The bright prospect of pay-for-performance as a key therapy for Americas ailing healthcare system appears to have dimmed a bit in just the past 12 months or so.
In February 2006, when the Oakland, Calif.-based Integrated Healthcare Association hosted its first national summit on this broad topic, a crowd of about 800 gathered for what amounted to nothing less than a three-day pep rally for pay-for-performance.
Earlier this month, the IHA, which manages the nations largest and most successful pay-for-performance program, hosted its second summit in Los Angeles. The crowd was a bit smaller this year, and the cheerleading and celebratory zeal that punctuated the first meeting was largely absent, replaced by a far more subdued outlook from industry leaders who now seem to recognize that the adoption of this embryonic model may be a lot more difficult to develop than anticipated.
Francois de Brantes, national coordinator of the Bridges to Excellence quality improvement coalition and a co-chairperson of the summit, joked that last years conference was like a jubilee compared with the mind-set this year, which ended with a commitment to patiently push forward despite all sorts of potential roadblocks.
In healthcare, nothing is easy, de Brantes said. Last year, the attitude was: P4P workslets all go out and do it! But enthusiasm turns into objective realism, and thats good. It forces you to focus on specific issues that still need to be addressed.
While proponents felt the movement to reward doctors for quality instead of quantity would quickly sweep the nation, at least some of the momentum has stalled because of a number of factors.
They include resistance from physicians, the difficulty of determining the right criteria for judging performance and the considerable costs of adding the information technology infrastructure needed to report these data.
The level of incentives is also a concernthe IHAs payments of $55 million from seven health plans last year totaled less than 2% of most physicians income. Experts believe that the figure will have to jump to 5% to 10% to trigger interest and acceptance.
In some ways, hospitals are well ahead of physicians. Last week, the CMS approved a three-year extension of its Premier Hospital Quality Incentive Demonstration, which was launched in October 2003 and includes 250 hospitals. In its second year, the plan provided about $8.7 million in incentive payments to 115 top-performing hospitals.
Also last week, the CMS launched a Web site for its Physician Quality Reporting Initiative, a voluntary program that will provide bonus payments of 1.5% to doctors who meet reporting standards.
Of course, even a broad-based and wildly successful pay-for-performance program spread across America represents only one small step toward improving the $2 trillion-a-year healthcare system, said Suzanne Delbanco, chief executive officer of the Leapfrog Group. Pay-for-performance, she said, is a piece of a much bigger puzzle that must be tackled.
There are well over 100 pay-for-performance programs for doctors in the nation, most of them fairly small. The IHA is by far the largest, a statewide coalition that includes about 40,000 doctors who care for about 6.2 million patients.
But the IHAs success is due at least in part to a favorable business climate in California that featured large medical groups, far-flung independent practice associations and widespread capitation, noted Robert Margolis, a physician who is CEO of HealthCare Partners in Torrance, Calif., a healthcare management-services organization that includes a 400-physician multispecialty medical group.
We had a head start, Margolis said of the IHAs program. It was grafted on to a capitation program with big IPAs and medical groups. Changing the world is going to be tough. And its not going to happen soon.
But if youre not an optimist in this business, youre going to be seriously depressed.
The conference also focused on the addition of efficiency measures to formulas for incentives, a controversial approach that has been harshly criticized by some physician leaders, including American Medical Association President William Plested III.
In a column in the Feb. 19 edition of American Medical News, Plested, a longtime pay-for-performance foe, condemned efficiency criteria as cost-control measures, pure and simple. He also wrote that it is simply illogical to assume that pay-for-performance plans will improve care and reduce healthcare costs.
Still, the addition of efficiency measures as a key element of these incentive plans is likely to come quickly, many observers concluded. Dozens of small plans already include some form of efficiency in the mix. And the IHA expects to incorporate efficiency into its incentive program sometime this year.
For de Brantes, the key to success for pay-for-performance is to stick with the program. In time, he said, widespread acceptance of pay-for-performance is all but inevitable.
Do incentives work? he asked. Everyone knows they do. Thats not the issue. The questions are: How do you create the right plan? Are we going too far? Is it efficiency or quality that were measuring? Is there a broader way to tackle this issue? Well, its all of the above.
Whats needed, like it is in any field, is perseverance.