Unbiased Analysis of Today's Healthcare Issues

Does the Frequency of P4P Evaluations affect Performance?

Written By: Jason Shafrin - Dec• 02•10

“Reinforcement theory from psychology literature suggests that changing behavior by incentives is easiest when the linkage between behavior and incentive (or positive reinforcer) is clearest, and the reinforcers are placed in routine. ”  Does that mean that more frequent P4P evaluations and payments are optimal?  More frequent physician performance payments increase administrative cost, but may be worthwhile if this quality measure system improves performance.

A paper by Chung et al. (2010) aims to verify if physicians respond better to more frequent incentives.  The authors randomized assign physicians at the Palo Alto Medical Clinic (PAMC) of the Palo Alto Medical Foundation (PAMF) to two groups.  The first group received quarterly P4P bonuses and the second group received annual P4P bonuses.  Both groups, however, received reports evaluating their performance on a quarterly basis.

The authors found no difference between the quarterly and annual payments.  One could explain these findings a number of ways.  First, it could be the case the the frequency of payment does not matter.  On the other hand, it could be that the frequency of payment matters, but the change in physician performance over time was so small that the payments themselves had little effect.  For instance, if factors such as patient adherence matter more than physician actions, then the frequency of P4P payments will matter little.  It could also be the case that it is not the frequency of payment that matters, but the frequency of reporting.  Finally, the reporting could be too high level.  If physicians receive insufficient detail of how they performed at a patient level, it will be difficult for them to understand why they received the score they did.  Thus, although this study finds that payment frequency does not affect performance, I remain unconvinced that payment and/or reporting frequency does not affect physician responses to quality evaluations.

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  2. […] turns to how to finance these approaches. One oft-mentioned mechanism is pay for performance. Jason Shafrin of the Healthcare Economist takes a look at an interesting study that examines whether the […]

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