Pay for performance in Medicare: MedPAC recommendations

1
Pay for performance in Medicare MedPAC
recommendations

• Karen Milgate, Research Director, MedPAC
• National Association for Healthcare Quality,
• Orlando, Florida
• September 20, 2004

2
Why are incentives important in Medicare?

• Current payment system is neutral or negative
  towards quality
• Beneficiaries are some of the sickest and most
  vulnerable
• Largest single purchaser

3
Current Medicare efforts

• Incentives
• Public disclosure
• Flexible regulation
• Demonstrations
• shared savings
• capitated disease management
• hospital pay for performance
• Other initiatives
• Feedback
• Identifying measures
• Creating standardized data collection systems

4
Considerations for Medicare

• Achievable through regulation or legislation
• Unintended consequences
• Risk-selection
• Access issues
• Crowding-out quality innovation

5
Private sector initiatives

• Studied 30 private sector quality incentive
  programs Most prevalent public disclosure and
  payment differentials for providers
• Many had achieved results
• Used as a negotiating tool

6
Criteria for quality measures

• Must be evidence-based to the extent possible
• Most providers must be able to improve upon the
  measures
• Robust risk adjustment
• Must have systems in place to collect data

7
MedPAC recommends

• The Medicare Advantage program and the End-stage
  Renal Dialysis program meet the criteria
• The Congress should establish a quality
  incentive payment policy for outpatient dialysis
  servicesand for all Medicare Advantage plans

8
Design options for incentives

• Define eligible recipients broadly
• Rewards based on both achievement of a goal and
  improvement towards a goal
• Financed with a small pool of total payments
• Include patient perception of quality

9
Assessing other settings

• Hospitals
• Some measures, no core set or collection tool
• Voluntary public disclosure measures meet many
  criteria
• Physicians
• Measures limited to certain conditions
• Hard to get enough patients and to broadly
  compare one practice to another

10
Improving care across settings

• Many beneficiaries receive care across settings
• Measure the contribution each setting makes to
  improving care
• Continuity index
• One condition and how each setting contributes
  within and across