Reducing potentially avoidable complications in patients with chronic diseases: the Prometheus Payment approach
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Francois De Brantes1, Amita Rastogi, Michael Painter
1Health Care Incentives Improvement Institute Inc, 13 Sugar Street, Newtown, CT 06470, USA. francois.debrantes@hci3.org
Insights
A new payment model may reduce costs associated with potentially avoidable complications (PACs) in chronic illness patients. Implementing this model could save millions by incentivizing practices to lower PACs and improve patient outcomes.
Area of Science:
- Health economics
- Healthcare management
- Patient safety
Background:
- Potentially avoidable complications (PACs) represent a significant cost burden in chronic illness care.
- Current payment models may not adequately incentivize the reduction of PACs.
Purpose of the Study:
- To evaluate a new payment model's potential to reduce PACs in patients with chronic conditions.
- To quantify the financial impact of PACs and the potential savings from their reduction.
Main Methods:
- Analysis of a claims database of 3.5 million commercially insured members.
- Utilized Prometheus Payment model software to assess costs and PACs for six chronic conditions.
- Conducted a literature review on PAC reduction feasibility and estimated financial impact on a prototypical practice.
Main Results:
- PACs account for 28.6% of costs for studied chronic conditions, with significant variability.
- Reducing PACs to the second decile could save an estimated $116.7 million.
- The Prometheus model offers a strong incentive for practices to decrease PACs.
Conclusions:
- Payment reform, utilizing models like Prometheus, has the potential to reduce healthcare costs.
- Extrapolated findings suggest a potential 3.8% decrease in total costs for the studied chronic conditions.
Unlabelled:
OBJECTIVE (OR STUDY QUESTION): To determine whether a new payment model can reduce current incidence of potentially avoidable complications (PACs) in patients with a chronic illness.
Data Sources/Study Setting:
A claims database of 3.5 million commercially insured members under age 65.
Study Design:
We analyzed the database using the Prometheus Payment model's analytical software for six chronic conditions to quantify total costs, proportion spent on PACs, and their variability across the United States. We conducted a literature review to determine the feasibility of reducing PACs. We estimated the financial impact on a prototypical practice if that practice received payments based on the Prometheus Payment model.
Principal Findings:
We find that (1) PACs consume an average of 28.6 percent of costs for the six chronic conditions studied and vary significantly; (2) reducing PACs to the second decile level would save U.S.$116.7 million in this population; (3) current literature suggests that practices in certain settings could decrease PACs; and (4) using the Prometheus model could create a large potential incentive for a prototypical practice to reduce PACs.
Conclusions:
By extrapolating these findings we conclude that costs might be reduced through payment reform efforts. A full extrapolation of these results, while speculative, suggests that total costs associated to the six chronic conditions studied could decrease by 3.8 percent.
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