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I live on a budget. When I overspend in February, I have to underspend in March. Last month I didn't use my clothing budget at all and so this month I got to double it (and got a fantastic new dress!). What would happen if your physician were put on a similar budget: if her treatment of your condition surpassed the "average" cost, she'd pay out of pocket; if she didn't spend every penny allotted, she could pocket the difference.

A great article on Time.com (Cutting Health-Care Costs By Putting Doctors on A Budget) shares the news of a pilot program just like this that is in the works.

Prometheus (which is both named for the Greek god of forethought and the super-long acronym "provider payment reform for outcomes, margins, evidence transparency, hassle reduction, excellence, understandability and sustainability) is going to be used to calculate insurance coverage for 80,000 Illinois workers by January of next year.

Currently the United States runs on a "fee for service" (FFS) health care model: insurance pays a specific fee for each service that is provided to a patient. This allows for physicians to add service after service in order to boost their fee income. This ends up costing insurance companies - and therefore patients - more than non-FFS providing nations. According to the Time.com article, "Prometheus ... calculates compensation for hospitals and doctors based not on the specific treatments a patient receives but on the care a patient should receive "per episode.""

The incentive lies in preventing illness, or treating it with more succinct and through methods than simply letting the illness or disease travel its course. If a doctor can educate an obese patient on the pitfalls of high cholesterol and rollercoaster blood sugar levels, the prevention of cardiac arrest or diabetes is going to save both the patient and the physician money!

Like Time.com says "it's a simple idea that makes sense in theory." There are so many little facets of the program that have yet to be fleshed out, we don't really know how it will work out in the end. In an society of excess and overuse of everything from toilet paper to physician's services, the Prometheus program will be an interesting segue into the new era of United States health care.

Tags: consumer driven healthcare, health insurance, healthcare

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amanda Comment by amanda on July 7, 2009 at 12:02pm
This is a very interesting concept, Sarah. It would certainly push doctors to take every precaution and care toward providing treatments and getting things correct ASAP. Money is a powerful influence. But hmm...

Aside from potentially skimping on treatments, like the article mentioned as a possibly major flaw - I wondered something else. Since so many treatments require unique care (especially if you have multiple illnesses or health-risks) --would patients be allotted the entire spectrum of possible treatments/tests? (aka - how much would the "average cost" allow for?)

I suppose there would have to be a very strict and accurate classification for what would go in to an "average-costing" treatment. This seems tricky since there are so many variables. Just as smokers are classified differently for life insurance--would people with certain health-risks or prior afflictions be put in another category than someone who is healthy or not? The article's example is that: "a slightly overweight 60-year-old heart-failure patient who has coronary-artery disease and acid-reflux disease, according to the Prometheus algorithm, should cost $20,750 a year."

I wonder exactly what goes into creating this algorithm and how many aspects would factor in to the equation. The example explains the patient as "slightly overweight" - is this BMI-related? I worry that, if the algorithm isn't very very (almost unreasonably) specific, extreme cases could skew the results making the "average cost" of a treatment more expensive. I guess that would depend on the particular treatment and what the ailment/illness was. I'd be interested in knowing what goes into arriving at the Prometheus number. Treatments that a patient "should" receive is potentially tricky ground when you consider how different each patient is from the next.

I'm interested in seeing where this goes. I'm not super-informed about this sort of thing - but I think that maybe they could start by applying this to treatments that are very universal and common and start there? ie: broken bones, physicals, flu, pregnancy/births, etc. This might confuse the system to only do Prometheus for some (maybe it's an all-or-nothing switch?) All I know is - if doctors go over the allotted costs for simple procedures (that they should know like the back of their hand) - I think they definitely should have to pay.
Marie Comment by Marie on July 7, 2009 at 11:54am
Wow. All I can say to this is "wow".

Ok, that's actually not all I can say about it, I'm about to say a lot more.

So, I've been trying to keep track of the goings on with Health Care Reform, in part because I'm a bit of a policy nerd and I find this stuff interesting, but mostly because I think it is a very, very important thing. I am not sure one can work even tangentially in the health-field, and not be touched by the need and the plight of the un, or under-insured. Having gone without health insurance for a whole three months at the extraordinarily healthy age of 22, I simply cannot imagine the stress and fear that plagues those who continue to live without health insurance.

That being said, I have quite a few concerns with this particular idea.
1) How much are we really saving here, if we're paying doctors the difference for going under the average cost? I didn't see any numbers in the Time article (but I honestly might have missed them). Theoretically, all the money we save by them paying us for going over, could be spent shelling out for the folks who went under.
2) Does this put patients at risk? I'll take the situation at face value, that my doctor is not going to suddenly turn into some maniacal penny-pincher who won't treat me at all--but what happens to patients whose cases are not "average"? In some ways, it seems like we could be creating a situation where patients get turned away, or cannot see the best doctor, or the doctor they want, because that doctor went "over" in February, and now can't afford to treat patients who may really need more tests and attention.

I'm particularly wary of that because it seems to be something that is already happening with insurance companies--people with previous conditions, or those considered "at risk" are getting turned away. The bottom line in health care is always going to favor the patients who aren't sick.

That being said, I am all in favor of a shift in the way we practice medicine that focuses on the preventative, and the cognitive. If you haven't ready Atul Gawande's "The Cost Conundrum" from the New Yorker last month, I strongly recommend it. It's a pretty amazing picture of the role our doctors have played in the rising cost of healthcare.

But even Gawande, himself a surgeon, and obviously familiar with these issues, admits that he insisted his son receive additional testing (despite the cost), after a trip to the ER. And who can blame him? Who wouldn't do the same thing for their own family members?

I think this speaks to a lack of trust - and that will be much harder to repair. I am not sure we really believe that "more" healthcare doesn't actually mean "better" healthcare. But as educated patients and advocates, we will need to find a balance: when do we push, and ask for more, and when do we accept that our doctor can still provide excellent care, while thinking about the bottom line?

Now I have perhaps said more than I intended, but, I do also want to recommend Ezra Klein's blog on the Washington Post for anyone who is interested in keeping up with the latest news in healthcare reform. He also writes about some other issues, but it's the most clearly written and engaging blog I've found on the subject to date. Plus there are often charts and graphs. Who doesn't love those?

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