Pay-for-performance health plans need to have "meaningful" bonuses in order to be relevant, but that may not be possible until there is greater usage of electronic medical records to measure outcomes and set fair payments, executives with a healthcare market research firm say.
"We need fuller penetration of EMRs to pull results out (of patient encounters) and measure outcomes," says John Haughton, M.D., medical director and technical advisor for Med-Vantage, a San Francisco-based consultancy. "But how do you put a number on a payment?"
Haughton posed that question Wednesday during a Healthcare Financial Management Association teleconference on pay-for-performance programs.
The most equitable way, Haughton surmises, is to reward physicians for following protocols and evidence-based alerts from EMR systems, not just to pay for installing technology.
"ROI can be very high, but often not valid from a quality standpoint," Haughton says of clinical IT. "We need to reward appropriate care rather than inappropriate triage."
Med-Vantage surveyed and interviewed 30 entities on the topic, including 13 health plans, nine technology vendors, the Pacific Business Group on Health and CMS Administrator Thomas Scully.
The company finds that incentive payouts must be "meaningful" to medical practices and hospitals in order to have any tangible effect on healthcare quality, according to Med-Vantage President Geoffrey Baker. This means at least 10% extra for primary care practices and a minimum of 4% for hospitals, Baker says.
But this raises a question of where the extra money should come from or if incentives will lead to lower reimbursements for care that does not meet higher standards.
"Employers don't want to pay more (to insure their workers), while docs see this as just a reshuffling of the pie," Baker says.
From the survey, Baker concludes that incentive programs can be phased in with a series of fee-schedule increases over several years. With a 5% fee hike, every physician could realize a 2% reimbursement gain, while the other 3% could go into an incentive pool, Baker says.