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In the current debate over health care reform, many observers are proposing new delivery structures to move U.S. health care away from fragmentation, poor performance, and dysfunction toward accountability for high-value care. Ideally, these new structures would promote clear accountability for both improving quality and controlling costs and would encourage health care professionals to organize themselves into teams working on behalf of patients. For such structures to be sustainable, however, the payment system must reward professionals for the quality and efficiency of services, rather than the quantity.
Our fee-for-service payment schemes have contributed to, if not largely created, the current fragmentation. Fee-for-service payments create incentives to provide high volume rather than high value -- more, not better, care. So what kinds of payment could promote and sustain high-value care and motivate the development of accountable care organizations? Most experts agree that some sort of bundled, episode-based payment would help to move the system in the right direction. Our own approach, the Prometheus Payment model, for instance, bundles services and provides a budget with three components: evidence-informed base payment with patient-specific severity adjustments and an allowance for potentially avoidable complications (see box, "The Prometheus Model").1 ,2 The model has been developed and evaluated through several small pilot projects, which offer some lessons about the ability of episode-based payment to improve cost and quality within the current fee-for-service system. This kind of payment aims to foster outcomes-focused collaboration among otherwise unaffiliated providers and offers a bridge from our fragmented system to a more integrated, accountable one.
The model encourages two behaviors that fee for service discourages: collaboration of physicians, hospitals, and other providers involved in a patient's care; and active efforts to reduce avoidable complications of care (and the costs associated with them). It accomplishes these goals by paying for all the care a patient needs over the course of a defined clinical episode or a set period of management of a chronic condition, rather than paying for discrete visits, discharges, or procedures.
When incentives are used to drive changes in behavior, it is important that people and organizations are held accountable only for the variables that are actually under their control.3 That's why, in designing the Prometheus model, we decided to focus on the potentially avoidable...