Bundled Payments


P4P payment systems continue to evolve as implementation widens. The most widely publicized next generation of P4P is the Prometheus Payment model. Prometheus reimburses based on evidence-based case rates (ECRs) that include a lump sum for total cost of care based on the evidence recommended care (38). Each ECR has a built-in report card, which allows for P4P to be taken into account. Other programs include Geisinger (Pennsylvania, 112) and Carol Complete (Minnesota). Rosenthal (218) provides a broad overview of these emerging payment systems. More programs that use ECRs are sure to surface in the near future. The primary drawback (321) to bundled payments thus far has been a limited sample size and incomplete data to properly determine "evidence-based" payment rates.


Prometheus: http://www.prometheuspayment.org/

Geisinger: http://www.geisinger.org/


Bundled Payments Literature


(38) Terry K. Can this payment model work? Medical Economics. November 17, 2006

PMID: 17186875


  • Report outlines new performance based reimbursement model called Prometheus Payment.
  • Prometheus reimburses on the basis of negotiated evidence-based case rates (ECRs) supplemented by bonus payments for quality and efficiency.
  • For Prometheus “to work well, patients would need a medical home and rely on that provider to take them through the system.”

Significance to Literature:

Introduces evidence-based case rates and Prometheus Payment system.


(112) Lee TH. Pay for Performance, Version 2.0? NEJM. 2007: 357(6) 531-533.

PMID: 17687128


  • The Geisinger Health System’s program established a 40 key process protocol to follow in order to get paid a lump sum for 90 days of care for an elective CABG.
  • The program has been successful: better outcomes, lower overall costs.
  • This has others wondering if Gesinger’s new approach could be expanded to other procedures.

Significance to Literature:

The Geisinger case rate approach is a form of P4P similar to Prometheus.


Key Article

(218) Rosenthal MB. Beyond Pay for Performance—Emerging Models of Provider-Payment Reform. NEJM. 2008: 359(12) 1197-1200.

PMID: 18799554


  • Many P4P programs are changing in scope, performance measures, and magnitude of funding in order to improve efficacy.
  • New models often account for cost efficiency.
  • Models also trend towards global condition based payments such as AMI, DM2, knee replacement (Prometheus, Geisinger) developed on the basis of clinical standards for appropriate care.
  • “Need to distinguish random variation in outcomes and patient mix from variations in practices and avoidable complications.”

Significance to Literature:

Reviews several new models that combine novel reimbursement strategies with built-in quality improvement programs.


(321) Robinson JC, Williams T, Yanagihara D. Measurement Of And Reward For Efficiency In California's Pay-For-Performance Program: How the Integrated Healthcare Association discovered the problems of using "episodes of care" as the basis for physician performance rewards. Health Affairs. 2009: 28(5) 1438-1447.

PMID: 19738261


  • Outlines the history of P4P in California.
  • Discusses episodes of care reimbursement system in detail while outlining the primary problems including: small numbers, attribution, and inconsistent benefit design.
  • Describes similar payment systems including: bundled payments and clinical process measurement.

Significance to Literature:

"Despite high hopes, performance reward based on episodes of care has proved to be limited by problems of sample size and data completeness."


(447) Satin DJ, Miles J (2009). "Performance-based bundled payments: potential benefits and burdens". Minn Med. 92 (10): 33–5.

PMID: 19916270

PDF icon mn_med_bundles_special_report_-_satin.pdf


(450) Wang CJ et al. Association of a Bundled-Payment Program With Cost and Outcomes in Full-Cycle Breast Cancer Care. JAMA Oncol. 2016 Oct 20. doi: 10.1001/jamaoncol.2016.4549. [Epub ahead of print]

PMID: 27768180


  • Examination of the effect of a bundled-payment P4P program breast cancer program in Taiwan compared to a fee-for-service (FFS) program with regards to quality indicator adherence, costs, and outcomes
    • 17,940 newly diagnosed women with a documented first treatment from 2004-2008 were selected and followed-up for 5 years (through 2013)
  • Results included:
    • Women were greater than 8% more likely to have 100% adherence to quality indicators in the P4P group
      • Greatest adherence improvement was seen in the following indicators: cytologic or histologic confirmation before definitive surgery, axillary node dissection with 10 or more axillary lymph nodes for patients with invasive cancer, and radiotherapy for invasive cancer after breast conservation surgery
    • 5-year event-free survival (defined as the absence of recurrence 18 months after initial treatment) was 84.48% for the P4P group compared to 80.88% for the FFS group in breast cancers stage 0-III (stage IV not included in survival analysis)
      • No significant difference was seen in 5-year overall survival
    • Costs were originally higher for P4P but remained steady, whereas FFS payments increased over the study period and eventually surpassed the cost of even the highest incentive (7%) P4P program

Significance to Literature:

Evidence from Taiwan that a combined P4P/bundled payment program can improve quality indicator adherence, 5-year event-free survival for non-stage IV breast cancer, and potentially contain costs compared to FFS.