Pay-for-performance programs should drill down to specific cost drivers to achieve their purpose of lowering costs while maintaining or improving quality of care, according to a Health Affairs Web-exclusive report.
Three top physicians from the Rochester (N.Y.) Individual Practice Association looked closely at hypertension and throat-disorder treatment within their practice and found that their pay-for-performance model didnt accurately reward efficiency or pinpoint true cost drivers such as brand-name prescribing and a throat diagnostic test.
The IPA, which includes 900 primary-care physicians and 2,500 sub-specialists, had been using a so-called efficiency index, or observed-expected ratio for pay-for-performance, since 1999. This common measure compares the costs incurred by a specific physician with the average per-physician costs in the relevant specialty and rewards accordingly.
But in looking at hypertension care, the physicians discovered that the real cost driver was prescribing brand-name hypertension drugs instead of comparable generics. Emergency room visits, a common measure used in P4P, while increasing an individual physicians efficiency index, had negligible cost effects per care episode and for the hypertension specialty as a whole. Similarly, the main cost driver in throat-disorder treatment was performing fiber optic laryngoscopies, a test used to examine the back of the throat and vocal cords. But greater use of the procedure was not associated with better outcomes or lower costs elsewhere. In fact, the physicians who performed more of these tests had higher pharmacy and office visit costs, and were often unaware they were ordering the test more than their peers, according to the study.
The efficiency index reflects a judgmental approach that attempts to motivate physicians through blame and fear, making physicians adversaries rather than partners in change, Howard Beckman, medical director at RIPA and study co-author, said in a written statement. -- by Rebecca Vesely
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