Unbiased Analysis of Today's Healthcare Issues

Archive for the 'P4P' Category

Which value-based payment system is best?

Clearly, there is no single answer to this question and the answer depends on a number of factors including the market structure, provider responsiveness to intrinsic vs. extrinsic motivation, provider sample size, and the ability to accurately measure quality of care.  Douglas Conrad (2015) uses agency theory to provide an overview of existing value-based payment systems.  The […]

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Synthetic Control Method

A common method for measuring the effect of policy interventions is the difference in difference (DiD) approach.  In essence, one examines the change in outcomes among observations subject to the policy intervention and compare them agains observations that were not eligible for the policy intervention. A key assumption for this approach to be valid is […]

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What is MACRA?

MACRA is the Medicare Access & CHIP Reauthorization Act, also know colloquially as the ‘permanent doc fix’.  Although MACRA is know for repealing the Sustainable Growth Rate (SGR) provisions that would have significantly cut physicians salaries (but was reversed every December), there are other provisions. Although physicians may take comfort in avoiding the year end doc […]

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The end of dose-based drug pricing?

A Health Affairs post by Dana Goldman and Darius Lakdawalla argues that dose-based pricing for pharmaceuticals is suboptimal.  They make a clear distinction between typical goods, where cost and benefits are roughly proportional to quantity consumed, and pharmaceuticals. Buying two bunches of bananas naturally costs twice as much as one bunch. Twice as many bananas can […]

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What is MIPS?

Yesterday I posted about MIPS, the new Medicare physician reimbursement program set to begin in 2019.  The Health Affairs blog provides a nice summary of some of the changes. First and probably most importantly, the formulaic approach to setting base payment rates is gone, replaced with automatic increases for all doctors from 2015 through 2019. For […]

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Medicare to Pay for Value

I have spilled much ink on this blog discussing the pros and cons of pay-for-performance approaches to medicine.  Incentivizing high quality care is good in theory, but in practice changes in quality have been modest and providers may be able to readily game the system.  Despite these challenges, Medicare announced this week that it would being  tying 30 […]

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Trends in Value-based reimbursement

A McKesson study cites 7 trends in value-based reimbursement: Rapid adoption of VBR. About 90% of payers and 81% of providers are already using some mix of value-based reimbursement (VBR) combined with fee-for-service (FFS). Collaborative regions are more aligned with VBR. Collaborative regions, where one or two payers and providers stand out, are more aligned […]

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Will P4P work?

In pay-for-performance (P4P) or value-based purchasing (VBP) schemes, health care provider reimbursement rates depend on performance. Physicians can receive bonuses for following best practices, and hospitals can increase reimbursement rates from Medicare if they improve clinical processes and patient satisfaction. As an economist, rewarding good performance with financial payments makes perfect sense. Or does it? […]

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Did Hospital VBP work?

How can Medicare improve quality and reduce cost? One idea is to introduce value-based purchasing (VBP). For instance, Medicare’s hospital value-based purchasing (HVBP) system increases payment rates for hospitals that demonstrate high quality. A paper by Ryan et al. (2014) explains the program in more detail. Under HVBP, acute care hospitals—those paid under Medicare’s Inpatient […]

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P4P in the UK

General Practitioners (GPs) in the UK NHS are paid a mixture of capitation, lump sum allowances, and a pay-for-performance bonus. The P4P element, the Quality and Outcomes Framework (QOF), rewards GPs according to their performance on a large number of indicators. QOF payments represented up to 20% of GPs ’ income in the first year […]

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