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Pay-for-performance: too much of a good thing? A conversation with Martin Roland. Interview by Robert Galvin.

As the United States moves down the road of pay-for-performance (P4P), concerns about unintended consequences are foremost in the minds of policymakers. Initial results from the world's most ambitious P4P program, the United Kingdom's Quality and Outcomes Framework (QOF), indicate that while quality improvements exceeded expectations, so too did the amount of funds paid out, straining the National Health Service (NHS) budget. Martin Roland, one of the leading U.K. health services researchers and an adviser to the QOF, gives his views on what went right and what went wrong, and he offers his advice to the United States about using financial incentives to improve quality.

Humans↗

New P4P program uses established measures.

Leapfrog has designed its program to reward improvers as well as best performers. Key areas represent approximately 33% of admissions and 20% of commercial payers' inpatient expenditures. Local market conditions, employer groups, and health plans will dictate incentive structures.

Benchmarking↗

Impact of financial incentives on documented immunization rates in the inner city: results of a randomized controlled trial.

OBJECTIVE: This study determined the effect of 2 financial incentives---bonus and enhanced fee-for-service---on documented immunization rates during a second period of observation. METHODS: Incentives were given to 57 randomly selected inner-city physicians 4 times at 4-month intervals based on the performance of 50 randomly selected children. Coverage from linked records from all sources was determined for a subsample of children within physician offices. RESULTS: Up-to-date coverage rates documented in the charts increased significantly for children in the bonus group (49.7% to 55.6%; P <.05) and the enhanced fee-for-service group (50.8% to 58.2%; P <.01) compared with the control group. The number of immunizations given by these physicians did not change significantly, although the number of immunizations given by others and documented by physicians in the bonus group did increase (P <.05). Up-to-date coverage for all groups increased from 20 to 40 percentage points when immunizations from physician charts were combined with other sources. CONCLUSIONS: Both financial incentives produced a significant increase in coverage levels. Increases were primarily due to better documentation not to better immunizing practices. The financial incentives appeared to provide motivation to physicians but were not sufficient to overcome entrenched behavior patterns. However, true immunization coverage was substantially higher than that documented in the charts.

Child, Preschool↗

Rewarding medicine: good doctors and good behavior.

Many patients think that there are shortcomings in the ethical dimensions of patient care, and research supports their view. In this issue of Annals, Erde suggests that physicians' incomes should depend on patients' assessments of their ethical behavior in much the same way that waiters' incomes depend on patrons' tips. Although Erde's solution is satiric, the problem is a serious one. The experiences and perspectives of patients regarding their own illness are undervalued by physicians. A truly patient-centered care demands that physicians elicit, understand, and respond to patients' perspectives. Tying physicians' pay to measurements of patient satisfaction is unlikely to dramatically improve the ethical quality of patient care as long as attention to the patient's perspective is seen as peripheral to "good medical care." Rather than relying on a single, easy "fix," we must re-examine all of professional development and practice. We need to choose persons for medical careers who will find patient-centered care rewarding; we need to provide such persons with training and socialization that underscores the value of personalized medicine; and we need to build institutions and systems that facilitate and reinforce patient-centered practice. The best ways to achieve these objectives are as yet unclear, but if we, as physicians, are offended by Erde's "modest proposal," then we must respond by proposing and implementing our own ideas about how patient care can become more humane.

Beneficence↗

Measuring the effects of managed care on physicians' perceptions of their personal financial incentives.

Using data from the 1997 Resurvey of Young Physicians (N = 1,549), this study examines whether several measures of physicians' contractual arrangements with health plans are associated with their perceptions of overall financial incentives to either decrease or increase the volume of services to patients. Results indicate the following factors were significantly associated with an increased likelihood of reporting an incentive to decrease services: a gatekeeper arrangement with a compensation incentive; the perception of a high risk of plan deselection for physicians with high costs; the perception that referrals received depended on the costs of care provided; communication prohibiting or discouraging the disclosure to patients of the physician's financial relationship with the health plan; receiving capitation payments from at least one plan; and employment in a health maintenance organization. Being compensated on a fee-for-service basis or receiving a salary with incentive or bonus provisions (compared to straight salary) were associated with an increased likelihood of reporting an incentive to increase services to patients. Physicians' overall methods of compensation had a relatively small impact on their perceived financial incentives compared to other statistically significant factors. Our findings suggest that physicians' self-reported, overall personal financial incentives within their practices are a valid summary measure of the heterogeneous mix of specific financial arrangements faced by most physicians.

Adult↗

The dark side of P4P.

Examine the pitfalls of pay for performance and learn why some physicians and others are deeply concerned about the idea of incentive pay and fear it will have a negative impact on patient care.

American Medical Association↗

Can money buy quality? Physician response to pay for performance.

While pay for performance (P4P) has created a nationwide buzz among health plans, physicians and hospitals, most P4P initiatives are still on the drawing board, according to findings from the Center for Studying Health System Change's (HSC) 2005 site visits to 12 nationally representative communities. HSC focused on performance-based payment for physicians, finding that only two HSC communities-Orange County, Calif., and Boston-have significant physician P4P programs. In the other 10 communities, where almost no physicians have received quality-related payments to date, physician attitudes about P4P ranged from skeptical to hostile. P4P, a concept best suited to larger physician groups, may be difficult to implement in markets dominated by small physician practices. In spite of substantial barriers to initiating performance-related payment for physicians, most large health plans and Medicare are planning P4P programs.

Boston↗

Pay for performance in emergency medicine.

One of the latest market-based solutions to the rising costs and quality gaps in health care is pay for performance. Pay for performance is the use of financial incentives to promote the delivery of designated standards of care. Pay for performance represents a dramatic change in the reimbursement of providers, from fixed rates or fees, to variable compensation based on the quality of care. This article serves as an introduction to pay for performance. I discuss the goals and structure of pay for performance plans and their limitations and potential consequences in the health care arena. A particular focus is provided on pay-for-performance initiatives affecting the emergency department either directly by contracting at the group level or indirectly through hospital reward programs. I also provide a strategy to guide constructive engagement by emergency physicians in the pay-for-performance movement.

Emergency Medicine↗