Jesse C James, MD MBA
Resident Physician
Internal Medicine, UNCH
The Changing
Landscape of Primary
Care: PROMETHEUS
and the Medical Home
Model
Avalere Health LLC | The intersection of business strategy and public policy
OUTLINE: Medical Home
 Introduction
 Background
 Features
 Benefits/Barriers
 QUESTIONS
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OBJECTIVES
 WHAT IS A MEDICAL HOME?
 WHERE DID THE MEDICAL HOME COME FROM?
 WHAT DO MEDICAL HOMES DO?
 HOW DOES A MEDICAL HOME WORK?
 WHO DOES THE MEDICAL HOME BENEFIT?
 WHAT ARE THE BARRIERS TO ADOPTION?
 WHERE IS THE MEDICAL HOME GOING?
We are going to answer these questions but should raise
many more questions than we answer.
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WHAT IS A MEDICAL HOME?
“Home is not the place you live, but where they
understand you.”
-Cristion Morgenstern
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DEFINITION
 CMS: “Practices …become medical homes by
demonstrating they have capabilities to provide medical
home services.”
 ACP: In a MH, a personal physician works with a team
of professionals in a practice that is organized according
to the principles of the MH.
 Wiki: “continual care that is managed and coordinated by
a personal physician with the right tools that will lead to
better health outcomes”
 AAFP: focal point for patients to receive “a basket of
acute, chronic, and preventive medical care” that is
accessible, accountable, comprehensive, safe, valid
and satisfying.
A medical home is what primary care should be and
does what primary care should do.
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DEFINITION
MH is a physician based practice that is not a gatekeeper for,
but is a navigator of, complex medical care. These
physicians are knowledgeable of and responsible for the
comprehensive care of their patient population and these
practices demonstrate transparent, high quality care to
payers and stakeholders.
The MH concept involves a realignment of incentives and
redesign of practice to make the medical home practice
possible.
Application of the MH concept creates an environment where
MH practices can thrive.
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HISTORY
1967 AAP introduces “medical home” as model for pediatric chronic
disease (Sia, 2004)
1978 WHO recognizes “primary care” core elements (WHO, 1978)
2000s Evidence basis grows for and policy consensus supports IT
adoption
2001 Crossing the Quality Chasm IOM report describes gaps between
evidence based care and commonly occurring care (IOM, 2001)
2004 AAP publishes definition with 30+ elements (Palfrey 2008)
2006 TRHCA mandates CMS MH demonstration project
2007 AAFP,ACP,AAP,AOA announce joint principles of “PCMH”
There have been two distinct phases: Pre-Quality Movement MH 1967-1999 and
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Modern Quality Movement MH (2000-present).
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GLOSSARY
 MH: Any medical home, with either basic or advanced
capabilities
 CMH: Core Medical Home with basic features
 AMH: Advanced Medical Home
 PCMH: Patient Centered Medical Home=CMH
 MH Practice: individual practices
 MH Concept: broad reform to reimbursement landscape
Framework: MH can be Core or Advanced depending on capabilities.
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“Patient-Centered”, ”Physician-Guided” are common descriptors.
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WHAT DOES A MEDICAL HOME DO?
“Home is the place where, when you have to go
there, they have to let you in.”
-Robert Frost
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FRAMEWORK: Advanced vs Core
Advanced
Medical Home
Core Medical
Home
Innovative IT
Integration
PCP
responsibility
Comprehensive
Patient
Involvement
Coordinated
Standardized
Evidence Based
Care
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FRAMEWORK: MH Concept
CMH
CMH
AMH
CMH
AMH
CMH
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Core Medical Home Features
 PCP identified as responsible for care.
 Enhanced access or extended hours.
 Team approach to care that leverages non-physician staff.
 Teams provide standardized evidence-based care.
 Practice utilizes tools to track demographic data and clinical
progress.
Core Elements address enhanced access, quality, and
coordination.
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Advanced Medical Home Features
 System is capable of same day scheduling and predictive
modeling for access.
 Practice encourages self management via patient access to EMR.
 Practice uses data from EMR to improve care and identify special
populations.
 Practice tracks test, referrals, prescriptions.
 Outcomes are reported to stakeholders and reviewed to improve
care.
Advanced Elements maximize open access, quality demonstration, care
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coordination via skillful use of health care IT.
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Elements of the Medical Home
NCQA CMS
OPEN ACCESS
Same day Access Scheduling
Extended hours/weekend hours
CLINICAL REVIEW
Store demographic info
Searchable clinical data
x
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x
x
CARE COORDINATION/MANGMNT
Partner with local hospital/Ers
SELF MANAGEMENT
Provides self monitoring equipment
IT Implementation
Use e-odering and result retrieval
Track Clinical Data
Use E-Prescription
Track refferals
Quality Assurance/Transparency
Measures clinical outcomes
Report clinical outcomes
Revise processes based on outcomes
INCENTIVE REALIGNEMENT
Implementation Stipend
Maintenance Payment
Value Based Bonus
Income Sharing
x
BTE CCNC Geisng
Teir 1 Tier 2
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EXAMPLE: GEISINGER
250 PCPs serving population of 2.5 million Pennsylvanians.
Pilot redesigned PCP to AMH model: “Personal Health Navigator”
24 hour access
Home based monitoring
Patient accessible EMR for refills and education
Monthly physician level quality reports
Standardized “all or nothing” bundles
$1800 monthly physician stipend; $5000 transformation grant
20% reduction in all hospitalizations and 7% total medical cost
Geissinger is a vertically integrated system that piloted an AMH,
produced IMPRESSIVE results and shared savings with PCPs.
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EXAMPLE: CMS PCMH Demonstration
 Tax Relief and Health Care Act of 2006
 Focused on patients with chronic disease
 CMS will recruit 50 practices in 8 states, 400 practices and 2000 physicians.
 Recruitment Jan 2009
 Initial application March 2009
 Two Tiers of MH representing core and advanced elements
CMS has created a MH pilot that will evaluate Core and Advanced MHs ,
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will pay a maintenance stipend and share savings.
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EXAMPLE: CMS PCMH Demonstration
TIER 1: 17 elements
•Describe MH to patient
•Establish written
standards on access
•Use data to identify/track
patients
•Build integrated care
plans
•Track test and results
TIER 2: 19 elements
•Use CCHIT-EHR
•Systematic approach to
coordinated care
•Utilize e-prescription
software
•Collect and report
performance measures
and revise processes
based on results.
CMS has created a MH pilot that will evaluate Core and Advanced MHs ,
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will pay a maintenance stipend and share savings.
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EXAMPLE: CMS PCMH Demonstration
Low Disease
Burden
High Disease
Burden
Tier 1
$27.12
$80.25
Tier 2
$35.48
$100.35
CMS will pay a Care Management Fee per enrolled patient
that is adjusted for severity of chronic disease.
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WHERE ARE MEDICAL HOMES GOING?
“There’s
nothing half so pleasant, as coming home again.”
-Margaret Elizabeth Sangster
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Benefits
 Continuous care improves patient satisfaction, education and use of
preventive services (Starfield 1998)
 Registries currently underused, associated with lower HgbA1c,
improved chronic care (East 2003).
 Team work essential component of high performing practices
(Grumbach 2001).
 Reduced cost, improved quality demonstrated at Geisinger.
Cost reduction, patient satisfaction, and quality improvement
have been demonstrated in MH pilots .
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Barriers
 Unclear message to providers and patients about MH.
 Physician reluctance to change- tradition of autonomy.
 NCQA tiers set to qualify 50%, 25%, 10% of practices.
 High transition cost and maintenance fees for EMR.
 Cost paid by PCP while savings reaped by hospitals and payersclassic market inefficiency.
 Future of MH practices and concept is uncertain.
The major barrier is the high transformation cost in the
presence of insufficient reimbursement .
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FUTURE DIRECTION
 Stop the bickering.
 It’s the economy…of course.
 Geisinger expanding its pilot system wide.
 Ultimately, adoption will depend on a compelling case being
made to PCPs.
 If the business case is made, there will be opportunities to train
practices, support IT and provide disease management.
THE AMH HAS THE POTENTIAL TO FUNDATMENTALLY
CHANGE THE PRIMARY CARE EXPERIENCE…
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Update: Tri-Caucus House Bill
 American Affordable Choices Act 2009
 Directs HHS to “establish a medical home pilot
program”
 Must include rural, urban, and underserved areas
 Differentiates “Community-Based” from Independent
PCMH
The house bill picks up where the planned CMS demonstration
left off
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Update: Tri-Caucus House Bill
 Appropriates $200M per year FY10-14 in addition to
appropriation in TRHCA 2006 (CMS Demonstration)
 Pilot to last not more than 5 years after which Secretary
must report to Congress and consider expansion
 Includes $1.2B for States to fund their own pilots
The house bill picks up where the planned CMS demonstration
left off
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Update: HELP Senate Bill
 Affordable Health Choices Act
 Sec.747. Funds grants for public or private entities to
provide training to PCPs to operate as PCMHs
 Sec. 212. Funds grants for States or State designated
entities to fund “Community Health Teams” that will
contract with PCPs for MH support
 Appropriates $125M per year from FY10-14
The Senate Bill funds construction of the required MH
infrastructure.
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Update: HELP Senate Bill
 “Community Health Teams” must:
- collaborate
with State officials and local PCPs on chronic
disease management
- implement multidisciplinary community preventive care
plans
- advise and assist PCPs in “monitoring health outcomes
and resources”
- provide “24-hour” care management and support around
care transitions
- demonstrate capacity to implement and maintain HIT
The Senate Bill includes funding for PCPs to “outsource” MH
capabilities.
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QUESTIONS
 Is the Medical Home model simply paying primary care
doctors more to do what they are already doing?
 Will Payers, Employers, and Hospitals partner to make the
case to PCPs?
 The AMH appears more costly than the CMH, do
outcomes justify the additional cost? Will free-riders dilute
the dose effect?
 Will there be expansion of the care coordination and
disease management market? Will PCPs “outsource”
medical home elements?
 Is there a market for “Medical Home Construction”
services?
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“Nothing in this title shall be construed to authorize
any federal officer...supervision or control over the
practice of medicine or the manner in which
medical services are provided.”
 Social Security Act 1965
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Case Study: PROMETHEUS
Payment ® Incorporated
The intersection of business
strategy and public policy
OUTLINE
 What is the origin of Prometheus?
 How does Prometheus work?
 How are episodes quantified?
 How are costs calculated?
 What have the pilots shown so far?
 What are the implications?
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PROMETHEUS Payment: Private Sector Innovation Paves
the Way for Reimbursement Reform
BACKGROUND
 Provider payment Reform for Outcomes, Margins, Evidence, Transparency,
Hassel-reduction, Excellence, Understandability, and Sustainability
 Convened in 2004 in response to The Institute of Medicine (IOM) call for novel
payment model and effective, efficient, patient-centered care. Funded initially by
GE Corporate Health 2004 to design and model episodes and payment.
 Funded currently $6 million by to implementation and evaluate pilot program
 A comprehensive cross setting Episode of Care (EOC) payment model
» Evidence-based episodes
» Shared-savings and quality-based reimbursement
» Collaboration-based bonuses
 The price of an episode of medical care is specific to any patient-provider-payer
triad. The price include all the services recommended and implied by evidencesupported or expert opinion
Sources: Gosfield, A. “Making PROMETHEUS Payment® Rates Real: Ya’Gotta’ Start Somewhere”. June
2008. http://www.prometheuspayment.org/publications/pdf/MakingItReal-Final.pdf
Gosfield, A. "PROMETHEUS Payment®: Better for Patients, Better for Physicians." Journal of Medical
Practice Management . September/October 2006. 100-104
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Evidence informed Case Rate and Potentially Avoidable
Complication Payment
Payment Methodology
P
Cost
Core
Services
Geographic
Price Index and
Severity
Adjustment
+
10% Margin
+
A
70% based
on clinician
quality
C
30% based on
referral quality
=
Payment
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Current Payment Systems Maintain Perverse Incentives
Payment System
Incentive
Collaboration
Effect
Party at Risk
Fee For Service
Maximize billable
volume.
Unless billable,
collaboration
discouraged.
Payer at risk,
minimal risk to
provider.
Capitation
Maximize patient
panel, minimize
visit volume.
Collaboration
encouraged.
Provider at risk,
minimal risk to
payer.
Collaboration on
quality and cost
is encouraged.
Shared risk
among provider ,
collaborators, and
payer.
ECR (evidence
Maximize volume
informed episodes of episodes,
of care)
minimize volume
of complications.
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Prometheus Includes Evidence Based Care and Expected
Rates of Complications in its Reimbursement System
Step 1: Translate
CPGs into
clinical services
Step 3:
Construct
Evidence informed Case
Rates (ECRs)
Step 2: Estimate cost
of CPG services +
implied services
Source: Gosfield, “Making PROMETHEUS Payment® Rates Real: Ya’Gotta’ Start
Somewhere” .June 2008. accessed June 14 2009.
CPG: Clinical practice guidelines
Implied services include care coordination, IT, disease management, etc.
Step 4:
Pay
Providers
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Step 1: How are episodes quantified? Prometheus Translates
Guidelines and Expert Practice Into Core Clinical Services
CPGs
CPGs
AHRQ/
USPSTF
Actual
Practice
The Prometheus group has
deconstructed CPGs to list all
distinct services that clinicians
must provide for high quality
care
For some diagnoses, there are
a limited numbers of guidelines.
Step 1: Translate
guidelines into core
clinical services
In general, actual practice
involves more care than is
described in guideline
recommendations.
The cores clinical services
consider CPGs, expert clinician
experience, and evidence based
practice
Source: Ostbye, et al., Is There Time For Management of Patients With Chronic Diseases in
Primary Care?, 3 Annals of Family Medicine, 2005. 209–14
Gosfield, A. “Making PROMETHEUS Payment® Rates Real: Ya’Gotta’ Start Somewhere”.
June 2008. http://www.prometheuspayment.org/publications/pdf/MakingItReal-Final.pdf
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Step 2: How are episodes costs calculated? Cost are
calculated from millions of claims
Hospital
Claims
Ambltry.
Claims
Step 2: Calculate
cost of core clinical
services
Patient
Reminders
Prometheus group accessed a
database with several million
unique patients
Costs calculated from all
annual claims for patients with
target diagnoses 2005-2006.
Claims from inpatient facilities,
inpatient professionals,
outpatient facilities, outpatient
professionals, and pharmacy
Calculated cost included both
guideline supported care and
clinically necessary implied
services
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STEP 3: The Core Clinical Services are the Foundation for
the ECR.
Step 3: Construct an ECR
PAC BONUS
10% MARGIN
SEVERITY ADJUSTMENT
LOCAL COSTS ADJUSTMENT
The ECR determines the
annual budget per patient.
PAC allowance is a quality
bonus.
10% margin encourages
reinvestment
Cost adjusted for disease
severity.
Cost adjusted for local price
“normal” variations.
CORE SERVICES COSTS
Core services are the base.
Source: Gosfield, A. “Making PROMETHEUS Payment® Rates Real: Ya’Gotta’ Start Somewhere”. June 2008.
http://www.prometheuspayment.org/publications/pdf/MakingItReal-Final.pdf
de Brantes, Gosfield, Emery, Rastogi, D’Andrea, "Sustaining the Medical Home: How PROMETHEUS Payment® Can Revitalize Primary
Care“. May 2009.
PAC: Potentially Avoidable Cost; ECR: Evidence –informed Case Rate
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Step 4: How is the PAC bonus funded? Prometheus
Designates PAC Costs Into a Trust
Prometheus calculates the
cost of all care and all
avoidable complications.
All Diabetes
Related
Claims
$1.3 B
PAC
Claims
$800 M
Medical $ 600M
Pharmacy $700M
Typical Care
Claims
$500 M
Medical $ 100M
Pharmacy $400M
Medical $ 500M
Pharmacy $300M
 For diabetes, PACs include
costs of diabetes-related
inpatient stays (e.g., DKA),
professional services during
admissions, all claims and
procedures with PAC codes,
and drugs used to treat
PACs.
For this example, $400 M
would be reserved for paying
bonuses for high quality, cost
saving care.
Source: Gosfield, A. “Making PROMETHEUS Payment® Rates Real: Ya’Gotta’ Start Somewhere”. June 2008.
http://www.prometheuspayment.org/publications/pdf/MakingItReal-Final.pdf
de Brantes, F. Payment Reform: A model for Chronic Care. Avalere. June 12 2009.
DKA: Diabetic Ketoacidosis
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Step 4: Incoparte Rewards for High Preformance
70%
Provider
Quality
30%
Referral
Quality
PAC
BONUS
Providers and hospitals submit
claims as in FFS.
The plans have a budget based
on ECRs. Providers that stay
under budget receive a PAC
bonus at the years end that is
based both their own quality and
that of their referral centers.
The quality assessments
includes established measures
patient experience and clinical
structure, processes and
outcomes.
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SUMMARY: ECR and Bonus Calculation
Payment Methodology
P
Cost
Core
Services
Geographic
Price Index and
Severity
Adjustment
+
10% Margin
+
A
70% based
on clinician
quality
C
30% based on
referral quality
=
Payment
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ECRs have been developed for diagnoses across settings.
Type of ECR
Trigger
Time Window
Chronic
Medical
Outpatient
Professional
One year from trigger
Acute Medical Inpatient Facility
3-day look-back;
30-day look-forward
Inpatient
Procedural
Inpatient Facility
30-day look-back;
180-day look-forward
Outpatient
Procedural
Outpatient
Facility/
Professional
30-day look-back;
180-day look-forward
Examples
Diabetes, CHF,
COPD, Asthma,
CAD, HTN
AMI, Pneumonia
Hip Replacement,
CABG, Bariatric
Surgery
Angioplasty, Lap
Cholecystectomy,
Hernia Surgery
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The Prometheus Payment Model is Currently in the Pilot
Phase
Rockford, IL
Springfield, PA
160 member companies 26,000
employees. Public-private coalition
ECOH
Crozer-Keystone, represents almost a
million lives
Covers large area between IL and WI
state line
Areas in Delaware County,
Pennsylvania, northern Delaware, and
western New Jersey
6 Chronic Medical ECRs:
Inpatient Procedural ECRs:
Diabetes
CHF
COPD
CAD
Asthma
HTN
Total Hip
Total Knee
de Brantes, F. Payment Reform: A model for Chronic Care. Avalere. (Presentation)June 12 2009.
ECOH: Employer’s Coalition on Health.
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Comparison of Prometheus Pilot Site Data with Database
$8,000
$7,000
Total PAC
Typical Pharmacy
$6,000
Typical Professional
$5,000
 PACs are significantly higher
in costs for pilot markets and
pharmaceutical cost are
much lower as well.
$4,000
$3,000
$2,000
$1,000
$0
 Prelim data shows
opportunity to reduce errors
and increase appropriate
pharmaceutical spending
Pilot
Database
Diabetes
Pilot
Database
COPD
 Opportunities exists to
minimize PACs and may
include increasing evidencebased pharmaceutical
spending.
de Brantes, F. Prometheus Summary. Avalere. (Presentation) Dec 2008.
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Comments on Prometheus
 “There is no more important issue in health care than the need to reform a
broken provider payment system ... In moving towards a bundled payment
system for distinct episodes of illness, the PROMETHEUS Payment model is
clearing a promising path forward.”
Andrew Webber, President and CEO
National Business Coalition on Health, Washington, D.C.
 “I've always been struck by how unfair most payment systems could be—that
they really don't do a good job of accounting for patient severity. PROMETHEUS
aims to bring clarity and fairness to the payment process, while increasing
quality and value of care.”
Keith Michl, M.D., Practicing Internist
Southwestern Vermont Medical Center, Manchester Center, Vt.
PROMETHEUS Payment Set to Test New Method of Paying Providers for High-Quality Health Care. Comments from
PROMETHEUS Board Members http://www.rwjf.org/pr/product.jsp?id=30231. Accessed June 22, 2009
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Future Directions and Implications
 Prometheus currently advises Health Partners of MN and MN Hospital
Association on developing ECRs and the State Legislature of Utah.
 Prometheus plans to double its number of conditions over the next year. The
success of the new payment system could lead to more widespread use of EOC
and more innovation in EOC project design.
 Currently ECRs are calculated based on average price for a class of drug and
physicians are not assumed to use the lowest price or generic effective drug.
 This is a single model of EOC payment and single demonstration, Medicare,
Geisinger of PA and a number of other health systems and payers are
experimenting with realigning incentives with quality based reimbursement.
 In its pilots, Prometheus has functioned essentially like FFS + P4P because
providers have been reluctant to accept risk of pure bundled payment. Payer
market penetration or experience with alternative payment methods may change
the prevailing dynamic.
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