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Evidence-based medical payment system proposed


WASHINGTON—A payment model based entirely on evidence-based medical guidelines is nearly ready to be tested.

Even so, some doubt it will ever become the health care standard in the United States.

Designed to distribute clinical and insurance risk in a way its proponents claim is more fair, Prometheus Payment Inc. would pay health care providers based on what it costs to deliver only the care that medical science has proven to be appropriate for specified conditions. This differs from traditional fee-for-service payments, which can encourage a high volume of service, and capitation, which can induce providers to restrict services.

Washington-based Prometheus, which was unveiled last week, was developed by a team of experts in health care economics, law, policy, health plan operations and performance measurement that has been working quietly behind the scenes for the past two years (see list, page 25).

The group, which includes Francois de Brantes, national coordinator for the Washington-based Bridges to Excellence, an employer-spearheaded pay-for-performance initiative, is now looking for pilot demonstration sites to test, refine and implement the model.

Some of the sites being considered are Chicago; Cincinnati; Detroit; Memphis, Tenn.; Philadelphia; San Francisco; Seattle; and Worcester, Mass. These locations are being targeted because they can provide the critical mass necessary to make participation attractive to providers while also creating a valid sample for research purposes, Mr. de Brantes said.

They also have local business coalitions that are members of the National Business Coalition on Health, whose president, Andrew Webber, has been involved in developing Prometheus.

"Employers have welcomed pay-for-performance initiatives because they encourage transparency and performance measurement," Mr. Webber said. "Prometheus is the next generation. It is a fundamentally different health care reimbursement methodology that aligns payment with evidence-based care and ultimately that's what we need to control health care costs and bring quality care to our employees."

In the pilots, 12 so-called Evidence-Based Case Rates, or ECRs, will be applied in five specific clinical areas: cancer care, beginning with lung and colon cancers; chronic care, starting with diabetes, depression, hypertension and hyperlipidemia; interventional cardiology; orthopedic care, in particular joint replacements; and routine and preventive care. Hyperlipidemia is an elevation of lipids, which include cholesterol and triglycerides, in the bloodstream.

These conditions were selected because they are among those for which the various medical societies have agreed on treatment guidelines and protocols. A white paper introducing Prometheus posted on the organization's Web site poses a challenge to the medical profession to develop additional clinical practice guidelines that can form the basis for developing case rates for most other medical conditions and procedures.

The Prometheus case rates will include adjustments for illness severity, whether patients have other conditions that might complicate their care as well as regional cost variations, Mr. de Brantes said.

Providers that produce high-quality outcomes can make more than 100% of the ECR, while poor performers will make less. Providers will be responsible for additional costs that arise as a result of their own medical errors.

To ensure that providers don't skimp on care to capture a greater payment-something often alleged to have occurred under managed care because of capitation-the Prometheus system will collect data on the quality of care that is delivered, such as outcomes, patient experience and cost efficiency, and generate a comprehensive scorecard on participating providers.

"It's all about the scorecard," Mr. de Brantes said. "Capitation never had good scorecards, and it passed on insurance risk. That's not to say someone won't try to skimp, but history and economics show that cheaters are a minority that is actually easy to spot."

The Prometheus "engine," the software system that would be used to administer the new payment system, is in development and is to be ready to roll out in two to three months, according to Mr. de Brantes. To ensure ease of transition, it is being designed to link to health plans' existing payment systems, he said. The Prometheus engine will also be designed to accommodate payments to a wide range of providers that participate in the treatment of each patient-from doctor to hospital to rehabilitation facility, Mr. de Brantes said.

Fighting waste

Helen Darling, president of the National Business Group on Health, a Washington-based organization of large employers that has been working on initiatives aimed at reducing costly medical errors, is supportive of the group's effort to redesign the medical payment system.

"They certainly are attacking a serious problem-a fatally flawed payment system-that pays for redundant tests and services, yet pays next to nothing for physicians to spend time counseling and talking with patients on their most critical health issues," she said.

"We need to learn what methods of payment are effective and encourage and reward the right behaviors. Private and public payers need to change the way they pay for care and this very creative initiative will teach us a lot about what works and what we should be doing in the near future. We are wasting many billions now on the wrong care because of our distorted payment system," Ms. Darling said.

New York-based independent benefit consultant Joe Martingale, who was formerly with Watson Wyatt Worldwide, also commended the group.

"It's a big boost to reforming the health care market. It attempts to get the financial incentives right and introduces new information both for payers and consumers," Mr. Martingale said. Moreover, "it's throwing down a challenge, explicitly to the medical profession through their medical societies, to assist in making this work well by telling the world what the best evidence-based treatments are for all of the various conditions that they are responsible for."

However, Ray Brusca, vp of benefits at Black & Decker Corp. in Towson, Md., was skeptical that the approach would ever gain a foothold nationwide regardless of how well the pilots work.

"I just don't see any change in the payment system possible unless two things happen. First, as goes Medicare and Medicaid, so goes the rest of the system. So unless they change their medical reimbursement system, you're not going to see it widely adopted," he said. "There have been some limited experiments that have worked, but as far as on a widespread basis where it trickles down to everybody else, unless Medicare and Medicaid change the way they reimburse the medical community, the medical community is not going to go along with it."

The other part of the equation that is not being addressed is the patient and their families who, when it comes to their health or their loved one's health, think they should have access to unlimited resources, he said.

"So unless you get a change in the way the larger medical community accepts payment-and that's through Medicare and Medicaid-as well as get patients to understand that only certain approaches to medical care will be reimbursed, I don't think anything has a chance of flying broad-based. The tail doesn't wag the dog, and Medicare and Medicaid as well as the population as a whole is the dog," Mr. Brusca said.