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Paying for Quality: Understanding and Assessing Physician Pay-for-Performance Initiatives
Published: December 19, 2007
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There is growing interest among private and public health care purchasers in using financial incentives to improve the quality of care delivered by physicians. The concept has gained traction as a way for purchasers to better align physician payment and quality of care delivered.
Past experience—including with managed care—has shown that financial incentives can be a powerful driver for physician behavior. To date, however, policy-makers have had little information on the effectiveness of pay-for-performance (P4P) initiatives in shifting physician practice. Policy-makers are interested in knowing to what extent and under what circumstances P4P will improve the quality of care delivered by physicians. This research synthesis and policy brief reviews the available evidence on this issue.
Key Findings:
- Many health plans now have P4P programs, but it is difficult to assess their growth and impact over time.
- New incentive programs are layered on top of existing payment approaches and, to some degree, seek to counter their incentives.
- Designing P4P programs raises several measurement issues including how to properly risk adjust, what kind of data to use, how to link patients to a "medical home" and how to account for patient non-compliance.
- Physicians support the concept of financial incentives for quality but have little confidence in the ability of payers to design and carry out a system that is fair and effective.
- Program evaluations of P4P all show improvement in one or more quality indicators, but it is difficult to disentangle the contribution of P4P from other quality improvement efforts.
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Charts, figures and photos
- Policy Brief Figure 1: Examples of P4P Measures Used By a Large HMO
- Policy Brief Figure 2: Key P4P Decisions: Implications and Examples
- Policy Brief Figure 3: Percent of U.S. Primary Care Physicians Facing Specific P4P Measures, 2006
- Research Report Figure 4: Decision Points in Designing P4P Incentives
Recommended
- Pay-for-Performance as a Method to Establish the Business Case for Quality (Journal articles)
- Provider Attitudes toward Pay-for-Performance Programs: Development and Validation of a Measurement Instrument (Journal articles)
- Does Pay-for-Performance Improve the Quality of Health Care? (Journal articles)
Pay-for-Performance as a Method to Establish the Business Case for Quality
By:
Wheeler JRC, White B, Rauscher S, Nahra TA, Reiter KL, Curtin KM and Damberg CL
Publication date:
June 2007
Summary:
One of the major reasons providers give for not implementing promising quality enhancing interventions, despite concerns about deficiencies in the quality of health care in the United States, is that no "business case" for quality has been made. This article...
Provider Attitudes toward Pay-for-Performance Programs: Development and Validation of a Measurement Instrument
By:
Meterko M, Young GJ, White B, Bokhour BG, Burgess JF, Berlowitz D, Guldin MR and Seibert MN
Publication date:
October 2006
Summary:
During the past five years, an increasing number of health plans and self-insured employers have instituted financial incentive programs, known as pay-for-performance (P4P). Efforts to evaluate these programs are now underway. In this study, researchers focused on...
Does Pay-for-Performance Improve the Quality of Health Care?
By:
Petersen LA, Woodard LD, Urech T, Daw C and Sookanan S
Publication date:
August 2006
Summary:
Most physicians and hospitals are paid the same regardless of the quality of the health care they provide, but increasing numbers of health programs link payment to physician and hospital performance as an incentive to improve the quality of care. This study...
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