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Paying for Quality in the UK: New Models

Paying for Quality in the UK: New Models. Peter C. Smith Centre for Health Economics, University of York, UK. Four elements of the principal/agent problem. Objectives How close are those of principal and agent? Information How public, how verifiable, how costly? Incentives

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Paying for Quality in the UK: New Models

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  1. Paying for Quality in the UK: New Models Peter C. Smith Centre for Health Economics, University of York, UK

  2. Four elements of the principal/agent problem • Objectives • How close are those of principal and agent? • Information • How public, how verifiable, how costly? • Incentives • Designed vs accidental • Numerous design issues • Managerial capacity • Designing • Auditing • Evaluating

  3. Incentives: some design issues • which measures of performance to use as a basis for rewards; • how targets are to be set; • over what time period the scheme is to operate; • how performance measures along several dimensions are to be combined; • how much reward is to be dependent on attainment; • what is the link between improved performance and reward • what risk sharing arrangements are used • audit arrangements • evaluation arrangements.

  4. Incentives: what are the rewards? • Financial (individual) • Financial (organizational) • Professional advancement • An easy time • Freedom of action • Prestige and perceived worth • Intrinsic satisfaction

  5. General practice in England • All citizens must be registered with a general practitioner • Typical practice population 5,500 (but increasing) • Average three practitioners per practice • Traditional gatekeeping role in NHS • 2/3 general practitioners are independent contractors with the NHS • Traditional ‘General Medical Services’ contract developed piecemeal over decades - a mixture of capitation, salary, fee for service and grants • GPs are used to working in an incentivized environment • New GMS contract now in force.

  6. The New GMS contract • Developed in negotiation between government and providers • Approved by 79.4% in a ballot of GPs, with a response rate of 70% • Major emphasis on clinical quality • Up to 30% of income determined by quality incentives • Major reliance on self-reporting (with external audit). http://www.nhsconfed.org/gmscontract/

  7. Quality and Outcomes Framework • Each practice can earn ‘quality points’ according to reported performance • 146 performance indicators • 1,050 points distributed across indicators according to perceived importance • Points based on absolute level of attainment (not adjusted for local difficulty) • About £75 per point for an average practice, but increasing if a difficult environment • Minimum income guarantee (no loss of earnings)

  8. GMS Contract:Indicators and points at risk

  9. GMS Contract: Clinical indicators

  10. Hypertension: indicators, scale and points at risk

  11. The patient experience domain • Routine appointments must be not less than 10 minutes (30 points); • An ‘approved’ patient survey is undertaken each year (40 points); • The practice has ‘reflected on the results and proposed changes if appropriate’ (15 points); • The practice has discussed the results as a team with patient representatives, with ‘some evidence that [appropriate] changes have been enacted’ (15 points).

  12. Some arithmetic • For an average practice: • 5,500 patients; • 3 practitioners; • average levels of disadvantage. • £75 per point • So practice income at risk = £75 x 1,050 = £78,750 • Per practitioner = £78,750/3 = £26,250 ($50,000) • Approximately one third of base income. • An intention to rise to £120 per point (a further 60%).

  13. GMS contract: the strengths • Rewarding what matters • structure, process and outcome • Balanced scorecard • Local freedom to decide on priorities • Real rewards • Consistent with national clinical guidelines • Developed by the profession • Rewards teams, not individuals • Commitment to review and update

  14. GMS contract: the risks • Complexity may dilute its effectiveness • Unmeasured activity ignored • Reward structure distortive (too easy, too hard, wrong balance) • Discourages practice in challenging environments (cream skimming, recruitment of GPs in disadvantaged areas) • Discourages collaborative actions (social care) • Gaming (e.g. length of consultation) • Misrepresentation (lack of effective audit) • Ossification • Increases managerial costs • Undermines professional ethic, morale and unremunerated activity (‘endogenous preferences’).

  15. GMS contract. Why UK? Why now? • Extra money required to maintain supply of GPs • Decision to make finance conditional on improved quality • Single (or dominant) payer • GPs with registered populations (denominator of many of the performance indicators) • Consensus on what constitutes ‘good’ practice (widespread national guidelines) • General acceptance amongst GPs of need to improve quality • Improving IT infrastructure (forthcoming electronic health record)

  16. GMS contract: the priorities? • Good system of audit • Urgent monitoring, evaluation and review • Addressing most grotesque anomalies • Better measures of quality and risk adjustment. • Design issues: • power and size of incentives • difficulty of targets • risk sharing • avoidance of gaming and other adverse outcomes • Maintaining and enhancing the support of GPs

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