Paying for Quality in the UK: New Models

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Paying for Quality in the UK New Models

• Peter C. Smith
• Centre for Health Economics, University of York,
  UK

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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

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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.

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Incentives what are the rewards?

• Financial (individual)
• Financial (organizational)
• Professional advancement
• An easy time
• Freedom of action
• Prestige and perceived worth
• Intrinsic satisfaction

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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.

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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/
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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)

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GMS ContractIndicators and points at risk
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GMS Contract Clinical indicators
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Hypertension indicators, scale and points at
risk
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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).

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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).

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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

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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).

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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)

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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