Bun­dled-pay­ment demo ad­vo­cates push for­ward de­spite chal­lenges

Pay­ment-re­form de­mos ad­vance de­spite ob­sta­cles

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Launched with a cam­paign that sought to set the world on fire, the ini­tial pi­lots us­ing the Prometheus bun­dled-pay­ment model found them­selves strug­gling to get started as im­ple­men­ta­tion proved to be as tor­tur­ous as the project’s acro­nym.

With a $6 mil­lion Robert Wood John­son Foun­da­tion grant it re­ceived in 2007, the Health Care In­cen­tives Im­prove­ment In­sti­tute de­vel­oped Prometheus, which stands for “Provider pay­ment Re­form for Out­comes, Mar­gins, Ev­i­dence, Trans­parency, Has­sle-re­duc­tion, Ex­cel­lence, Un­der­stand­abil­ity and Sus­tain­abil­ity.” The con­cept in­volves cre­at­ing ev­i­dence-in­formed case rates, or ECRS, to cal­cu­late the cost of care episodes with prob­a­bil­ity risks taken on by pay­ers and tech­ni­cal risks—those de­ter­mined to be within a provider’s con­trol—be­ing shoul­dered by providers.

Last Novem­ber, health pol­icy jour­nal Health Af­fairs pub­lished a RAND Corp. re­port not­ing that, as of May 2011, no con­tracts had been signed, no bun­dled pay­ments had been made, and im­ple­men­ta­tion was full of un­fore­seen chal­lenges—mostly be­cause of the com­plex­ity of the pay­ment method­ol­ogy. Yet de­spite this, par­tic­i­pants be­lieved the pro­gram would even­tu­ally re­sult in re­duced costs.

And, while lessons have in­deed been learned and ob­sta­cles to im­ple­men­ta­tion re­moved, the re­port’s au­thors con­cluded that de­lays as­so­ci­ated with the use of claims data and the time needed to learn and use the com­plex Medas- sets’ Episode of Care En­gine com­puter sys­tem “are likely to be ex­pe­ri­enced” by new Prometheus par­tic­i­pants.

Fran­cois de Brantes, the in­sti­tute’s ex­ec­u­tive di­rec­tor who has su­per­vised the Prometheus pi­lot im­ple­men­ta­tions, ve­he­mently dis­agrees.

“It’s ab­so­lutely un­true,” de Brantes says, ex­plain­ing how the quick im­ple­men­ta­tions with the sec­ond-round pi­lots in North Carolina and Wis­con­sin “com­pletely con­tra­dict” the Health Af­fairs state­ment that even those who learn from his­tory are still doomed to re­peat it.

Up and run­ning

Ac­cord­ing to de Brantes, the CEOS at Blue Cross and Blue Shield of North Carolina and Caromont Health im­ple­mented a knee-re­place­ment pro­gram, worked out con­tracts and set bun­dled prices and risk-shar­ing agree­ments within four months. In Wis­con­sin, An­them Blue Cross and Blue Shield and the Robert Wood John­son Foun­da­tion’s Align­ing Forces for Qual­ity ef­fort worked out their own knee-re­place­ment pro­gram with in­ter­ested providers in nine months. (A di­a­betes pro­gram is still in the works.)

“Where there’s CEO en­gage­ment, things are tak­ing off,” de Brantes says, adding that, with­out that en­gage­ment, “it’s a heav­ier lift.”

The main au­thor of the re­port, RAND pol­icy re­searcher Peter Hussey, how­ever, stands by the pa­per’s find­ings and says the three ini­tial pi­lots—in Illi­nois, Michi­gan and Penn­syl­va­nia—all had CEO en­gage­ment and char­ac­ter­izes them as “more pre­pared than most” health­care or­ga­ni­za­tions to take on a com­plex bun­dled­pay­ment method­ol­ogy.

“Even with CEO en­gage­ment, you need en­gage­ment of front­line staff to get this model to pro­ceed,” he says. “That will take some time.”

Hussey adds what was par­tic­u­larly “eye open­ing” was the amount of in­for­ma­tion needed to track and eval­u­ate the cost of an episode of care and the de­fi­cien­cies in the claims data be­ing used to do that.

The pi­lot in Rock­ford, Ill., in­volves the Em­ploy­ers’ Coali­tion on Health, a health­care-pur­chas­ing coali­tion of some 160 em­ploy­ers, the Swedish-amer­i­can Health Sys­tem and OSF St. An­thony Med­i­cal Cen­ter. A kick­off meet­ing was held in Septem­ber 2009, but no bun­dled pay­ments have been made yet re­gard­ing pro­grams tar­get­ing coro­nary artery dis­ease, di­a­betes and hy­per­ten­sion.

“We were ex­pect­ing to move through the im­ple­men­ta­tion much faster,” says Al­bert Ferrabone, man­age­ment ser­vices or­ga­ni­za­tion qual­ity man­ager at Swedish-amer­i­can. “We came across the prover­bial ‘devil in the de­tails’ from the very first start­ing point.”

Among the snags that were hit right out of the gate were prob­lems with the Prometheus datause con­fi­den­tial­ity and busi­ness as­so­ci­ate model agree­ments. “Our le­gal coun­sel felt they were not suf­fi­cient,” Ferrabone says.

Other prob­lems in­cluded third-party pay­ers not hav­ing unique mem­ber iden­ti­fiers. In­stead, num­bers were as­signed at the fam­ily level, and this led to prob­lems cal­cu­lat­ing who was in­volved in the episode of care as it could not be de­ter­mined whether it was in­di­vid­u­als in­sured through their em­ployer, their spouses or their de­pen­dent.

There also were prob­lems with pre­scrip­tion data and slow feed­back on qual­ity. And “de­spite the best ef­forts” on the part of ECOH, Ferrabone says the em­ployer coali­tion was “un­able to se­cure com­mit­ment from em­ploy­ers on shared sav­ings” pay­ments.

All that said, how­ever, Ferrabone cred­its the ECOH for hav­ing fore­sight for bring­ing Prometheus to the Rock­ford mar­ket.

“They cer­tainly put their heart and soul into this,” he says.

Ferrabone rec­om­mends that any or­ga­ni­za­tion look­ing to adopt the Prometheus method­ol­ogy par­take in a self-as­sess­ment first to make sure ev­ery­one is on the same page and the in­for­ma­tion tech­nol­ogy in­fra­struc­ture can de­liver what is re­quired.

“One of the things Prometheus needs is qual­ity data,” Ferrabone says. “Do you have an elec­tronic med­i­cal record to re­trieve that data? Does your IT sys­tem pro­vide the gran­u­lar level to de­liver on that? … You don’t want get into a

Ob­servers say man­ag­ing the cost of chronic ill­ness— such as asthma and di­a­betes—is one area where bun­dled pay­ments have high po­ten­tial.

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