GlobalPRIME™ • the mpa approach to healthcare payment reform
Introduction
MPA is pleased to introduce the GlobalPRIME™ Payment System, a healthcare payment system that supports a risk-adjusted global fee for warrantied care of a clinical episode. GlobalPRIME™ offers strong financial incentives for quality outcomes and economic stewardship by associating payment with a complete episode of care, with patient risk, and with a warranty against adverse outcomes.
In the GlobalPRIME™ Payment System, providers agree to receive a single payment for treatment of a clinical episode and any associated adverse events that may occur. Payment is adjusted based on patient risk at the beginning of an episode so that providers receive more money for treating sicker patients.
Payers no longer need to micro-manage the provision of health care. The global fee structure penalizes providers for over-utilization, and the warranty against associated adverse events protects patients against under-utilization. Therefore, providers have a strong financial incentive to improve efficiency without sacrificing quality of care.
Providers also receive financial incentives for improving quality of care. Providers accept financial responsibility for adverse events in return for a warranty payment. Because the warranty payment is built into the global fee, reducing the number or severity of adverse events can directly improve a provider’s bottom line.
In general terms, GlobalPRIME™ resembles the payment approach recently adopted by Geisinger for the care of CABG patients and lauded in the national press. However, unlike the Geisinger model, the warranty explicitly recognizes the costs of adverse outcomes. In addition, base payments and warranties are increased based on patient risk to reflect the increased costs of caring for riskier patients. A “stop-loss” provision also is established to protect providers from excessive costs associated with catastrophic events.
GlobalPRIME™ uses a Base Payment, or price to care for the lowest risk episode of care, as the starting point for calculating the payment that a provider receives. The Base Payment is determined by payers and providers and accepted as addendums to their current rate agreements. When a patient presents with an episode, GlobalPRIME™ automatically performs the necessary risk adjustments, determines the appropriate warranty payment, and calculates the final GlobalPRIME™ Payment for that patient.
GlobalPRIME™ applies to the full range of medical care, from routine and preventive care to the management of complex clinical conditions. While prototypes of routine and preventive care and diabetes have been developed as a proof of concept, the initial roll out focuses on high-cost, high-volume inpatient surgical procedures. Modules will be available for more than 25 of these procedures, representing over $70 billion nationally in healthcare costs. Based on 2005 HCUP data, national adoption of currently available modules would result in estimated annual cost savings in excess of $3.5 billion.
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