Designing and Implementing Pay-for-Performance Programs: Ongoing Challenges

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Designing and ImplementingPay-for-Performance
Programs Ongoing Challenges

• Gary J. Young, J.D., Ph.D.
• Boston University
• Presentation for AHRQ Annual Meeting
• Session on How Pay-for-Performance Fits with a
  Value Agenda
• September 28, 2007
• Financial support from Agency for Healthcare
  Research and Quality Robert Wood Johnson
  Foundation

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P4P Will it Work?

• Recent evidence points to modest gains from P4P
  in terms of provider adherence.
• Selected Findings
• Rosenthal et al. (2006) Relative increase of 3.6
  percentage points for cervical cancer screening
• Levin-Scherz et al. (2006)
• Relative increase of 2-19
  percentage points for diabetes measures
• Lindenauer et a. (2007) CMS Premier
  demonstration Relative increase of 2.6
  percentage points for AMI measures 3.4 points
  for pneumonia measures 4.1 points for heart
  failure measures.
• Young et al. (2007)
• Absolute increase of 7 percentage points for
  diabetes measure (e.g., eye exam)

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Key Challenges

• Provider Engagement
• Unit of Accountability
• Quality Measures
• Provider Capability
• Incentive Structure
• Data Systems and Measurement
• Unintended Consequences

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Supporting Research

• 7 Demonstration Sites Rewarding Results
• Surveys of Physicians (over 4000 surveyed
  approximately 1500 responses)
• Interviews with over 60 Senior Managers
• of Physician Organizations
• Focus Groups with Providers and Payers
• Site Visits to Provider Organizations
• Findings of Other Researchers

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Provider Engagement

• Physicians appear comfortable with the concept of
  P4P.
• --Strong preference for incentives linked to
  quality vs. utilization or productivity

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Survey Results
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Survey Results
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Provider Engagement

• Physicians do not appear to have a strong
  understanding of the P4P programs in which they
  participate. Conventional forms of communicating
  w/ providers appear inadequate (very Low
  physician survey scores regarding understanding
  of programs).
• Many physicians appear to feel disenfranchised.
  Physician involvement in program design can help
  secure buy-in (e.g., selection/modification of
  measures).

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Unit of Accountability

• Sponsors face difficult choices and possible
  tradeoffs between selecting individuals versus
  organizations.
• -- systems engineering vs. physician
  initiative
• -- stimulating investment in QI infrastructure
  vs. enhancing engagement of front-line
  providers.

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Quality Measures

• Physicians generally comfortable with
  standardized measures such as HEDIS and HQA.
• --Outcomes vs. Process Measures
• --Specialists and Non-Acute Care Settings

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Provider Capability

• Providers reveal anxiety about capabilities to
  perform well on quality measures.
• --Hospitals with well developed QI
  infrastructure appeared to have a distinct
  advantage in BCBSM P4P
• With limited provider capability, one-time
  performance gains may be common.
• --In some situations, learning goals should
  possibly precede performance goals

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Incentive Structure

• Both program sponsors and providers are divided
  on many issues regarding incentive structure.
• --Attainment vs. Improvement
• --Bonus only vs. Penalties (e.g.,
  withholds)

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Data Systems and Measurement

• Providers have strong concerns about data
  reliability and validity.
• --Claims vs. Charts (appeals process/reserve
  fund)
• -- Small Numbers (composite scores
• multi-payer initiatives)

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Unintended Consequences

• Physician surveys reveal no major concerns about
  UC.
• --Some studies outside healthcare point to
  negative impact on innovation.
• -- P4P in safety net settings may pose unique
  risks.

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Concluding Comments

• P4P can lead to gains in clinical quality, but
  the magnitude of the gains may be quite modest
  and time-limited, particularly without
  substantial improvements in provider
  infrastructure for quality measurement and
  improvement.
• Physicians do appear comfortable with P4P as a
  concept, but have certain concerns with the way
  P4P programs have been designed and implemented.
• Program sponsors face many daunting challenges in
  designing and implementing programs.