PayforPerformance: A Decision Guide for Purchasers

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Pay-for-Performance A Decision Guide for
Purchasers

• Guide Prepared for
• Agency for HealthCare Research and Quality
• U.S. Department of Health and Human Services
• Prepared by
• R. Adams Dudley, M.D., M.B.A.
• University of California San Francisco
• Meredith B. Rosenthal, Ph.D.
• Harvard School of Public Health

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Pay for PerformanceA Decision Guide for
Purchasers

Electronic Copy of Guide and other AHRQ P4P
Resources http//www.ahrq.gov/qual/pay4per.htm
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Overview

• Not a users manual too little data
• Addresses
• Developing an overall strategy
• Incentive design and measures selection
• Implementation
• Evaluation and revision

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Is Our Community Ready?

• Do we know what we are trying to accomplish?
• Do we have enough influence?
• Are the providers ready?

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Strategic Issues Getting Started

• Voluntary vs. mandatory
• Voluntary easier, may only attract
  high-performing providers
• Mandatory (i.e., written into all contracts)
  creates uniform incentives, but may need high
  market share
• Bonus program is in between mandatory, but
  providers are free to ignore it
• Phasing in start with volunteers, or pay for
  participation/pay for reporting

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Strategic Issues Getting Started

• Which providers to target?
• Hospitals and/or physicians
• Large vs. individual/small group
• Contribution of hospitals vs. physicians to
  quality and cost varies from region to region
• Measurement issues favor larger groups but
  incentives may be stronger for individuals
• System view of quality improvement suggests
  higher level
• Choose the provider target for which you can get
  the biggest bang for your buck

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Increasing Inclusion of Specialists and Hospitals
in Pay-for-Performance
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Choosing Measures

• National measure sets should be considered first
• Tested
• Accepted
• Already being collected
• Some sources AHRQ (Inpatient Quality
  Indicators), National Quality Forum, Hospital
  Quality Alliance, Ambulatory Care Quality
  Alliance, NCQA, Leapfrog Group

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Incentive Design Challenges

• All P4P programs are not the same
• Design choices matter
• First critical question is orientation
• Quality improvement across all providers,
  patients?
• Rewards for the best only? E.g., Premier Inc./CMS
  demonstration

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Explicitly or Implicitly Rewarding Quality
Improvement

• P4P programs that reward top group (e.g., 20) or
  set a benchmark for reward that all must meet do
  not uniformly encourage improvement
• These features should result in more QI
• Rewarding improvement explicitly (i.e. change
  rather than/in addition to level)
• Multiple levels of rewards (partial credit)
• Payments tied to each patient treated well

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Case Example Hudson Health Plan Rewarding
Quality Diabetes Management
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Key Design Issues How Much Money?

• To be effective, bonus should be commensurate
  with cost of effort
• Little good information about what it takes to
  reach quality targets
• Most P4P programs for physicians 5-10 of
  associated fees hospitals 1-2

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Planning Ahead for Evaluation

• You spent all that time and moneyshouldnt you
  assess what you accomplished?
• Aspects of implementation can facilitate
  evaluation
• Collecting data during a measurement (i.e.
  non-payment) year will allow before/after
  comparison
• Implementing P4P for some providers before others
  may create a natural comparison group

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What Types of Effects to Look For

• Data collection should not only track intended
  consequences but also monitor potential side
  effects
• Patient selection/dumping (changes in case-mix,
  excessive switching)
• Diversion of attention away from other important
  aspects of care
• Widening gaps in performance between best and
  worst

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Summary

• Pay-for-performance can facilitate improved
  patient care, cost-efficiency
• Best practices still unknown
• Careful matching of goals and mechanisms will
  most likely lead to best results
• In light of uncertainties about design,
  evaluation is key