Bundled-payment demo advocates push forward despite challenges
Payment-reform demos advance despite obstacles
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.