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The Benefits and Burdens of Pay for Performance

The Benefits and Burdens of Pay for Performance . David J. Satin MD Assistant Professor, Dept. Family Med & Com Health Post Doctoral Fellow, Center for Bioethics Committee Member, AMA Geriatrics P4P Committee dsatin@umphysicians.umn.edu. Following this session, participants will be able to:.

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The Benefits and Burdens of Pay for Performance

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  1. The Benefits and Burdens of Pay for Performance 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 4 economic, clinical, social, and moral benefits and 8 burdens likely to result from P4P. Summarize the evidence of P4P’s efficacy and adverse effects.

  3. Objective #1 Describe how a P4P model of physician reimbursement functions.

  4. 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

  5. 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

  6. Quality goals may be in areas of: • Structure: e.g.Having an electronic medical record • Process: e.g. Adherence to professional guidelines such as checking a hemoglobin A1c every 3 months in patients with DM2 • Outcomes: e.g. Hemoglobin A1C <7.0 in patients with DM2 2. Outcomes-Based Compensation: Pay-For-Performance Design Principles, 4th Annual Disease Management Outcomes Summit, Johns Hopkins / American Healthways, Nov. 2004

  7. Quality goals may be in areas of: Structure: e.g.Having an electronic medical record Process: e.g. Adherence to professional guidelines such as checking a hemoglobin A1c every 3 months in patients with DM2 Outcomes: e.g. Hemoglobin A1C <7.0 in patients with DM2 2. Outcomes-Based Compensation: Pay-For-Performance Design Principles, 4th Annual Disease Management Outcomes Summit, Johns Hopkins / American Healthways, Nov. 2004

  8. Who sets the goals? • P4P programs vary by third party payer or health system. • Some require a 90% childhood vaccination rate, others 80%. • Some goals vary annually based on last year’s top clinics’ results. • Some require personal improvement over last year’s results. • Some restrict their P4P criteria to patients with their insurance. Personal investigation of Minnesota’s major insurers including Medica, HealthPartners, Blue Cross Blue Shield, UCare; interviews, internet search on insurance websites, and internal UMN DFMCH documents, 9/2005.

  9. The Money • Some P4P program “bonuses” truly represent new funds while others represent a 3% “withhold” across the board from the current fee-for-service schedule. • P4P reimbursements range from 3%-20% of a physician’s fee-for-service reimbursements. Personal investigation of Minnesota’s major insurers including Medica, HealthPartners, Blue Cross Blue Shield, UCare; interviews, internet search on insurance websites, and internal UMN DFMCH documents, 9/2005.

  10. The Money Some P4P program “bonuses” truly represent new funds while others represent a 3% “withhold” across the board from the current fee-for-service schedule. P4P reimbursements range from 3%-20% of a physician’s fee-for-service reimbursements. Personal investigation of Minnesota’s major insurers including Medica, HealthPartners, Blue Cross Blue Shield, UCare; interviews, internet search on insurance websites, and internal UMN DFMCH documents, 9/2005.

  11. 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.

  12. The Charitable Interpretation of P4P P4P reimburses physicians for providing quality care, and finances quality improvement innovations.

  13. The Skeptical Interpretation of P4P P4P enables third party payers to control costs by bribing physicians to follow prescribed practice patterns.

  14. The Taking-it-too-personally Interpretation of P4P Do they really think that the existing moral and social incentives for providing excellent care are insufficient – that financial incentives will succeed where my professional character failed?

  15. Objective #2 Cite 4 economic, clinical, social, and moral benefits and 8 burdens likely to result from P4P.

  16. DISCLAIMER! All forms of physician reimbursement (fee-for-service, capitation, salary…) have benefits and burdens to patients, physicians, third party payers, and society. 4. Goold, S. Trust and Physician Payment. Healthcare Executive, July/Aug 1998

  17. 1. Finances quality improvement projects* • Under P4P it does not matter how you meet the quality criteria. • Unprofitable enterprises under fee-for-service become valuable through P4P bonuses: • Investing in support staff • Implementing an EMR • Patient education • Developing a therapeutic relationship * Charitable interpretation of P4P – contrast with skeptical interpretation in Selected BURDENS of P4P

  18. 2. Aligns goals of clinical care with payment • Quantity ought not be the only determinant of reimbursement. • P4P derives some of the benefits of capitation.

  19. 3. Encourages more standardized care • There is currently very little financial incentive to adhere to clinical guidelines and monitor quality. • P4P provides a financial incentive to close the chasm4 between the health care patients could receive and the health care they do receive. 5. Crossing the Quality Chasm: The IOM Health Care Quality Initiative. http://www.iom.edu/CMS/8089.aspx

  20. 4. Healthier patients can be cared for more cheaply and are more productive

  21. P4P Potential BENEFITS Summary • Finances quality improvement projects • Aligns goals of care with payment • Encourages more standardized care • Healthy patients = health care savings

  22. 1. Quality data collection is burdensome E.g. Review of ‘asthma patients’ seen in ER: • 3/12 patients had never been seen in our clinic (‘invisible patients’ assigned to us by the health plan) • 2/12 did not have asthma • Of the remaining 7/12, some had their first attack, others had mild intermittent asthma, others hadn’t been seen in over 2 yrs. 6. Harper, P. Assistant Professor, Dept. of Family Med and Community Health, UMN. Personal interview, 9/19/2005.

  23. 2. Up front investment may be large & risky • Income variability introduced by P4P may complicate clinic and personal budgeting.7 • Small practices may go under if the implementation of their EMR does not net P4P bonuses. • Some practices, especially rural practices, may not have the equity or community resources to compete. 7. Metsemakers, J. Professor of General Practice, Department Chair, U of Maastricht. Personal interview 9/7/2005.

  24. 3. May Erode medical professionalism. • What if financial incentives succeed where moral and social incentives failed to improve quality?† • Medical students’ choice of specialty correlates with debt.10,11 • Slippery slope of self regulation (underuse vs overuse measures).* † Taking-it-too-personally interpretation of P4P 10. Tonkin P. Effect of rising medical student debt on residency specialty selection at the University of Minnesota. Minnesota Medicine, June 2006, p46-49 11. Rosenblatt RA, Andrilla CH. The impact of U.S. medical students' debt on their choice of primary care careers: an analysis of data from the 2002 medical school graduation questionnaire. Academic Med, 2005 Sep;80(9):815-9 * Skeptical interpretation of P4P - contrast with charitable interpretation in Selected BENEFITS of P4P

  25. 4. Altered physician-patient relationship • Will physicians get angry with patients who refuse blood draws or no-show referred diabetic eye exams? • Will patients feel disrespected if their physicians continuously hassle them to comply with the guidelines? • Will physicians be able to facilitate non-coerced, informed decision making? 8. Weiss G, What would you do? New issues in medical ethics. Medical Economics, Aug 2006, p56-61 9. Satin, DJ. The Impact of Pay-for-Performance Beyond Quality Markers – A Call for Bioethics Research. Bioethics Examiner, University of Minnesota Center for Bioethics, Fall 2006.

  26. 5. May discourage clinical judgment • Current American P4P programs typically do not allow for exceptions. • Intersecting guidelines can be dangerous.12 • When faced with exceptional patients, clinicians must have the moral fortitude to exercise clinical judgment despite P4P.13 12. Boyd CM. Darer J. Boult C. Fried LP. Boult L. Wu AW. Clinical practice guidelines and quality of care for older patients with multiple comorbid diseases: implications for pay for performance. JAMA 294(6):716-24, 8/10/2005. 13. Satin DJ. Miles J. Practice Incentives and Professional Responsibility. AMA Virtual Mentor, November 2008. http://virtualmentor.ama-assn.org/2008/11/ccas1-0811.html

  27. 6. Sicker patients may get worse care • Sicker patients have more limited access when clinicians are rewarded for healthier patients under P4P.14 • Special programs for Diabetics with A1C close to goal (7-8), but nothing for patients with A1C far from goal (>10). • Risks of Diabetic complications rise exponentially with a rise in A1C.15,16 14. Shen Y. Selection incentives in a performance-based contracting system. Health Serv. Res. 2003;38:535-52 15. United Kingdom Prospective Diabetes Study. (UKPDS) http://www.dtu.ox.ac.uk/index.html?maindoc=/ukpds/ 16. Diabetes Control and Complications Trial (DCCT). http://diabetes.niddk.nih.gov/dm/pubs/control/

  28. 7. May increase health care disparities • Rural, minority, and poor patients all have, on average, worse outcomes.17 • These patients may be excluded from practices. • Clinics serving a higher proportion of these patients will be financially disadvantaged.18 17. 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. 18. Satin, DJ. Paying Physicians and Protecting the Poor. Minnesota Medicine, Apr. 2006, p42-44

  29. 8. May slow integration of new evidence “Major Diabetes Trial Halted After Deaths” 19. Satin D, Miles J. ACCORD, ADVANCE, and P4P: The Data-Driven Future of Quality Improvement. Minnesota Physician, March, 2009.

  30. P4P Potential BURDEN Summary • Quality data collection is burdensome • Up front investment is large and risky • May erode medical professionalism • Altered physician-patient relationship • May discourage clinical judgment • Sicker patients may get worse care • May increase health care disparities • May slow integration of new evidence

  31. Objective #3 Summarize the evidence of P4P’s efficacy and safety.

  32. A Word About the Evidence • Over the past 3 years, there has been an explosion of data demonstrating the intermediate level success of P4P programs.20,21 • Public reporting of data appears to have an additive effect on improvement in outcomes.22 20. Rosenthal MB, Frank RG, Li Z, Epstein AM. Early experience with pay-for-performance: from concept to practice. JAMA 2005;294:1788–1792. 21. 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 22. Rowe JW. Pay-for-performance and accountability: related themes in improving health care. Annals of Internal Medicine. 145(9):695-9, 2006 Nov 7.

  33. A Word About the Evidence • More clinically significant hospital-based outcomes such as death from pneumonia, CHF, and MI have not been clearly demonstrated.23 • There remains little data addressing the potential adverse effects of P4P.24,21 23. Werner RM, Bradlow ET. Relationship between Medicare’s hospital compare performance measures and mortality rates. JAMA. 296(22):2694-2702, 2006 Dec 13. 24. Rosenthal MB. Dudley RA. Pay-for-performance: will the latest payment trend improve care? JAMA. 297(7):740-4, 2007 Feb 21. 21. 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

  34. Conclusions • P4P in the United States is heterogeneous. • P4P can improve intermediate level outcomes. • It is unclear whether P4P will improve overall morbidity and all cause mortality.

  35. Conclusions • There will be costs for the success of P4P. • Demonstrating the adverse effects of P4P is more difficult than demonstrating its positive effects.

  36. Following this session, participants will be able to: Describe how a pay for performance (P4P) model of physician reimbursement functions. Cite 4 economic, clinical, social, and moral benefits and 8 burdens likely to result from P4P. Summarize the evidence of P4P’s efficacy and adverse effects.

  37. 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.

  38. Bonus Objective Compare and contrast P4P in the United States and abroad.

  39. 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 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.

  40. 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

  41. 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 • Promotes case finding (e.g. Pap smear bonus for new or >5yrs) http://www.medicareaustralia.gov.au/providers/incentives Email cor. 4/07: Michelle Sweidan, Pharmaceutical Decision Support, National Prescribing Service Ltd.

  42. How is P4P done in the United States of America? • Over 150 individual programs with a national program that currently rewards for reporting only. • 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

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