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Pay-for-Performance: Faults in Concept or Implementation?

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This is the second installment of our look into P4P.

While the earlier piece "Pay-for-Performance: The Good, The Bad and The Ugly" reviewed the driving forces and some DO's and DON'Ts of P4P programs it did not go in details to address the critics.

So what are they saying and is there a merit to their arguments?

Managed Care Matters has a nice roundup, summarizing the challenges of P4P, as it is currently practiced: "Pay for Performance - does it work?", based on a recent JAMA / Commonwealth Fund study. To boil down their main point is that P4P improves the quality of care only marginally, mainly for docs with room to improve and that extra pay is "not justified by improvement".

Does it mean P4P is a flawed, unworkable concept? Not really.

Aside from the fact that JAMA is expected to provide scientific air cover to the political agenda of its AMA parent, here is the list of the issues that the study does not pay enough attention to:

  1. Selection: Most of the existing P4P programs are voluntary. Why would providers join if they are not expecting a bonus?
  2. Causation: Physicians with lower initial scores improved. One can argue if "the program did it", but it clearly provided a push.
  3. Support: How can we expect P4P to drive change, without EMR tools to support it? Most existing programs only do monitoring.
  4. Duration: The study tracked physician's progress for a little over 2 years. Can this really represent a long-term systemic effect?
  5. Differentiation: Is it OK to send a message that all providers should be the same? Do we live in Lake Wobegon?

Joe Paduda of Managed Care Matters points out that "simply finding the best docs and sending patients to them strikes me as the smartest, and easiest, thing to do". That is a good approach for individual payors, which in any case has the effect of rewarding the performers with the referrals. The problem is that everyone is fishing in the same pool.

However, a real systemic quality improvement is hard to imagine without incentives, created by P4P. But the programs have to grow up from monitoring to active support and intervention.

The key is integrating Pay-for-Performance with EMR from the get-go.

UPDATE: In the final part of our P4P series, we discuss how American College of Physicians plans to do just that: "ACP Proposes a Reasonable Approach"

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Submitted by Online Business Ideas (not verified) on Mon, 03/12/2012 - 12:14am.

There are other lots of information that can be gathered in different places.

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