Pay-for-performance schemes have a toehold in several U.S. healthcare markets, but the jury is still out on whether they will survive and have an impact on quality of care, according to a report by the Center for Studying Health System Change.
The report, Paying for Quality: Health Plans Try Carrots Instead of Sticks, looks at plans in seven of the 12 communities studied by the HSC, a not-for-profit research organization funded by the Robert Wood Johnson Foundation.
"I'm not sure I could say definitively that it's the future," said Bradley Strunk, health research analyst at HSC and co-author of the report, which was based on interviews with healthcare leaders and site visits in 2002 and 2003 in 12 representative American communities.
Strunk said the researchers found five large-scale incentive plans in place in Boston, Indianapolis, Lansing, Mich., Orange County, Calif., and Northern New Jersey and smaller pilot projects in Little Rock, Ark., and Seattle.
Incentives took the form of either bonus payments, paid typically on a quarterly or annual basis, and payment-rate increases over multiyear contracts. Bonus rates ranged from 1% to 5% of total payments.
The largest of the schemes, that of California's Integrated Healthcare Association, involves six large HMOs covering 8 million people and involves a bonus scheme with 40% of the increase for matching clinical quality measures, 40% for patient satisfaction scores and 20% for adoption of clinical information technology.
First bonuses under the California scheme are to be paid out this summer and will offer increased capitation payments of $2 to $4.50 per member per month.
Only one of the seven communities -- Boston, with its "Bridges to Excellence" program, which pays physicians for improving care for diabetic and cardiac patients -- has a bonus scheme of payments made directly from employer to provider.
One thing holding back widespread adoption is that there is "little empirical evidence to date" to support the business case that quality healthcare will reduce unnecessary follow-up care and reduce costs, according to the report.
"Without broader willingness among purchasers to pay for quality, plans will be hard-pressed to sustain a business case for their efforts over the longer term," the report said.
"With a few exceptions, providers haven't been driving forces behind quality incentives, and many remain cautious about incentive program designs and measures," the report said.
Providers who favor the pay-for-performance schemes often see them as a way to promote evidence-based medicine and see the bonus payments as a means to fund information technology systems or other quality-of-care infrastructure, the report said.
The report cites the quality-incentive programs in last year's Medicare Prescription Drug, Improvement and Modernization Act as positive signs that government is getting serious about paying for improved quality.
Another act of leadership by government would be support of Agency for Healthcare Research and Quality clinical guidelines and metrics "that can be widely accepted in the physician community and followed."
"This is an area where a critical public-policy role can be made, to fund the infrastructure for these programs to be done in the private sector," Strunk said.