Managed Healthcare Executive - December 2008 - (Page 21)

{SPECIAL REPORT} lung and colon cancer through Stage III; three interventional cardiology diagnoses; knee and hip replacements; primary care of diabetes and depression; and preventive care. “The PROMETHEUS case-rate payment model is somewhere between pure fee-for-service and pure global capitation,” according to Francois de Brantes, MS, MBA, national coordinator for both Prometheus Payment and Bridges to Excellence. “It’s an event-by-event, patientby-patient payment that is calibrated according to risk factors and re ective of fee schedules and other negotiated rates. It seeks to be fair to both payers and providers, while still maintaining patient centricity.” The PROMETHEUS model is based on evidence-informed case rates (ECRs), which are risk-adjusted, prospective or retrospective payments given to physicians in inpatient and outpatient settings to care. The PROMETHEUS ECR model calls for a portion of the payment to be withheld and redistributed based on providers’ performance on measures of clinical process, outcomes of care and the patient’s experience. “When you create a bundle of services, you are essentially giving it a budget,” de Brantes says. “The bigger you make the bundle, the greater its budget, as well as its reach across di erent providers and settings.” De Brantes hopes to be able to observe a measurable reduction in preventable complications. In other words, when physicians are ready to make a referral, they should increasingly be asking themselves how well certain hospitals will treat patients during their stay. Hospitals, in turn, should be thinking about how likely patients are to come back for readmission after they’ve been discharged. According to de Brantes, the scorecard, the rates of potentially avoided complications, and the dollars associated with them cut across all providers who touched that patient. “That’s how we maintain patient centricity while rewarding providers systems—more than quality, e ciency for making good decisions about who or demand. they align themselves with in the comOn the other hand, 81% of global munity,” he says. health executives said that better coordination of care would do the most to WHAT YOU PAY FOR improve quality in their country, and The United States is not alone in its that paying bonuses to hospitals and phystruggle to improve healthcare deliv- sicians for care coordination was among ery and ways to pay for it. A report is- the top ve methods needed to improve sued in June by PricewaterhouseCoo- quality and e ciency. pers’ Health Research Institute showed “In almost every developed country in that about two-thirds of health leaders the world, healthcare costs are growing at unsustainable levels,” Dr. Chin says. “That’s because, like the United States, patients are paying for volume, not the outcome. Every country needs to address healthcare cost in ation, and one of the ways to do that is to change the payment structure. The hope is that, in a bundled system, people will be paying for an episode of care, and we can put parameters around the quality of that care as well.” One of the rst challenges that a bundled payment system might face here is whether it will run afoul of the law—as Dr. Chin says, the Stark rule Francois de Brantes, MS, MBA against physician self-referral might National coordinator for Prometheus come into play. Payment and Bridges to Excellence “Other potential issues include how to allocate the savings between hospitals and from 20 countries, including govern- physicians, how to rate and de ne what ment and private payers, see problems ‘quality outcomes’ means, and the potenwith their current systems and are tial for the cherry-picking of simpler cases now studying payment models that while leaving the more complicated ones use incentives to better balance access, for someone else … a new version of adquality, e ciency and demand. verse selection,” he says. “Health systems are at risk of cavitating However, since Medicare is the nation’s nancially, and there is tremendous focus largest payer, health plans tend to follow on cutting costs,” says David Chin, MD, along, Dr. Chin says. When CMS anleader of PwC’s Health Research Institute, nounced its [bundled payment project], a “but cutting costs at the expense of quality lot of the payers around the country began and e ciency is economically and socially examining the idea more closely. devastating. This is why a reimbursement “Today, managed care executives should model that properly aligns incentives to be thinking about their contracting stratepromote quality and e ciency is so vital gies and ways they can move away from to future sustainability.” paying per unit of volume,” he says. “If In the report, titled “You Get What they negotiate the per-unit rate down, all You Pay For: A Global Look at Balanc- it does is provide incentive for providers ing Demand, Quality and E ciency to increase the number of units.” in Healthcare Payment Reform,” cost He advises that payers should look for control was ranked as the most impor- payment schemes that motivate physicians tant factor in developing future payment and hospitals to reduce volume. MHE “When you create a bundle of services, you are essentially giving it a budget.” - DECEMBER 2008 21

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Managed Healthcare Executive - December 2008 For Your Benefit Editorial Advisors Contents News Analysis Politics & Policy Letter of the Law Puerto Rico’s PLAN State Report Bundled Payment Technology Drug Class Overview Managed Care Outlook Desktop Resource Ad/Edit Index

Managed Healthcare Executive - December 2008

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