Prometheus Payment Model: Application to Hip and Knee Replacement Surgery

The Prometheus Payment Model offers a potential solution to the failings of the current fee-for-service system and various forms of capitation. At the core of the Prometheus model are evidence-informed case rates (ECRs), which include a bundle of typical services that are informed by evidence and/or expert opinion as well as empirical data analysis, payment based on the severity of patients, and allowances for potentially avoidable complications (PACs) and other provider-specific variations in payer costs. We outline the methods and findings of the hip and knee arthroplasty ECRs with an emphasis on PACs. Of the 2076 commercially insured patients undergoing hip arthroplasty in our study, PAC costs totaled $7.8 million (14% of total costs; n = 699 index PAC stays). Similarly, PAC costs were $12.7 million (14% of total costs; n = 897 index PAC stays) for 3403 patients undergoing knee arthroplasty. By holding the providers clinically and financially responsible for PACs, and by segmenting and quantifying the type of PACs generated during and after the procedure, the Prometheus model creates an opportunity for providers to focus on the reduction of PACs, including readmissions, making the data actionable and turn the waste related to PAC costs into potential savings.