P4P and Transparency: Careful What You Wish For

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P4P and Transparency Careful What You Wish For

• Robert A. Berenson, M.D.
• Senior Fellow, The Urban Institute
• AHQA Annual Meeting
• New Orleans, 14 Feb, 2007

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Some Clarifications

• P4P is not new in health care (see U.S. Health
  Care model of paying physicians that goes back 2
  decades) and, with variation, is used in
  education (No Child Left Behind) and executive
  compensation.
• There is little evidence of effectiveness, and it
  is controversial in these other sectors as well
  as in health care despite inherent logic

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P4P is Not Synonymous With Getting the
Incentives Right

• P4P uses marginal incentives and provides
  provider-specific rewards (penalties) based on
  measurable performance.
• The incentives embedded in basic payments
  applying to all providers are much more powerful
  than P4P marginal incentives
• Measuring health care correctly is difficult
  currently most measures are primary and secondary
  prevention and patient experience (HEDIS and
  CAHPS)

4
P4P is Not Synonymous with Value-Based Purchasing

• VBP is apparently a more palatable term
• The Senate Finance Committee, the House Ways and
  Means Committee, and CMS have all adopted it in
  place of P4P.
• P4P is not Value-based Purchasing, which involves
  an attempt to obtain the right kind of services
  of acceptable quality, at a reasonable cost

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Value-Based Purchasing Levers

• Provider eligibility requirements, e.g.,
  conditions of participation
• Benefit Design, e.g., variable cost-sharing
• Coverage Policy, e.g., cost-effectiveness
• Payment Policy, e.g. payment based on cost
• Technical Assistance, e.g., QIOs

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VBP Levers (cont.)

• Consumer information and education, e.g. Medicare
  website
• Pay for Performance
• Collaboration among purchasers, e.g., to develop
  common measurement sets
• Direct intervention, usually through contracting,
  e.g. MMA Section 721 pilot of disease management
• Berenson, Health Affairs Dec 10, 2003

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If It Aint Broke Dont Fix It

• The converse is --

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If Its Broke, Fix It
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The Tail of P4P Should Not Wag the Dog of Basic
Payment Policy

• So if RBRVS/FFS payment for primary care
  physicians doesnt support what clinicians need
  to be doing for chronic care patients in
  Medicare, change the basic system. Dont expect
  P4P to solve the problem, although it might be
  part of the solution.

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Even Compelling Logic Does Not Guarantee Success

• Prior authorization makes good sense in theory.
  It only fails in reality largely because of
  poor execution
• A cautionary lesson from prior auth. is that
  something that works well in one setting or for
  some conditions may work badly elsewhere
• There are reasons we have different payment
  systems for different providers besides
  provider self-interest

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Little Evidence On Effectiveness or
Cost-Effectiveness of P4P

• There have been 9 small RCTs -- and now
  reasonably well controlled Premier Demo studies
• Only a few, limited ones show that P4P leads to
  improved quality these are limited to single
  measure, e.g., immunizations rates, or single
  aspect of care, e.g., prevention
• Would not be the first time that an approach with
  supporting logic did not work or produced
  unacceptable side effects prior auth.,
  gatekeepers

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There Are Problems with Available Measures

• Outcome measures produce unstable findings,
  require case-mix adjustment, create perverse
  incentives to not treat sicker or more difficult
  patients, and usually do not produce actionable
  information
• Process measures solve some (but not all) of
  these problems but may not actually be associated
  with better outcomes

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The Premier Demonstration

• 34 measures
• Uses a relative (competitive) performance
  standard of performance, rather than performance
  against fixed standard or improvement
• Upside -- 1 or 2 bonus if in top or second
  decile of performance. Theoretically, low
  performers could lose 1-2.

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Premier Demo First Year Findings

• Performance on aggregate quality measures
• CHF 65 to 74
• AMI 87 to 91
• CAP 69 to 79
• CABG 85 to 90
• Hip/knee replacement 85 to 90

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Peterson et al., JAMA, April 26, 2006

• For acute coronary syndromes, a significant
  association between care processes and outcomes
  was found, supporting the use of broad,
  guideline-based performance metrics as a means of
  assessing and helping hospital quality.

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Bradley et al., JAMA, July 5, 2006

• The publicly reported AMI process measures
  capture a small proportion of the variation in
  hospitals risk-standardized short-term mortality
  rates
• In fact, explain only 6 of the variation

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Werner and Bradlow, JAMA, Dec 13 , 2006

• Hospital performance measures predict small
  differences in hospital mortality rates. Efforts
  should be made to develop performance measures
  that are tightly linked to patient outcomes.
• The study used Medicare Hospital Compare measures
  for AMI, CHF and pneumonia

18
Lindenauer et al., NEJM, Feb 1, 2007

• Hospitals engaged in both public reporting and
  pay for performance achieved modestly greater
  improvements in quality than did hospitals
  engaged only in public reporting.
• After adjustments, the incremental effect of
  financial incentives amounted to 2.6-4.1 over 2
  years.

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Medicare Improved Quality and Provider Payments

• Title 1 of the Tax Relief and Health Care Act of
  2006 passed in lame duck session
• Freezes payment rates for 2007 (no 5 cut)
• Sets up a Quality Reporting System
• Bonus Incentive Payments for 2007 up to 1.5
  more on claims on which quality is being measured

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MIQPP (cont.)

• Voluntary Reporting July 1 Dec 31, 2007 on
  measures developed or in process, with various
  deadlines for measures during 2007
• Establishes a 1.35 billion fund for 2008 for
  physician assistance and quality initiative
  with discretion for the Secretary of DHHS to
  decide how to spend

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Physician Voluntary Reporting Program Quality
Measures

• 66 measures as of Jan 1, 2007 -- examples
• HgbA1c control in types 1 and 2 diabetes
• BP control in types 1 and 2 diabetes
• Timing of prophylactic antibiotics before surgery
• Counseling self-examination for melanoma
• ECG for non-traumatic chest pain

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How Valid A Snapshot of Quality Are These
Measures?

• A new MedPAC analysis suggests that for most
  specialties, a few diagnoses or treatment
  episodes account for relatively few of the
  conditions the specialty cares for
• And that analysis still relates only to clinical
  measures does not attempt to capture other
  important attributes of professionals that
  patients (and professionals) care about

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The Ideal Measure Is

• A process measure that is a valid and reliable
  surrogate for outcomes, e.g., Hemoglobin A1C in
  diabetes
• P4P needs to accept the fact that relying on
  administrative data, we do not have and will not
  have good measures for much (most) of what we
  would like to measure, at least without EHRs
• Legislation requiring development of new measures
  will not change that reality

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Are Episode Groupers Ready for Broad Adoption, as
in Medicare?

• May be a useful tool to assess practice
  efficiency when used by a private plan but
  Medicare is necessarily held to a higher standard
  many concerns persist
• MedPAC analysis suggests ongoing potential but
  ongoing questions of validity, e.g., that Miami
  physicians look less costly than Minneapolis ones
  for CAD

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In short,

• We need to carefully develop criteria for
  opportunistically and strategically using P4P,
  and not overload it with expectations of
  transforming the health care system

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Attributes of Measures for P4P

• Important
• Deficiencies in care
• Valid
• Validated
• Actionable
• Data readily available
• Not easily gameable a/o amenable to audit

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Strategic Issues in Selecting P4P Opportunities

• Are marginal rewards (penalties) enough?
• Do marginal rewards conflict with incentives in
  underlying payment stream?
• Are the costs of improvement manageable?
• Are there opportunity costs of focusing on P4P?
• Should the focus be attainment or improvement?
• Are there likely, unintended consequences?
• Are there other strategic considerations?

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So Where Should We Do P4P?(on a 0-5 scale)

• Dialysis Centers 5
• Medicare Advantage Plans 4
• Hospitals 3
• Primary Care Physicians 2-3
• Most Specialists 1

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Transparency

• Essential for those endorsing a more active
  consumer-driven health system one that includes
  comparison of quality and price across providers
  so that consumers can make informed decisions
  about what provider to use and what services to
  obtain.

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Transparency Also Tries to Achieve Three Goals

• Help providers improve by benchmarking
• Encourage payers to reward quality and efficiency
• Help patients make informed choices about their
  care
• - Colmers, Public Reporting and Transparency,
  Jan 2007, Commonwealth Fund website

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The Administrations Initiative

• President signed executive order in Aug, 06,
  directing all federal agencies to implement
  programs to measure and report quality and cost
  to beneficiaries of federal health programs
• Also, ordered to disseminate information on
  overall costs of services for common episodes of
  care and for chronic diseases

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CMS Transparency Activities

• Pilot program in six locations of sharing data
  with private plans and purchasers
• CMS in 2006 began posting information on 30
  common elective procedures and other hospital
  admissions on its web site.
• Also, payment information available
• And, of course, part D drug pricing information

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States and Private Plans Are Publishing Price
Information

• Yet, anecdotal findings suggest that low cost
  hospitals seek price increases when they see
  their competitors prices
• Some antitrust experts believe that secret
  discounts tend to hold prices down FTC has
  testified against legislation that would require
  disclosure of drug rebates from manufacturers to
  PBMs
• -- Ginsburg, Health Affairs, Feb 6, 2007

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Tu and May, Health Affairs, Feb 7, 2007

• Even for services that are entirely self-pay and
  are thought to be models for consumer shopping,
  transparency does not seem to help.
• Experience with LASIX, dental crowns, and other
  self-pay procedures reveals key barriers to
  robust consumer price shopping

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A Contrarian Viewpoint on P4P and Transparency

• Good measures give a limited snapshot of
  performance yet, moving to comprehensive
  measures is a fools errand at least until we
  have robust, electronic health records
• Because health care markets do not act normally,
  P4P and transparency more generally may not
  achieve goals some have for them and in some ways
  would make things like costs -- worse

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Contrarian Views (cont.)

• Of all parties in health care, consumers may be
  in the weakest position to demand greater quality
  and efficiency
• Neither P4P nor transparency should be viewed as
  transformational
• We should proceed with both concepts
  strategically and not to support an ideology