Evaluation of Demonstration Projects
8. Paulus, R. A., Davis, K., and Steele, G. D. (2008) Continuous Innovation in Health Care:
Implications of the Geisinger Experience. Health Affairs, 27:1235-1245.
Summary: Geisinger created the ProvenCare model for coronary artery bypass graft (CABG).
As part of the model, the organization established best practices across the episode of care and
developed a risk-based price for care, which included hospital costs and subsequent
readmissions. Through ProvenCare, Geisinger was able to increase the percentage of CABG
patients receiving recommended care, as measured by the forty measures, to 100 percent.
9. Cromwell, J., Dayhoff, D. A., McCall, N. T., Subramanian, S., Freitas, R. C., and Hart, R. J.
(1998) Medicare Participating Heart Bypass Center Demonstration: Final Report. Health
Economic Research, Inc.
Summary: In 1988, the Health Care Financing Administration negotiated contracts with four
hospitals to pay them bundled payments for heart bypass with or without catheterization. The
demonstration project lasted from 1991 through 1996, including a two year extension. The
evaluation found that the demonstration saved Medicare $42.3 million on bypass patients and
saved beneficiaries $7.9 million in Part B coinsurance payments. Participating hospitals also
saved on treating bypass patients. Some of the cost savings were a result of generic drug
substitutions reported by pharmacists. The range of hospital savings was between $1.7million
and $15 million. Patients discharged from participating hospitals also had on average, an 8
percent decline in mortality rates. The evaluators also noted that patients received appropriate
care at participating hospitals.
Other Published Literature
10. Mechanic, R. and Altman S. (2010) Medicare’s Opportunity to Encourage Innovation in
Health Care Delivery. The New England Journal of Medicine, 362( 9): 772-774.
Summary: The authors of the article evaluate the newly-mandated Center for Medicare and
Medicaid Innovation (CMI) and how the entity will facilitate the implementation of key health
delivery models. First, the CMI is authorized to run pilot programs rather than demonstration
projects, which can be hampered from widespread dissemination by congressional approval.
The CMI would also have the authority to decide on which proposals to pursue and can choose
to expand pilots that are not budget neutral. The CMI would play an essential role in health care
payment reform, especially in the piloting and implementation of new payment approaches.
11. Pham, H. H., Ginsburg, P. B., Lake, T. K., and Maxfield, M. M. (2010) Episode-Based
Payments: Charting a Course for Health Care Payment Reform. National Institute for Health
Care Reform, Policy Analysis No. 1.
Summary: The authors discuss key design issues related to implementing an episode-based
payment system, including defining episodes of care, establishing payment rates, identifying
