The PROMETHEUS Bundled Payment Experiment

Slow Start Shows Problems in Implementing New Payment Models

Published in: Health Affairs, v. 30, no. 11, Nov. 2011, p. 2116-2124

Posted on RAND.org on October 31, 2011

by Peter S. Hussey, M. Susan Ridgely, Meredith B. Rosenthal

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Research Questions

  1. What experiences did pilot sites have in implementing the PROMETHEUS bundled payment model?
  2. How much implementation progress has occurred three years into the pilot?
  3. What barriers to implementation have pilot sites encountered?

Fee-for-service payment is blamed for many of the problems observed in the US health care system. One of the leading alternative payment models proposed in the Affordable Care Act of 2010 is bundled payment, which provides payment for all of the care a patient needs over the course of a defined clinical episode, instead of paying for each discrete service. We evaluated the initial "road test" of PROMETHEUS Payment, one of several bundled payment pilot projects. The project has faced substantial implementation challenges, and none of the three pilot sites had executed contracts or made bundled payments as of May 2011. The pilots have taken longer to set up than expected, primarily because of the complexity of the payment model and the fact that it builds on the existing fee-for-service payment system and other complexities of health care. Participants continue to see promise and value in the bundled payment model, but the pilot results suggest that the desired benefits of this and other payment reforms may take time and considerable effort to materialize.

Key Findings

  • Pilot sites implementing the PROMETHEUS bundled payment model encountered implementation challenges.
  • Three years into the project, none of the pilot sites had executed any contracts or made any bundled payments.
  • The delays occurred mainly because of the payment model's complexity.
  • Despite the slow progress, participants expressed continued belief in the potential of bundled payments to reduce costs.
Access further information on this document at Health Affairs

This article was published outside of RAND. The full text of the article can be found at the link above.

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