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 released last week 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 center, a not-for-profit research organization funded by the Robert Wood Johnson Foundation.
Bradley Strunk, health research analyst at the center and co-author of the report, 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 or 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 package with 40% of the increase for matching clinical quality measures, 40% for patient satisfaction scores and 20% for adoption of clinical information technology.
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.
Providers who favor pay-for-performance plans often see them as a way to promote evidence-based medicine and see the bonus payments as a way 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 signs that the government is getting serious about paying for improved quality.