The number of physician pay-for-performance programs has almost quadrupled in the past five years, according to data released last month, though some in the industry are questioning the value of pay-for-performance programs rapid growth. That follows some less-than stellar results from a ground-breaking hospital pay-for-performance demonstration project that the government recently renewed for another three years.
Healthcare payers trumpet their use, issuing glowing news releases about the expansion of their programs scope and the millions of dollars in physician rewards theyre dispersing. Meanwhile, government officials, research organizations and physicians are questioning the motivation and methodology of current pay-for-performance programs.
In the end, the one industry segment that may truly be happy with pay-for-performance are health information technology vendors that can persuade providers that their electronic systems are absolutely necessary for the data management that pay-for-performance requires.
The data, from healthcare informatics group Med-Vantage and the Leapfrog Group, projected there will be 155 pay-for-performance programs in place this year, compared with only 39 in 2003.
Yet a report from PricewaterhouseCoopers released earlier in August found some pay-for-performance flaws. Looking at 10 different pay-for-performance programs, the researchers found that they used almost 60 different physician performance indicators; that no one indicator was used by all 10 programs; and no two programs rewarded providers the same way.
Pay-for-performance programs can be an important tool to link payment to quality, the Pricewaterhouse report stated, But the wide variation in program structures, performance metrics and rewards structures mutes their potential impact.
Along with the plethora of differing measures, the Pricewaterhouse report noted that the physician rewards offered were generally too low to make a significant difference.
I thought the report by PWC was pretty much on the money, says Francois de Brantes, national coordinator for the Bridges to Excellence physician reward program.
Bridges to Excellence announced last month it now has more than 100 employers and health plans working in 19 regions participating in its physician office and diabetes-, cardiac- and spine-care programs.
Physicians have to know If I do this, Ill get a positive hit from multiple parties, de Brantes says.
Meanwhile, physician-ranking programs under consideration for use by insurers Aetna, Cigna HealthCare and UnitedHealth Group have come under scrutiny by New York State Attorney General Andrew Cuomo, who expressed concern that the rankings may be used to steer patients toward less-expensive rather than higher-quality providers.
In an e-mail, Aetna spokeswoman Cynthia Michener said Aetna is fully cooperating with the request for information, is committed to transparency and is reaching out to medical societies to address physician concerns about reliable data.
Some in the industry, physicians in particular, view pay-for-performance and other performance-ranking plans as merely a way to pay them less. Former American Medical Association president and Joint Commission board member Donald Palmisano, M.D., expressed support for Cuomos investigation. Cuomos concern is a valid one, Palmisano says. Its been frequently stated that this (pay-for-performance and physician rankings) is more of a rationing plan for health plans to make more money.
Palmisano, a New Orleans surgeon and attorney who now operates Intrepid Resources, a risk-management, patient-safety and claims-review consulting service, expressed disdain for the whole concept of pay-for-performance. First off, a physician has an ethical and fiduciary responsibility to do whats in the best interests of the patient, he said. I think its insulting to think that giving me an additional amount of money will make me do what Im supposed to do.
And while Palmisano criticized the concept, the American Board of Internal Medicine last month issued a news release trumpeting how the Blue Cross and Blue Shield Association, Cigna HealthCare, Humana and WellPoint were incorporating the boards maintenance of certification programs into their physician reward programs.
Although Aetna wasnt signaled out by the board, the company noted that its measures are developed from standards consistent with those created by the American Heart Association, American College of Obstetricians and Gynecologists and the CMS.
In addition, on Aug. 24, Blue Cross of California (a subsidiary of WellPoint) announced that it was rewarding 126 physician groups a total of $69 million in bonuses for performance in 2006. About a week earlier, Blue Shield of California announced that it distributed $31 million in bonus money.
In an e-mail, Michael Belman, medical director for clinical quality and innovations at Blue Cross of California, says rewards continue to grow and have increased from the initial payout of $25 million in 2003. He added that the program is a part of the Integrated Health Associations pay-for-performance effort involving a collaborative of 200 California medical groups and seven health plans (including Blue Shield of California), and that data acquisition is coordinated, and we use the same quality metrics across the entire set of provider organizations so in this program we have minimized the administrative burden.
We do believe some IT building blocks have to be put in place to reduce the burden on providers, says Sam Muppalla, chief operating officer of Portico Systems, a Conshohocken, Pa.-based software provider for health plans.
For de Brantes, the key is to have doctors begin their own systematic collection of data to provide them with internal feedback that is plan agnostic.
That way they can look at the data for all their patientsnot just one plan at a time, he says.
Hindy Shaman, a director of Pricewaterhouse's Health Research Institute who participated in the creation of the pay-for-performance report, said wider IT adoption would pave the way for standardized measures, make it easier to validate physician data, and reduce the administrative costs of pay-for-performance.
All the different measures are just a morass for people to deal with, and the concern is that people will just throw their hands in the air and give up, Shaman said. It doesnt mean that the solution itself is wrong. Its just that were going about it the wrong way with everyone inventing their own yardstick. It doesnt need to be this hard, and were doing ourselves a disservice by having so much variation.
Meanwhile, less than one year after the CMS renewed a hospital demonstration pay-for-performance project for another three years, a new study suggests it may not be working as hoped.
Financial incentives did not appear to make all that much difference in improving outcomes in one of the first studies evaluating the landmark pilot project in collaboration with the Premier hospital alliance.
To be sure, processes and outcomes improved for heart attack patients at participating hospitals, but hospitals that are participating in a quality-improvement program that does not offer financial rewards improved equally. The study thus raises questions as to whether money spent to reward hospitals for their improvement efforts is really money well-spent.
CMS and Premier officials welcome the study, acknowledging the pilot projectwhich was launched in 2003was undertaken in part to promote more research on the pay-for-performance issue. But they also say there are other indications that even the modest monetary incentives offered by the CMS pilot project seem to have produced encouraging results.
We have heard back from our Premier hospitals that their inclusion (in the pilot program) and the effort that they are putting in is giving them additional impetus toward quality improvement, said Mark Wynn, director of the CMS' payment policy demonstration division. It is not very much money we are talking about, but it gives focus to the quality improvement that is very beneficial.
In the study published in the June 6 edition of the Journal of the American Medical Association, researchers at Duke University Medical Center, Durham, N.C., studied whether some of the hospitals participating in the CMS pilot project showed better improvement in certain process measures and outcomes for treatment of heart attack than hospitals participating in a national, voluntary and observational quality improvement program called Crusade that is sponsored by Duke.
The Duke program does not offer financial rewards. The study analyzed data for 105,383 patients treated between July 2003 and June 2006 at 500 Crusade hospitals. Patients at 54 Crusade hospitals that also participated in the CMS pilot were selected and then compared with patients at the remaining 446 hospitals.
Researchers found significant improvement at both pay-for-performance and control hospitals with no significant difference in the rate of improvement between the two hospital groups. The researchers also did not find evidence that pay-for-performance had an adverse impact on processes that werent subject to financial incentives.
Premier officials are pleased that researchers are studying the pilot program, and we expect to see a variety of points of view in the future, says Hunter Kome, a Premier spokesman. But Kome also says that an earlier study published in the February New England Journal of Medicine based on data from all 207 hospitals participating in the CMS demonstration project found a stronger relationship between financial incentives and quality improvement.
Wynn also notes that of the five clinical conditions included in the CMS pilot, cardiac care started off at the highest level and (consequently) showed the least opportunity for improvement.
With additional reporting by Modern Physician reporter Cinda Becker.
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