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Are doctors 'getting' pay for performance?

John Andrews, Contributor

AS IDEAS GO, pay for performance is a simple one – using a financial reward to inspire high quality patient care. Implementing it throughout a healthcare organization, however, is proving to be another story.

While observers report an abundance of successful examples and express confidence that there will be plenty more to come, P4P (as it’s commonly known) is still facing an uphill climb, especially with regard to the physician buy-in that is always so critical to any new administrative program’s success.

“Overall, the response to P4P has been positive, but there are mixed feelings out there,” said Omid B. Toloui, consultant with Los Angeles-based Sinaiko Healthcare Consulting. “The program is evolving and inevitable, but objections are multi-faceted. The naysayers object to the added administrative burden; they say the bonuses aren’t large enough to change physician behavior and that there are too many metrics involved.”

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The inspiration for the P4P movement comes from an Institute of Medicine report titled “Crossing the Quality Chasm: A New Health System for the 21st Century,” which concluded that monetary incentives are an effective means for healthcare systems to spur higher quality care, more accountability, fewer errors and standardized practices.

Advocates of P4P maintain that the critical link to achieving those laudable goals is using concrete data generated by IT system metrics to quantify and report each provider’s quality of services. Electronic medical records – which hold a wealth of patient data – are seen as the cornerstone of the P4P process.

“Across the gamut of P4P systems, two main types of incentive payments prevail – bonuses and withholdments,” Touli stated in a recent white paper he co-authored with colleague Mikele M. Bunce. “Bonuses are typically paid on an annual basis based upon a set of criteria with relative weights, such as clinical performance, patient experience and IT investment. The other less common withholdments are characterized by a monetary reduction of a certain amount from a standard payment.”

Both CMS and commercial payers are taking steps toward physician quality reporting, Touli says, “which shows that P4P is not merely a trend, but an evolving process that has the potential to improve quality in the modern healthcare system.”

“As greater investment is made in these systems, it is increasingly important to examine the advantages and disadvantages of the way in which incentive payments are distributed to providers and the methods for effectively distributing the payments,” he said.

From the payer’s perspective, the provider community has a lot of issues to work out before P4P becomes mainstream, notes Mike Flanagan, vice president of products and marketing for Blue Bell, Pa.-based Portico Systems.

“There are quite a few P4P programs out there that are demonstrating cost efficiency and quality outcomes, so progress is being made,” he said. “But there is tremendous variation in the approaches and indicators as well as administration of the program. There is a lack of standardization, varying degrees of collaboration between health plans and providers and … varying levels of trust.”

To make greater strides, Flanagan said, both sides have to find common ground on the technical building block of P4P and focus on achieving three main goals: Creating a data repository that is valid, accurate, consolidated and interoperable; developing a provider scorecard using data mining and benchmarks; and making the scorecards transparent so that results are presented to providers in a timely, accurate and secure fashion.

“We’re an enabler from the medical technology perspective – we are a technical tool to help (providers and payers) meet business challenges,” he said. “We know about the indications of P4P. It comes down to collaboration between the parties, which generates trust in the program.”

Meridian Health, a New Jersey network of three hospitals and other medical facilities, is gradually working through a P4P implementation, though Senior Vice President David Siegel, MD, says it’s a day-to-day process with an open-ended deadline.

“We saw this train coming down the track years ago,” he said. “When the government decided they would start along this path, it indicated that we had to do something.”

At this point, health system leaders are encouraging their physicians to participate in CMS’ Physician Quality Reporting Initiative, a voluntary quality reporting program that establishes financial incentives for medical professionals. The hope is that PQRI will serve as an effective warm-up exercise, making doctors more comfortable with the P4P process.

“Physician buy-in is critical,” Siegel said. “It is a hurdle that must be cleared before we can proceed. We have spoken to them about collecting data and reporting it. But we can’t do it for them. Ultimately it is up to them.”