An article in Time points to a pilot healthcare program called Prometheus that seeks to cut costs by putting doctors on a budget. Set to launch in January of 2010, the radical model will be used to calculate insurance coverage for 80,000 workers in Rockford, Illinois, attempting to reverse the existing incentive-based system that drives up costs.

The article explains the current policy:

“Doctors and hospitals bill insurers for every individual service — every office visit, MRI or hour of operating-room time — a “fee for service” model that drives health-care inflation by rewarding providers who order potentially unnecessary tests, perform potentially unnecessary surgeries and even make mistakes. A hospital readmission caused by avoidable complications just means more billable expenses.”

By contrast, Prometheus utilizes open source software to determine costs based on the care and procedures a patient should receive as opposed to what they did receive – an important distinction. The benefits are twofold: patients are guaranteed a better level of treatment, and healthcare providers are rewarded or penalized accordingly. For example, a doctor that provides both satisfactory care and goes under budget could receive a bonus. In the event that procedures exceed expectations, the doctor would take a financial hit.

In theory, this plan goes a long way to ensure that the system remains honest, the reality is much more complicated. Not to mention that this program forces us to place a lot of faith in a set of equations. And perhaps most importantly, it brings into question the difference between doing what’s right for the patient versus what’s right for the bottom line. And while some estimates place the number of unnecessary procedures as high as 30%, just because doctors might be able to cut back on certain practices, doesn’t mean they should.

Needless to say, this points to the challenges of reforming a system that most agree is broken. Finding a means of holding everyone accountable, while maintaining an exceptional level of care will require compromise, innovation and improved efficiencies.