Today’s post will continue exploring emerging models for payment reform through an excellent summary paper [scroll to p.9] by M. Rosenthal in the New England Journal of Medicine (“Beyond Pay-for-Performance – Emerging Models of Provider-Payment Reform”, September 2008).
She lists the following models at various stages of development (as of her writing in 2008):
- Incremental reform: non-payment for avoidable complication (surgery on the wrong body part or catheter-associated urinary tract infections, for instance) – currently in use.
- Primary care payment reform
- Tiered case-management fees in addition to fees for service, paid per patient per month to practices demonstrating “medical homes” characteristics (a setup with more low-level interactions with patients designed for the primary care physician to take more responsibility in integrating the care of the patient) and including performance fees – pilot under development.
- Primary care capitation with performance incentives – pilot under development.
- Episode-based payment reform
- Episode-based payment model that defines global case rates for given clinical conditions, with a comprehensive score card, risk stratification and complication allowance – Prometheus, pilot under development.
- 90-day global fee paired with high-reliability process improvements to achieve 40 best-practice standards – in use now.
- Shared savings
- Bonus for demonstrating slower growth in spending for patient care relative to peers, quality of performance affects share of savings – in use now.
- Primary care physicians eligible to share in savings according to their performance on use of generics, emergency room visits and other criteria – in use now.
Common themes to these models include:
- Value-based payments, driven by cost control as well as adherence to clinical guidelines and quality measures
- The need to distinguish random variations in outcomes and patient mix from variation in practices and avoidable complications.
- Connections between payment models and specific care delivery and organizational models (e.g., shared-savings models and large, integrated healthcare systems.)