Pay for performance (healthcare)

Pay for performance in healthcare gives financial incentives to clinicians for better health outcomes. Clinical outcomes, such as longer survival, are too difficult to measure, so pay for performance systems usually measure process outcomes, such as measuring blood pressure, lowering blood pressure, or counseling patients to stop smoking.

Aaron E. Carroll, a professor of pediatrics who writes a column for the New York Times, said after reviewing the medical literature in 2014 that pay for performance in the U.S. and U.K. has brought "disappointingly mixed results." Sometimes even large incentives don't change the way doctors practice medicine. Sometimes incentives do change practice, but even when they do, clinical outcomes don't improve. Critics say that pay for performance is a technique borrowed from corporate management, where the main outcome of concern is profit. In medical practice, many important outcomes and processes, such as spending time with patients, can't be quantified.[1]

Also known as "P4P" or "value-based purchasing," this payment model rewards physicians, hospitals, medical groups, and other healthcare providers for meeting certain performance measures for quality and efficiency. It penalizes caregivers for poor outcomes, medical errors, or increased costs.

Studies in several large healthcare systems have shown modest improvements in specific outcomes, but these have been short-lived, and reduce performance in outcomes that were not measured. They also failed to save money.

Professional societies have given qualified approval to incentive programs, but express concern with the validity of quality indicators, patient and physician autonomy and privacy, and increased administrative burdens.

Preliminary studies and trends

Pay for performance systems link compensation to measures of work quality or goals. As of 2005, 75% of all U.S. companies connect at least part of an employee's pay to measures of performance,[2] and in healthcare, over 100 private and federal pilot programs are underway. Current methods of healthcare payment may actually reward less-safe care, since some insurance companies will not pay for new practices to reduce errors, while physicians and hospitals can bill for additional services that are needed when patients are injured by mistakes.[3] However, early studies showed little gain in quality for the money spent,[4] as well as evidence suggesting unintended consequences, like the avoidance of high-risk patients, when payment was linked to outcome improvements.[5][6]

The 2006 Institute of Medicine report Preventing Medication Errors recommended "incentives...so that profitability of hospitals, clinics, pharmacies, insurance companies, and manufacturers (are) aligned with patient safety goals;...(to) strengthen the business case for quality and safety."[7] A second Institute of Medicine report Rewarding Provider Performance: Aligning Incentives in Medicare (September 2006) stated "The existing systems do not reflect the relative value of health care services in important aspects of quality, such as clinical quality, patient-centeredness, and efficiency...nor recognize or reward care coordination...(in) prevention and the treatment of chronic conditions." The report recommends pay for performance programs as an "immediate opportunity" to align incentives for performance improvement.[8] However, significant limitations exist in current clinical information systems in use by hospitals and health care providers, which are often not designed to collect data valid for quality assessment.[9]

Commentary by physician organizations

In the United States, most professional medical societies have been nominally supportive of incentive programs to increase the quality of health care. However, these organizations also express concern over the choice and validity of measurements of improvement. The American Medical Association (AMA) has published principles for pay-for performance programs, with emphasis on voluntary participation, data accuracy, positive incentives and fostering the doctor-patient relationship,[10] and detailed guidelines for designing and implementing these programs.[11] Positions by other physician organizations question the validity of performance measures, and whether it will preserve an individual physician's clinical judgement, a patient's preferences, autonomy and privacy. They question whether it will lower costs, although it will increase administrative costs.

Implementation

United Kingdom

In the United Kingdom, the National Health Service (NHS) began a major pay for performance initiative in 2004, known as the Quality and Outcomes Framework (QOF).[18] General practitioners agreed to increases in existing income according to performance with respect to 146 quality indicators covering clinical care for 10 chronic diseases, organization of care, and patient experience. For example, family practitioners got points for clinically reviewing patients with asthma every 15 months. Unlike proposed quality incentive programs in the United States, funding for primary care was increased 20% over previous levels. This allowed practices to invest in extra staff and technology; 90% of general practitioners use the NHS Electronic Prescription Service, and up to 50% use electronic health records for the majority of clinical care.

A 2006 study found that most of the doctors actually did get most of the points, although some practices seemed to have gotten high scores by excluding patients with high-risk factors from their percentage targets. The 8,000 family practitioners included in the study had an increase in revenue by $40,000 by collecting nearly 97% of the points available.[19]

A 2014 study examined 1.8 million hospital charts, and found that the mortality in control hospitals fell more than mortality in the pay-for-performance hospitals. Short-term improvements were not maintained. There was some evidence that mortality was declining in the three conditions covered by the program, at the expense of other conditions not covered in the program.[20]

A 2015 population based study investigated the relationship between mortality and performance on the scheme across the whole of England. Although all-cause and cause-specific mortality rates declined over time, there was no significant relationship between practice performance on quality indicators and all-cause or cause-specific mortality rates in the practice locality. Higher mortality was associated with other well-known predictors: greater area deprivation, urban location, and higher proportion of a non-white population.[21]

United States

California

Responding to public backlash to managed care in the 1990s, California health care plans and physician groups developed a set of quality performance measures and public "report cards", emerging in 2001 as the California Pay for Performance Program, now the largest pay-for-performance program in the country.[22] Financial incentives based on utilization management were changed to those based on quality measures. Provider participation is voluntary, and physician organizations are accountable through public scorecards, and provided financial incentives by participating health plans based on their performance.

Medicare

In the United States, Medicare has various pay-for-performance ("P4P") initiatives in offices, clinics and hospitals, seeking to improve quality and avoid unnecessary health care costs.[23] The Centers for Medicare and Medicaid Services (CMS) has several demonstration projects underway offering compensation for improvements:

Negative incentives

As a disincentive, CMS has proposed eliminating payments for negative consequences of care that results in injury, illness or death. This rule, effective October 2008, would reduce payments for medical complications such as "never events" as defined by the National Quality Forum, including hospital infections.[28] Other private health payers are considering similar actions; the Leapfrog Group is exploring how to provide support to its members who are interested in ensuring that their employees do not get billed for such an event, and who do not wish to reimburse for these events themselves. Physician groups involved in the management of complications, such as the Infectious Diseases Society of America, have voiced objections to these proposals, observing that "some patients develop infections despite application of all evidence-based practices known to avoid infection", and that a punitive response may discourage further study and slow the dramatic improvements that have already been made.[29]

Multiple providers for complex disorders

Pay for performance programs often target patients with serious and complex illnesses; such patients commonly interact with multiple healthcare providers and facilities. However, pilot programs now underway focus on simple indicators such as improvement in lab values or use of emergency services, avoiding areas of complexity such as multiple complications or several treating specialists.[16] A 2007 study analyzing Medicare beneficiaries' healthcare visits showed that a median of two primary care physicians and five specialists provide care for a single patient.[30] The authors doubt that pay-for-performance systems can accurately attribute responsibility for the outcome of care for such patients. The American College of Physicians Ethics has expressed concern:[14]

Pay-for-performance initiatives that provide incentives for good performance on a few specific elements of a single disease or condition may lead to neglect of other, potentially more important elements of care for that condition or a comorbid condition. The elderly patient with multiple chronic conditions is especially vulnerable to this unwanted effect of powerful incentives.

Deselection, ethical issues

Present pay-for-performance systems measure performance based on specified clinical measurements, such as reductions in glycohemoglobin (HbA1c) for patients with diabetes.[31] Healthcare providers who are monitored by such limited criteria have a powerful incentive to deselect (dismiss or refuse to accept) patients whose outcome measures fall below the quality standard and therefore worsen the provider's assessment.[14] Patients with low health literacy, inadequate financial resources to afford expensive medications or treatments, and ethnic groups traditionally subject to healthcare inequities may also be deselected by providers seeking improved performance measures.[32]

Public reporting

In Minnesota, Minnesota Community Measurement ranks providers on multiple categories such as patient experience and total cost of care and provides public reporting online to inform consumers. The service is designed to help purchasers make better decisions when seeking care and to provide feedback to providers for areas that need improvement.[33]

References

  1. ↑ Carroll, Aaron E. (28 July 2014). "The New Health Care: The Problem With 'Pay for Performance' in Medicine". New York Times. Retrieved 22 August 2014.
  2. ↑ Webb, Natalie J., Blandin, James S. (2006). "Evaluating executive performance in the public sector" (PDF) 7 (1). International Public Management Network.
  3. ↑ The Commonwealth Fund: Five Years After "To Err Is Human": What Have We Learned?
  4. ↑ Meredith B. Rosenthal, PhD; Richard G. Frank, PhD; Zhonghe Li, MA; Arnold M. Epstein, MD, MA (2005). "Early Experience With Pay-for-Performance: From Concept to Practice" (abstract). JAMA 294 (14): 1788–1793. doi:10.1001/jama.294.14.1788. PMID 16219882. Retrieved 2006-07-08.
  5. ↑ M .B. Rosenthal and R. G. Frank (2006). "What Is the Empirical Basis for Paying for Quality in Health Care?". Medical Care Research and Review 63 (2): 135–57. doi:10.1177/1077558705285291. PMID 16595409. Retrieved 2006-07-08.
  6. ↑ US Congress, House Committee on Employer-Employee Relations: Pay For Performance Measures and Other Trends in Employer Sponsored Healthcare, Testimony of Meredith B. Rosenthal, PhD PDF (31.5 KiB) May 17, 2005
  7. ↑ The Institute of Medicine (2006). "Preventing Medication Errors". The National Academies Press. Retrieved 2006-07-21.
  8. ↑ The Institute of Medicine (2006). "Rewarding Provider Performance: Aligning Incentives in Medicare". The National Academies Press. Retrieved 2007-04-15.
  9. ↑ Deloitt Center for Health Solutions: Paying For Performance, A Call for Quality Health Care (Retrieved 2013-10-30)
  10. ↑ American Medical Association: Principles for Pay-For-Performance Programs (Retrieved 2007-04-15)
  11. ↑ American Medical Association: Guidelines for Pay-For-Performance Programs (Retrieved 2007-04-15)
  12. ↑ American Academy of Family Physicians: Pay-For-Performance (Retrieved 2007-04-15)
  13. ↑ American College of Physicians: Quality Improvement, Pay-for- Performance and Practice Redesign (Retrieved 2007-04-15)
  14. 1 2 3 Lois Snyder, JD & Richard L. Neubauer, MD, L; Neubauer, RL; American College of Physicians Ethics, Professionalism and Human Rights Committee (4 December 2007). "Pay-for-Performance Principles That Promote Patient-Centered Care: An Ethics Manifesto" (abstract). Annals of Internal Medicine 147 (11): 792–794. doi:10.7326/0003-4819-147-11-200712040-00011. PMID 18056664. Retrieved 2008-03-31.
  15. ↑ American Geriatrics Society: What, exactly, is AGS' position on P4P? (Retrieved 2007-04-15)
  16. 1 2 American Academy of Neurology, Federal Legislation Position Statements: Pay-For-Performance (Retrieved 2007-04-15)
  17. ↑ The Endocrine Society position paper (July 19, 2006): Pay-For-Performance (Retrieved 2007-04-15)
  18. ↑ National Health Service: Quality and Outcomes Framework data Retrieved July 8, 2006
  19. ↑ Tim Doran, M.P.H., Catherine Fullwood, Ph.D., Hugh Gravelle, Ph.D., David Reeves, Ph.D., Evangelos Kontopantelis, Ph.D., Urara Hiroeh, Ph.D., and Martin Roland, D.M. (2006). "Pay-for-Performance Programs in Family Practices in the United Kingdom". The New England Journal of Medicine 355 (4): 375–384. doi:10.1056/NEJMsa055505. PMID 16870916. Retrieved 2006-08-02.
  20. ↑ Søren Rud Kristensen, Ph.D., Rachel Meacock, M.Sc., Alex J. Turner, M.Sc., Ruth Boaden, Ph.D., Ruth McDonald, Ph.D., Martin Roland, D.M., and Matthew Sutton, Ph.D. (2014). "Long-Term Effect of Hospital Pay for Performance on Mortality in England". The New England Journal of Medicine 371 (6): 540–548. doi:10.1056/NEJMoa1400962. PMID 25099578. Retrieved 2014-08-12.
  21. ↑ Evangelos Kontopantelis, David A Springate, Mark Ashworth, Roger T Webb, Iain Buchan and Tim Doran (2015). "Investigating the relationship between quality of primary care and premature mortality in England: a spatial whole-population study". The British Medical Journal 350: h904. doi:10.1136/bmj.h904. PMID 25733592. Retrieved 2016-04-13.
  22. ↑ Integrated Healthcare Association (February 2006): Advancing Quality Through Collaboration: The California Pay for Performance Program (Retrieved 2007-04-15)
  23. ↑ Medicare: "Pay For Performance (P4P) Initiatives"
  24. ↑ Centers for Medicare and Medicaid Services: Medicare Begins Performance-Based Payments For Physician Groups (Retrieved 2007-04-15)
  25. ↑ Centers for Medicare and Medicaid Services, Medicare Physician Group Practice Demonstration: First Evaluation Report to Congress (Retrieved 2007-04-15)
  26. ↑ Lindenauer PK, et al. (2007). "Public Reporting and Pay for Performance in Hospital Quality Improvement" (PDF). The New England Journal of Medicine 356 (3): 486–496. doi:10.1056/NEJMsa064964. PMID 17259444. Retrieved 2007-01-29.
  27. ↑ Arnold M. Epstein, MD (2007). "Pay for Performance at the Tipping Point" (PDF). The New England Journal of Medicine 356 (3): 515–517. doi:10.1056/NEJMe078002. PMID 17259445. Retrieved 2007-01-29.
  28. ↑ Centers for Medicare and Medicaid Services: Eliminating Serious, Costly and Preventable Medical Errors (May 18, 2006)
  29. ↑ IDSA, SHEA and APIC: Comment on CMS Inpatient PPS Proposed Rule 1488P: Healthcare-associated infection (June 13, 2006)
  30. ↑ Pham HH, et al. (2007-03-15). "Care patterns in Medicare and their implications for pay for performance". The New England Journal of Medicine 356 (11): 1130–9. doi:10.1056/NEJMsa063979. PMID 17360991. Retrieved 2007-03-16.
  31. ↑ Steven B. Leichter,MD,FACP,FACE, S. B. (2006). "Pay-for-Performance Contracts in Diabetes Care" (PDF). Clinical Diabetes 24 (2): 56–59. doi:10.2337/diaclin.24.2.56. Retrieved 2008-03-31.
  32. ↑ Cannon, Michael F. (2006). Pay for Performance: Is Medicare a Good Candidate? (PDF). The Cato Institute. Retrieved 2008-04-02..
  33. ↑ "Statewide Measurement and Reporting System Stimulates Quality Improvement in Targeted Clinical Areas, Becomes Standard for Local and National Pay-for-Performance Programs". Agency for Healthcare Research and Quality. 2013-11-20. Retrieved 2014-01-29.

See also

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