Early Experience With Pay-for-Performance (from JAMA – subscription required)

Context The adoption of pay-for-performance mechanisms for quality improvement is growing rapidly. Although there is intense interest in and optimism about pay-for-performance programs, there is little published research on pay-for-performance in health care.

Objective To evaluate the impact of a prototypical physician pay-for-performance program on quality of care.

Design, Setting, and Participants We evaluated a natural experiment with pay-for-performance using administrative reports of physician group quality from a large health plan for an intervention group (California physician groups) and a contemporaneous comparison group (Pacific Northwest physician groups). Quality improvement reports were included from October 2001 through April 2004 issued to approximately 300 large physician organizations.

Main Outcome Measures Three process measures of clinical quality: cervical cancer screening, mammography, and hemoglobin A1c testing.

Results Improvements in clinical quality scores were as follows: for cervical cancer screening, 5.3% for California vs 1.7% for Pacific Northwest; for mammography, 1.9% vs 0.2%; and for hemoglobin A1c, 2.1% vs 2.1%. Compared with physician groups in the Pacific Northwest, the California network demonstrated greater quality improvement after the pay-for-performance intervention only in cervical cancer screening (a 3.6% difference in improvement [P = .02]). In total, the plan awarded $3.4 million (27% of the amount set aside) in bonus payments between July 2003 and April 2004, the first year of the program. For all 3 measures, physician groups with baseline performance at or above the performance threshold for receipt of a bonus improved the least but garnered the largest share of the bonus payments.

Conclusion Paying clinicians to reach a common, fixed performance target may produce little gain in quality for the money spent and will largely reward those with higher performance at baseline.

One underlying principle of the pay for performance movement stems from the belief that we can use incentives to improve adherence to evidence based quality indicators. The crux of evidence based medicine (EBM) follows from an examination of high quality data. EBM eschews belief.

This study tries to understand how P4P might influence physician practice. It finds no positive impact. Rather P4P may simply be a scheme for rewarding high performers.

Perhaps that is the desirable outcome. Perhaps P4P will just recognize those who already function at a high level.

However, as I hear the debate, most proponents see P4P as a means to improve quality. This article argues against that.

We must continue to collect data as we evaluate ideas, even if those ideas are compelling. Hopefully, politicians, insurers and organized medicine leaders will heed this study and others to follow. We do not need a “magic bullet” unless we can be certain that the magic bullet works.

I am currently listening to Freakonomics. While I have only listened to the first third of the book, one transparent message invokes the challenge of externalities. We must carefully understand how P4P will impact medical care delivery. To rush down this path without knowing where it goes seems unwise.

Related posts:

1. Berwick recognizes the problem, at least partly
2. Anonymous creates a strawman argument of P4P
3. Safety rather than quality
4. Can we measure quality?
5. Comparative effectiveness research – more thoughts

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