Program Oriented Payment

Success or failure of a POP program is rooted in good design. Programs should have intermediate goals that are achievable, create real quality improvement, and provide shared savings. Most desirable are programs that implement best practices as well as adapt the unique aspects of an individual community. Although a design may be optimal, it is the local community where success or failure is ultimately determined.

A successful design requires four distinct design team roles:

Subject matter expert (SME): This role requires clinical expertise specific to the condition or problem, and knowledge of the latest literature and science surrounding the subject. These qualities provide the scientific basis for a positive outcome. The SME should be a local or regional specialist.
Payment system expert: POP is a unique payment system and is new to those involved in finance because it is configured using clinical information. Fulfillment of this role requires translating the cumulative products of the other three roles into a payment program. Primarily, and especially in the early stages of implementation, this should be a PH Tech team member.
Health system expert: Since the condition being addressed exists within a local health system context, the costs and the relationships that exist locally are better understood from the local system perspective. A local or regional medical director is the choice for this role.
Participating providers: A program’s success has a high dependency upon the local provider community supporting it. Obviously, this is a group role consisting of subscribing local providers.

POP programs are based on national standards adapted to local reality in order to improve the likelihood of success. The supporting technology and its consistent configuration mechanism provide both portability to other environments and apples to apples comparison of results.

A new accountability

By Michael Rohwer MD

Historically, useful healthcare accountability is difficult to achieve. Clinical accountability is difficult because of condition complexity and the inter-related nature of conditions and outcomes. Financial accountability frequently uses actuarial methods that obscure important detail. As a result, useful accountability does not exist.

For most business transactions, a known amount is paid to purchase a defined product or service. Cost is known. Results can easily be determined. That inadequate accountability exists for purchasers is common knowledge. Less well known is that nothing better exists for payers and providers. Payment is not based on results because implementable and reproducible measures of outcome, up until now, have not existed

Program Oriented Payment (POP) first narrows the context of what to measure by describing a condition. Then, the new claim payment technology (a POP derived innovation) is programmed using a clinical narrative description. A single disease might have several programs, each one having a different clinical description describing a special consideration or severity. In POP program configuration terminology, this is the Patient Enrollment Formula.

Using the same POP program condition’s context, a formula is created that defines how to allocate the condition’s treatment cost. This formula provides a consistent way to attribute costs to the condition. It is applicable everywhere the context is used and portable to other communities and populations. It can compare historical performance to current performance or community to community. Running the same formula during payment operations provides the program manager with condition-accountable expenditures in real-time. This creates a consistent and well-defined financial accountability around the condition. In POP program configuration terminology, this is the Cost Formula.

Each condition has a defined intermediate goal for the patient. This goal must be attainable by the program’s team of providers. The goal is the first factor in determining the goal-based supplementary payment. The ability to meet this goal creates clinical accountability. As the financial accountability described above, it is used to adjudicate claims in real-time. In POP program configuration terminology, the intermediate goal is the Patient Goal Formula.

Using POP, we create both financial and clinical accountability. Neither exists currently in forms that can be used to manage cost or quality. Accountability for the condition’s overall care is developed by creating multiple programs. Those that are most important from a cost or quality point of view are addressed first. In this way, big picture accountability is immediately realized. More importantly, because it is based on a consistent technology and method, dynamic processes capable of implementing change are put in motion, with the realistic possibility of sustainability.