgely, M.S., & Rosenthal, M. (2011). The
PROMETHEUS Bundled Payment Experiment: Slow
Start Shows Problems in Implementing New Payment
Models. Health Affairs, 30(11), 2116-2124.
• ridgely@rand.org
ID Here-22 Jun-04You can also read
