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PubMed1982

Cost-based reimbursement and prospective payment: reassessing the incentives.

Prospective payment is distinguished from the imposition of a regulatory ceiling on hospital costs. While a regulatory ceiling could potentially be effective in controlling expenditure growth, its success depends upon the political climate. Prospective payment, as a distinct financial policy, offers little cost-containment potential. It is appropriately evaluated in term of its effects on the distribution of risk between providers and third parties and on the trade-off between investment and current consumption.

Cost Control↗
PubMed2005

Early experience with pay-for-performance: from concept to practice.

CONTEXT: The adoption of pay-for-performance mechanisms for quality improvement is growing rapidly. Although there is intense interest in and optimism about pay-for-performance programs, there is little published research on pay-for-performance in health care. OBJECTIVE: To evaluate the impact of a prototypical physician pay-for-performance program on quality of care. DESIGN, SETTING, AND PARTICIPANTS: We evaluated a natural experiment with pay-for-performance using administrative reports of physician group quality from a large health plan for an intervention group (California physician groups) and a contemporaneous comparison group (Pacific Northwest physician groups). Quality improvement reports were included from October 2001 through April 2004 issued to approximately 300 large physician organizations. MAIN OUTCOME MEASURES: Three process measures of clinical quality: cervical cancer screening, mammography, and hemoglobin A1c testing. RESULTS: Improvements in clinical quality scores were as follows: for cervical cancer screening, 5.3% for California vs 1.7% for Pacific Northwest; for mammography, 1.9% vs 0.2%; and for hemoglobin A1c, 2.1% vs 2.1%. Compared with physician groups in the Pacific Northwest, the California network demonstrated greater quality improvement after the pay-for-performance intervention only in cervical cancer screening (a 3.6% difference in improvement [P = .02]). In total, the plan awarded 3.4 million dollars (27% of the amount set aside) in bonus payments between July 2003 and April 2004, the first year of the program. For all 3 measures, physician groups with baseline performance at or above the performance threshold for receipt of a bonus improved the least but garnered the largest share of the bonus payments. CONCLUSION: Paying clinicians to reach a common, fixed performance target may produce little gain in quality for the money spent and will largely reward those with higher performance at baseline.

Benchmarking↗
PubMed2006

Pay-for-performance programs in family practices in the United Kingdom.

BACKGROUND: In 2004, after a series of national initiatives associated with marked improvements in the quality of care, the National Health Service of the United Kingdom introduced a pay-for-performance contract for family practitioners. This contract increases existing income according to performance with respect to 146 quality indicators covering clinical care for 10 chronic diseases, organization of care, and patient experience. METHODS: We analyzed data extracted automatically from clinical computing systems for 8105 family practices in England in the first year of the pay-for-performance program (April 2004 through March 2005), data from the U.K. Census, and data on characteristics of individual family practices. We examined the proportion of patients deemed eligible for a clinical quality indicator for whom the indicator was met (reported achievement) and the proportion of the total number of patients with a medical condition for whom a quality indicator was met (population achievement), and we used multiple regression analysis to determine the extent to which practices achieved high scores by classifying patients as ineligible for quality indicators (exception reporting). RESULTS: The median reported achievement in the first year of the new contract was 83.4 percent (interquartile range, 78.2 to 87.0 percent). Sociodemographic characteristics of the patients (age and socioeconomic features) and practices (size of practice, number of patients per practitioner, age of practitioner, and whether the practitioner was medically educated in the United Kingdom) had moderate but significant effects on performance. Exception reporting by practices was not extensive (median rate, 6 percent), but it was the strongest predictor of achievement: a 1 percent increase in the rate of exception reporting was associated with a 0.31 percent increase in reported achievement. Exception reporting was high in a small number of practices: 1 percent of practices excluded more than 15 percent of patients. CONCLUSIONS: English family practices attained high levels of achievement in the first year of the new pay-for-performance contract. A small number of practices appear to have achieved high scores by excluding large numbers of patients by exception reporting. More research is needed to determine whether these practices are excluding patients for sound clinical reasons or in order to increase income.

Chronic Disease↗
PubMed2005

Quality incentive payment systems: promise and problems.

Public and corporate pressure to improve the quality of healthcare in the United States has never been greater. Rising costs, recent discouraging appraisals of patient safety, accelerating malpractice litigation, and an increasing burden of chronic disease have intensified the demand for a change in current policies. Central to these efforts are payers who are increasingly creating financial incentives for providers to deliver high-quality healthcare. It is hoped that these programs (sometimes referred to as "quality incentive payment systems") will stimulate the adoption of systems that will reduce variability and assure that high-quality care is being delivered. Whether these programs will achieve their objectives remains to be determined. There are many unanswered questions about their effectiveness.

Humans↗
PubMed2004

Trust in insurers and access to physicians: associated enrollee behaviors and changes over time.

OBJECTIVE: Most studies of trust in the medical arena have focused on trust in physicians rather than trust in health insurers, and have been cross-sectional rather than longitudinal studies. This study examined associations among trust in a managed care insurer, trust in one's primary physician, and subsequent enrollee behaviors relating to source of care. The study also documents changes in trust in the study population following the disclosure of physician incentives. STUDY SETTING: A medium-sized (300,000 member) HMO, located in the southeastern United States. DATA COLLECTION: One to two years after baseline, we randomly resurveyed a quarter (n = 558) of the initial study population of a large intervention study designed to measure the impact of disclosing HMO financial incentives on patient trust. This follow-up study was also designed to measure the effects of trust on source of care. ANALYSES: Multivariate regression analyses of survey data examined associations between baseline levels of trust and subsequent enrollee behaviors such as using a non-PCP physician without a PCP referral, as well as changes in trust since baseline. RESULTS: High baseline insurer trust was associated with a lower probability of a patient seeking care from a non-PCP physician (OR = 0.55, 95 percent CI: 0.33, 0.91). No long-term effects of prior disclosure of financial incentives were observed. Overall, there was a slight increase in overall trust in the insurer (1.8 percent, p < .05) but no change in trust in one's primary physician. The increase in insurer trust was primarily restricted to 23 percent of the enrollees who had changed their PCPs following the baseline survey (6.6 percent, p < .01). In multivariate analyses, changing physicians was the most significant predictor of increased insurer trust (OR = 2.17, 95 percent CI: 1.37, 3.43). CONCLUSIONS. Trust in one's insurer seems to change over time more than trust in one's primary physician, and is predictive of enrollee behaviors such as seeking care from other physicians. The ability to change physicians seems to increase trust in the insurer.

Adult↗
PubMed2006

The cost of pay-for-performance in healthcare: an alternative view.

George Pink and his colleagues have provided healthcare policy makers with a thorough review of pay-for-performance systems in healthcare. In general, their review suggests that pay-for-performance systems have resulted in few positive, net outcomes for health systems. Among other things, they cite the perverse incentives often generated by these systems, as well as these systems' high design and administration costs. The following article, building on research in economics, sociology and social psychology, extends their discussion by suggesting why healthcare delivery may be a uniquely difficult sector in which to rely on pay-for-performance systems. This article does not intend to shut down discussion of pay-for-performance in healthcare, but instead suggests how we might usefully think about when pay-for-performance is more or less appropriate. This analysis reveals that the healthcare delivery sector has some unique advantages over other sectors and industries.

Australia↗
PubMed2006

Individual pay-for-performance in Canadian healthcare organizations.

Pink et al. discuss some of the issues related to pay-for-performance for individual and organizational healthcare providers. This commentary addresses key success factors for the implementation of individual pay-for-performance in publicly financed Canadian healthcare organizations. Publicly financed healthcare organizations in Canada have been relatively slow to adopt performance-pay programs as compared with private sector organizations; and those that have been developed have been, for the most part, rather crude. In many cases, they have become an additional mechanism for delivering base pay, rather than a true variable-pay program that motivates and differentiates performance. In light of the many issues that need to be addressed, we feel that pay-for-performance should be introduced gradually, beginning at the most senior levels of the organization. Above all, it is critical for publicly financed healthcare organizations to recognize that introducing pay-for-performance involves not only a set of structures and processes, but also likely a profound change in organizational values and behaviours.

Canada↗
PubMed2006

Mixing the oil with the water: pay-for-performance in Canadian healthcare.

Public health systems in other countries have been experimenting with pay mechanisms that specifically target improvements in productivity and quality. The potential gains are huge, but actual results are less certain, since they rely on a detailed and strategic understanding of local incentives. Canada is a slow joiner for reasons that are rarely discussed, but that may be related to some fundamental issues that make our existing payment mechanisms incompatible with pay-for-performance (P4P). As the international community sets new standards for both quality and productivity in healthcare, Canadians will find it increasingly difficult to stay with their existing pay mechanisms, safe as they may seem to us at the moment. The transition, which will not be easy, will force us to take a hard look at some of the values we take for granted.

Canada↗
PubMed2006

Pay-for-performance in publicly financed healthcare: some international experience and considerations for Canada.

Recent reports in the United States and Canada provide evidence that healthcare systems routinely fail to deliver safe and high-quality healthcare services. Governments and other healthcare payers have begun to experiment with pay-for-performance programs that offer healthcare providers and organizations financial incentives for quality. The purpose of this paper is (1) to provide an overview of the design of major pay-for-performance programs in the United States, the United Kingdom, and Australia, with specific focus on government-sponsored programs, and (2) to articulate some considerations for potential implementation of pay-for-performance in Canada.

Australia↗