The concept of Pay-for-Performance (P4P) has a mixed reputation in the provider community. The vigorous efforts of the Federal government to adopt it in Medicare are causing a lot of friction.
What are the real issues here and what could be the solutions?
Without a question, the frustration of employers, government and general public with rising healthcare costs has reached a boiling point. Few people would argue that our system has few controls to reduce over-utilization, which does not necessary lead to better outcomes: "More Treatment Does Not Improve Care for Chronically Ill, Study Finds".
Of course one man's cost is another man's revenue.
The question is who gets to have this revenue and why. Our pay-by-volume system pays all providers equally. Many would like to keep it this way. But a growing number of physician organizations is starting to recognize that the best way to run a successful practice is to increase quality and demand increased reimbursement.
With this in mind, what are the choices in P4P-land?
THE GOOD: P4P programs driven by providers and designed based on realistic ability to implement. An example is the asthma care program of Children’s Mercy Hospital and Clinics in Kansas City, MO. According to Mercy's Laura Benko "we will be replacing sick dollars with well dollars” (Modern Healthcare, p. 6-7, November 28, 2005).
THE BAD: Providers not taking a lead means leaving the health plans, government and employers in charge. With frustrations over our system as high as they are, derailing the momentum of P4P movement is easier said than done. Consequently, being left out would mean having to deal with unpalatable changes forced down provider's throats.
THE UGLY: That is what we have right now. Costs are rising, quality is not rewarded and what is the only outlet for grievances? That is right, malpractice lawsuits that usually turn ugly, indeed. So now, instead of a continous and predictable P4P scale, doctors are judged as either 100% qualified or 100% criminal. This is not fair to anybody.
Defining "the good" P4P systems will take time. The best way for physicians to safeguard their interests is to take a lead.
UPDATE #2: Jacob Reider highlights another physician organization that "gets it": National Physicians' Alliance.
UPDATE #3: P4P Series, Part 2: Responding to common P4P criticism: "Pay-for-Performance: Faults in Concept or Implementation?"
UPDATE #4: P4P Series, Part 3: Highlighting THE GOOD adopters: "American College of Physicians Proposes a Reasonable Approach".