PharmacoEconomics & Outcomes News 581 - 27 Jun 2009 Health care ‘warranties’ could pay for patients and providers Francois de Brantes, from the not-for-profit Bridges to Excellence organisation, and colleagues, suggest that introducing a ’warranty’ for health care could lead to benefits for patients and providers. They contend that introducing a system based on the PROMETHEUS payment model would lead to a de facto incorporation of a warranty into health care. The core component of the payment model is the evidenceinformed case rate (ECR), developed by clinical working groups. In practice, providers are paid a risk-adjusted global fee that covers all generally recommended services for a condition. However, a portion of the payment is only allocated based on the provider’s performance; the aim is to separate routine services from those services required due to potentially avoidable complaints (PACs). Half of the predicted PAC costs are added to the base fee, to compensate providers for avoidable complications and as an incentive to reduce them further; as the ECR always includes this allowance, the provider wins if the incidence of avoidable complications is reduced. Using a commercial insurance database, an ECR for acute myocardial infarction was modelled. It was found that profit margin actually increased slightly with severity of illness. In addition, there were strong negative correlations between the number of complications, and cost of each complication, and profit. "To be profitable under the new payment model, providers with average complication rates today would have to improve performance by one-third", concluded de Brantes and colleagues. de Brantes F, et al. Should health care come with a warranty? Health Affairs 28: 801108533 w678-w687, No. 4, Jul-Aug 2009

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PharmacoEconomics & Outcomes News 27 Jun 2009 No. 581

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