Pay-For-Performance: The United States Can Learn From the United Kingdom & New Zealand.

1. Pay-For-Performance: The United States Can Learn From the United Kingdom & New Zealand. David J. Satin MD Assistant Professor, Dept. Family Med & Com HealthPost Doctoral Fellow, Center for BioethicsCommittee Member, AMA Geriatrics P4P Committee dsatin@umphysicians.umn.edu

2. Following this session, participants will be able to: • Describe how a pay-for-performance (P4P) model of physician reimbursement functions. • Cite economic, clinical, social, and moral benefits and burdens likely to result from P4P. • Compare and contrast P4P in the United States and abroad.

3. Pay-for-Performance (P4P) Definition “The use of incentives to encourage and reinforce the delivery of evidence-based practices and health care system transformation that promote better outcomes as efficiently as possible.” Outcomes-Based Compensation: Pay-For-Performance Design Principles 4th Annual Disease Management Outcomes Summit Johns Hopkins / American Healthways, Nov. 2004

4. What is P4P? • Third party payer or health system awards periodic bonus to clinicians and/or practices that reach particular quality goals. • Quality goals are typically consistent with the National Committee for Quality Assurance’s Health Plan Employer Data and Information Set (HEDIS) quality markers. 1. Foubister, Vida. “Issue of the Month: Pay-for-Performance in Medicaid” The Commonwealth Fund. Accessed 8/29/05 http://www.cmwf.org/publications_show.htm?doc_id=274106

5. The P4P Rationale • Physicians change practice patterns in response to substantial changes in methods of reimbursement. • Average length of hospital stay halved since DRG payments began in 1980s. • Achieving HEDIS quality measures and adhering to professional guidelines result, on average, in better patient outcomes. 2. Outcomes-Based Compensation: Pay-For-Performance Design Principles, 4th Annual Disease Management Outcomes Summit, Johns Hopkins / American Healthways, Nov. 2004 3. Werner RM, Bradlow ET. Relationship between Medicare’s hospital compare performance measures and mortality rates. JAMA. 296(22):2694-2702, 2006 Dec 13.

6. How can the US learn from others?One problem others have dealt with is… • P4P may increase health care disparities. • Rural, minority, and poor patients all have, on average, worse outcomes.16 • These patients may be excluded from practices. • Clinics serving a higher proportion of these patients will be financially disadvantaged.17 16. Zaslavsky, A.M., J.N. Hochheimer, et al. “Impact of sociodemographic case mix on the HEDIS measures of health plan quality.” Med Care 38(10): 981-92, 2000. 17. Satin, DJ. Paying Physicians and Protecting the Poor. Minnesota Medicine, Apr. 2006, p42-44

7. How is P4P done overseas?The UK National Health System • National system • Notable differences between systems: • Homogenous system • Average General Practitioner’s bonus in 2004 was 25% of fee-for-service reimbursements and as much as 50% • Adjusts performance goals for economic status of patient population • Allows for particular exceptions for patients unable to meet goals 4. Rowe JW. Pay-for-Performance and Accountability: Related Themes in Improving Health Care. Annals of Internal Medicine. 145;9:695-9. Nov. 7 2006. Personal interviews Sept 2005: Shah, W. South London Family Practice, England, & Gillis, J. Scotland FP.

8. How is P4P done overseas?New Zealand’s Regional Systems • National healthcare implemented by regions • Notable differences between systems: • Heterogeneous system of grant-style quality improvement initiatives • Adjusts performance goals for aboriginal status of patient population • Allows for particular exceptions for patients unable to meet goals Personal interviews Sept 2005: Townsend, T. New Zealand Family Practice

9. How is P4P done overseas?Australia’s Practice Incentives Program • National program • Notable differences between systems: • Includes access measures • Uses a tiered system of bonuses • Average immunization bonus per practice in 2006 was $997.84 • Goal adjustments for age and gender mix. No exceptions 5. http://www.medicareaustralia.gov.au/providers/incentives Email cor. 4/07: Michelle Sweidan, Pharmaceutical Decision Support, National Prescribing Service Ltd.

10. How is P4P done in the United States of America? • Over 100 individual programs with a 74 measure national program launching July 1 2007. • Notable differences between systems: • Public reporting of data increasing in popularity • Focus on all or nothing “Grand Slam” measures • Private insurance corporations determine their measures • Typically no goal adjustments or patient exceptions

11. Et tu, Canada? P4P initiatives quietly growing. Notable differences between systems: Impact of limited private market? National, Provincial, or Local? Overuse measures to control costs? 6. Landon BE, Is Pay-for-Performance Moving North? P4P Prospects in the Canadian Healthcare System. Healthcare Papers 2006, Vol. 6, No. 4.

12. Starter References • Outcomes-Based Compensation: Pay-For-Performance Design Principles, 4th Annual Disease Management Outcomes Summit, Johns Hopkins / American Healthways, Nov. 2004. • American Academy of Family Physicians (AAFP) P4P Guidelines. http://www.aafp.org/x30307.xml?printxml Accessed 8/29/2005. • Petersen L, Woodard L, Urech T, Daw C, Sookanan S. Does Pay-for-Performance Improve the Quality of Health Care? Annals of Internal Medicine 2006;145(4):265-272 • Rosenthal MB. Dudley RA. Pay-for-performance: will the latest payment trend improve care? JAMA. 297(7):740-4, 2007 Feb 21. • Landon BE, Is Pay-for-Performance Moving North? P4P Prospects in the Canadian Healthcare System. Healthcare Papers 2006, Vol. 6, No. 4.