Pay-for-performance Featured

6:42am EDT January 31, 2006
Studies have shown that incentives can have a positive effect on performance, producing quality outcomes and improving productivity. Although performance incentives have been an integral part of the business community for many years, the health care industry has been slower to embrace them as a way to improve the quality of our health care system.

The good news is it’s becoming much more commonplace for health plans and payors to provide financial incentives to physicians and hospitals for meeting specific performance criteria for clinical quality. Pay-for-performance programs use evidence-based medicine and national clinical guidelines as their performance benchmarks.

Some people question why physicians should be paid incentives to perform at the level one would expect as a given from such highly trained and skilled professionals. Although physician incentive programs assume high-level medical competence, the aim is to help physicians become even better at following clinical guidelines and achieving optimal clinical outcomes.

Traditionally, physician reimbursement has been reflected in the volume and/or intensity of services offered, not necessarily on the quality of care. Today’s realignment of incentives to clinical performance measures can reduce direct costs to employers, health plans and payors by improving medical outcomes.

As employees become healthier, employers stand to realize reductions in indirect costs as well, because they will see less absenteeism, less presenteeism and increased productivity within their work force. Employees benefit from access to higher quality health care and improved health overall.

Because health plans see a macro-view of patient care through claims data, they are in a unique position to help physicians meet performance measures in specific clinical areas. These include essential preventive care services, such as mammograms, pap smears and immunizations, as well as care that focuses on evidence-based management of chronic diseases like asthma and diabetes.

Performance programs generally have several components, which may include:

  • Incentive payments for primary care physicians (PCPs) based on individual performance

  • Support systems to provide information to PCPs to help improve performance

  • Concurrent programs within health plans that reinforce and support performance improvement

Many health plans, for example, collaborate with physicians in their efforts to encourage patients to obtain needed tests to emphasize early disease detection. The use of reminders is a good way to do this. Reminders also make it easier for physicians to follow evidence-based clinical practice guidelines, which help lower medical costs by helping people get the proper care at the proper time.

Physicians can receive customized health care reminders and mailing labels from their health plans highlighting patients who are due for tests. Physicians then send the reminders to these patients, along with any necessary requisition forms.

These support systems have encouraging data. Nationally, quality incentive programs have helped improve HEDIS (a tool used by health plans to measure performance on important dimensions of care and service) clinical quality scores.

National Quality Forum President and CEO Kenneth Kizer notes, “While pay-for-performance is still in its infancy as a common method of payment for healthcare; conceptually, it makes sense, as opposed to the current payment system in which one gets paid for units of service delivered, regardless of whether the service is truly needed or whether it is provided in a quality manner. Quite simply, if you want higher quality and more efficient physician services, then payment needs to be aligned in a predictable way with this goal.”

Gilbert Burgos, MD, MPH, CPE, is chief medical officer for Care Choices, a nonprofit health care organization and a subsidiary of Trinity Health. Care Choices HMO is ranked as No. 7 among 257 commercial plans nationwide and is the top-rated plan in Michigan, according to U.S. News & World Report/NCQA “America’s Best Health Plans, 2005.”