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Physician Perspectives on Pay-for-Performance

January 26, 2011 in P4P, Quality | No comments

Survey Results

A 2004 poll of a sample of 400 randomly selected physicians found the following:

  • 71% of physicians supported payments based on the quality of care they provide,
  • over 60% of physicians thought that hospitals should also be paid based on the quality of care they provide,
  • Almost 90% of physicians thought that the current reimbursement system did not reward them for providing high-quality care, and
  • 62% supported public access to information about the quality of care they provide.

Quotation #1: Changing Perspective on P4P

“When I started my career in the late 1970s as an academic internist and geriatrician, I was skeptical of pay-for-performance, feeling that standards of care could not accurately assess the real benefits of my care of my frail elderly patients with multiple impairments. I still feel that way today because despite the rapid growth of the evidence base, we continue to measure relatively simple aspects of the process of care rather than measuring outcomes. I also felt then that pay-for-performance was a thinly veiled effort to increase efficiency rather than quality. Subsequent experience as the leader of a large academic health science center and as chief executive officer of a major health insurer has led me to believe that pay-for-performance holds substantial potential for enhancing quality of care.”

  • John W. Rowe, MD

    Quotation #2: The Problem of Complex Patients

    “Should metrics be simple or complex? Most current standards are simple. They state a basic clinical service that all patients with a certain condition should receive, such as prescription of β-blockers after myocardial infarction. Approximately 5% of patients are responsible for 50% of health care costs. They are typically complex. Therefore, we need standards to evaluate management of patients with chronic disease and multiple comorbid conditions. To achieve this goal, we will need a much richer evidence base than is currently available.”

    • John W. Rowe, MD

    Source: John W. Rowe, MD. Pay-for-Performance and Accountability: Related Themes in Improving Health Care. Ann Intern Med. 2006;145:695-699.

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    Value-Based Purchasing in Nursing Homes

    December 13, 2010 in Medicaid, Medicare, Nursing Homes, P4P | 1 comment

    More than 3 million frail and disabled individuals rely on nursing home services in any given year.  About half of these individuals consider the nursing home to be their primary place of residence.  Nursing home quality, however, has often been called into question.

    Some experts believe pay-for-performance schemes will improve nursing home quality.  Today, I will review previous efforts to improve nursing home quality though P4P.

    Briesacher et al. (2009)

    A paper by Briesacher, Field, Baril and Gurwitz review P4P in nursing homes in a variety of states.   The authors note that “Approximately one-half of all Medicaid Programs currently operate some type of pay-for-performance program, and 85 percent have plans to do so within 5 years.”  This report consider nursing home P4P programs in: California, Colorado, Florida, Georgia, Illinois, Iowa, Kansas, Massachusetts, Minnesota, Ohio, Oklahoma, Texas and Utah.

    Measures considered include:

    • Clinical Measures (e.g., pressure sores, use of physical restraints, pain management, quality of life, MDS indicators, state-developed CAHPS measures, care plans)
    • Satisfaction Levels (e.g., patient, family, employees)
    • Structural Measures (e.g., nursing retention, staff turnover, occupancy rates, special licensure, state survey compliance, staffing hours/ratios)
    • Cost (e.g., Medicaid utilization, administrative costs, efficiency)
    • Pressure sores,
    • Use of physical restraints,
    • Pain

    Bonuses were paid depending on whether the nursing homes surpassed some threshold of these quality measures.  Some of the bonuses were paid as a flat rate ($3/day in Ohio and $0.50-$0.0 in Utah) and other used a percentage increase (up to 2.4% in Minnesota, 1%-3% increase in Iowa).  The highest bonus paid was 5% of per diem reimbursement where the lowest bonuses were $0.25.

    “We found little empirical evidence that pay-for-performance programs increase the quality of care of residents or the efficiency of that care in nursing homes. However, the program set in San Diego did find benefits, and it used the strongest of all evaluation designs, a randomized control design.” The San Diego RCT randomized nursing homes into treatment and control groups and gave the treatment groups incentive payments for: (i) accepting patients needing the most functional assistance, (ii) improving patient functional status, and (iii) prompt discharges of patients who remained out of the facility for at least 90 days.

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    Evaluating VBP Programs

    December 8, 2010 in P4P | 2 comments

    The call for the adoption of value based purchasing programs has gained in popularity in recent years.  These programs give physicians, hospitals, or other providers bonuses (or penalties) depending on the quality of care their patients receive. The Affordable Care Act (ACA a.k.a Health Reform) includes provisions to establish a VBP program for hospital payments based on hospital quality reporting; a national, voluntary, 5-year bundled payment pilot program; and a new payment structure for providers organized as accountable care organizations.

    Despite their popularity, evaluating the health outcomes or even documenting the processes required to produce positive health outcomes is difficult.  As these new VBP programs come online, it will be increasingly important to evaluate these demonstrations and identify best practices.  A paper by McHugh and Joshi (2010) makes some recommendation on how to improve evaluations of value-based purchasing programs.  A summary of their recommendations are below.

    Problem Recommendation Focus Target Audience
    Limited information on implementation and management of VBP programs Early and continuous collection of data on implementation Methods, infrastructure support Researchers, policymakers, providers
    Limited generalizability of findings More experimentation and greater variation in VBP Data, methods Researchers, policymakers, providers
    Lack of meaningful outcome measures Improved methods for risk adjustment, data validation, and measurement composition Data, methods Policymakers, providers, researchers
    Lack of integrated and aggregated data Support for EHR and HIT systems Infrastructure support Policymakers, providers
    Limited ability to synthesize learning from diverse VBP efforts Better practices and methods for synthesizing VBP program findings Methods, infrastructure support Researchers, policymakers, providers

    Most of these recommendations are sensible.  For instance, including data ‘checks’ to ensure valid collection of data would be useful.   Some suggestions, however, are more controversial.  In particular, the authors ask for “more experimentation and greater variation in VBP.”  Experimentation involves a tradeoff, however.  If I was a patient at a hospital under a VBP system, I would hope that the VBP program would be optimized given the current state of knowledge.  Experimentation could of course produce a superior system, but it could also create a worse one.  Thus, although increasing variation in VBP implementation would help researchers learn more and better understand if and under what circumstances VBP works, payers have a duty to make sure patient care is also optimized in the short-run.

    The authors give the example of Geisinger Health System’s ProvenCare which offers a single-episode price for CABG surgeries.  Geisinger’s integrated health system likely contributed to the success of this program.  In more decentralized health systems, should the goal be to implement a ProvenCare replica to see if it works in other settings or to design a VBP that is more tailored to the needs of the specific patients and providers it serves.  I’d tend to side with the latter strategy.

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    Medicare Hospital Value-Based Purchasing

    December 7, 2010 in Hospitals, P4P, Quality | 4 comments

    The Health Reform (ACA) legislation mandated Medicare establish a hospital value-based purchasing (VBP) program by 2012.  In fact, the Deficit Reduction Act of 2005 already authorized Medicare to develop a plan to implement VBP for 2009.   How will they do this?  A CMS report from 2007 sheds some light on the topic.

    Since 2005, Medicare began the Reporting Hospital Quality Data for Annual Payment Update (with the incredibly unintelligible acronym of RHQDAPU).  RHQDAPU at first just required hospitals to report quality measures.  The Health Reform VBP initiatives, however, will begin to pay hospitals based on their performance on these metrics.  The 2007 CMS report claims that any VBP plan should contain the following 7 components.

    1. A Performance Assessment Model that is used to score a hospital’s performance on a specified set of measures, generating a Total Performance Score for each hospital.
    2. Translation of the VBP Total Performance Score into an incentive payment.
    3. A measure development process, including selection criteria for choosing performance measures for the financial incentive, and candidate measures for VBP Program start.
    4. A phased approach to transition from RHQDAPU to VBP.
    5. Redesigned data submission and validation infrastructure to support the VBP Program requirements.
    6. Enhancements to the Hospital Compare website to support expanded public reporting of performance results.
    7. An approach to monitoring VBP impacts, including potential impacts on health disparities.

    Below I discuss aspects of hospital VBP in more detail.

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    Does the Frequency of P4P Evaluations affect Performance?

    December 2, 2010 in P4P, Quality | 2 comments

    “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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    VBP Design Choices

    November 8, 2010 in P4P, Quality | 3 comments

    “Pay-for-performance (P4P) is one of the primary tools used to support healthcare delivery reform. Substantial heterogeneity exists in the development and implementation of P4P in health care and its effects.” Today, I review a paper which summarizes evidence, obtained from studies published between 1990-2009, concerning P4P effects.

    Measure Effectiveness

    Which types of measures produce the biggest change in physician behavior. The authors’ literature review reveals the following:
    “The effect of P4P on non-incentivized quality measures varied from none to positive.  However, one study reported a declining trend in improvement rate for non-incentivized measures of asthma and CHD after a performance plateau was reached.”

    In addition, process measures were more effective in changing physician behavior than outcome measures. Intermediate outcome measure effect of provider behavior was between the process and pure outcome measures. Among these measure types, programs where providers were involved in the VBP implementation lead to larger gains in outcomes. The authors do not mention if this was because of easier-to-game measure selection by providers or if this represented actual improvement. Providers can also game the system by declaring a patient ineligible for certain measures. “Gaming by over exception reporting and over classifying patients was kept minimal, although only three studies measured gaming specifically (e.g., 0.87% of patients exception reported wrongly). Therefore, there is limited evidence that gaming does occur with P4P use, although it is not clear what is the incidence of gaming without P4P use.”

    The most important factor may be whether the providers are aware that a P4P program has been put in place. “[S]tudies found positive P4P effects (5 to 20% effect size) with programs that fostered extensive and direct communication with involved providers.”

    Payment Size and Type

    The authors surprisingly found limited impact of P4P payment size on physician behavior. This may be due to the fact that in markets with payer fragmentation, even large P4P amounts will make up a small share of any one physician’s income. Generally, giving positive rewards produced better outcomes than programs with winners and losers, but the authors claim this finding is far from robust.

    Payments targeted to organizations seemed to less effective than those targeted at individual providers, but programs aimed at either tended to produce positive results. “A combination of incentives aimed at different target units was rarely used, but did lead to positive results.”

    Access and Equity

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    Physician Performance in Ambulatory Practice

    November 4, 2010 in P4P, Quality | No comments

    A paper by Holmboe et al. (2010) evaluates physician performance on quality measure.  The authors use a sampled the medical records of an average of 95 patients per general internist.  They found that “performance on the individual and composite measures varied substantially within and between physicians…Higher certification exam scores were associated with better performance on the overall, chronic care, and preventive services composites.

    The interesting part of the paper, however, is the explanations for why there is variation in physician scores.  The explanations include:

    1. Varying degrees of physician knowledge and/or skill
    2. Lack of sufficient documentation in certain physician offices
    3. Some physicians’ office systems may be more suitably configured to execute certain tasks (e.g., immunizations, test ordering)
    4. Patient demand for preventive and other services will affect medical service provision and scores.

    Source:

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    Episode-Based Payment Bundling in Medicare

    October 19, 2010 in Medicare, P4P, Part B | No comments

    Bundled payment has been gaining popularity in the minds of policymakers.  In essence, a bundled payment structure gives providers a single lump sum payment to cover all related services for an episode of care.  In the private sector, the Texas Heart Institute and Geisinger Health System both charge a single lump sum for certain procedures. This payment scheme transfers risk from the payer to the provider, but also gives the provider an incentive an incentive to economize (in both the positive and negative senses) on care.

    A paper by Birkmeyer et al. (2010) examines the services which would need to be included to create a bundled payment.  The authors examine 4 surgical procedures: coronary artery bypass (CABG), hip fracture repair, back surgery, and colectomy.  These procedures were chosen since they are 1) common, 2) expensive and 3) involve significant physician discretion in terms of the services provided. Their respective total cost were: $26,515 for back surgery, $27,572 for hip fracture repair, $28354 for colectomy, and $45,358 for CABG.

    As the chart below demonstrates, there the paper presents two key findings. First, the vast majority of the costs went to hospitals, mostly for the index hospitalization.  Less than 15% of cost went for readmissions or payments to surgeons. Secondly, a large number of providers are involved in patient care for any one of these bundles. Thus, determining which of the many providers is actually responsible for episode cost may be difficult.

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    ESRD Quality Monitoring Initiative

    October 7, 2010 in Medicare, P4P, Quality, Uncategorized | No comments

    All patients with end stage renal disease (ESRD) are eligible for Medicare regardless of their age.  In 1972, the Social Security Act extended all Medicare Part A and Part B benefits to individuals with ESRD (of any age) who are entitled to receive Social Security benefits. ESRD beneficiaries now account for 1% of Medicare enrollment. This post review the types of services ESRD Medicare beneficiaries receive and how Medicare pays providers for these services.  Today, however, I will review Medicare efforts to improve the quality of care ESRD beneficiaries receive.  You can find an overview of the ESRD Quality Improvement Program (QIP) here.

    Timeline

    • 1972. the Social Security Act extends all Medicare Part A and Part B benefits to individuals with ESRD (of any age) who are entitled to receive Social Security benefits. ESRD beneficiaries account for 1% of Medicare enrollment.
    • 1978. ESRD Amendments require the formation of ESRD Network Organizations to support the ESRD program. CMS currently contracts with 18 ESRD networks.
    • 1994. The Core Indicators Project was established to improve the care of patients with ESRD.  The Core Indicators included measures related to anemia management, adequacy of hemodialysis, nutritional status and blood pressure control
    • 1999 (Mar). ESRD CIP was merged with the ESRD Clinical Performance Measures.
    • 2000 (Jan). Section 4558(b) of the Balanced Budget Act of 1997 required CMS to develop and implement a method to measure and report
      the quality of renal dialysis services furnished under the Medicare program. To implement this legislation, CMS developed the ESRD Clinical Performance Measures (CPM) Project based on the National Kidney Foundation’s Dialysis Outcome Quality Initiative (NKF–DOQI) Clinical Practice Guidelines.
    • 2001 (Jan). Medicare launched Dialysis Facility Compare based on the Nursing Home Compare website. The quality measures initially reported on DFC were measures of anemia control, adequacy of hemodialysis treatment and patient survival. Medicare claims data were used to calculate the anemia management and hemodialysis
      adequacy rates, and administrative data were used to determine patient survival rates.
    • 2008 (Apr). The updated ESRD Conditions for Coverage final rule, which contains revised requirements that dialysis providers and facilities must meet in order to be approved by Medicare and receive payment. As part of the revised requirements, dialysis providers and facilities are each required to implement their own quality assessment and performance improvement program. The CPMs were updated to include 26 measures from the areas of anemia management; hemodialysis adequacy; peritoneal dialysis adequacy; mineral metabolism; vascular access; patient education/perception of care/quality of life; and patient survival.
    • 2008 (Jul). Section 153(c) of the Medicare Improvements for Patients and Providers Act (MIPPA) requires that Medicare implement a quality incentive program (QIP)
    • 2009 (Feb). Medicare began implementing the CROWNWeb system to electronically collect information on about patients, facilities, providers, and clinical data to support the CPM Project.
    • 2009 (Sep). Medicare decides to begin paying ESRD providers based on a prospective payment system (PPS) beginning in 2011.

    Where are we now?  Medicare will begin paying dialysis providers through a PPS beginning in 2011.  This will give providers an incentive to provider services more cost effectively, but also potentially will give them an incentive to decrease the quality of care.  To ensure that ESRD beneficiaries receive the same quality of services under PPS as under a FFS, Medicare developed the QIP.  Below, I review the QIP in more detail.

    Quality Incentive Program

    The QIP requires Medicare to establish an ESRD quality program using the following steps:

    1. Select measures;
    2. Establish the performance standards that apply to the individual measures;
    3. Specify a performance period with respect to a year;
    4. Develop a methodology for assessing the total performance of each provider and facility based on the performance standards with respect to the measures for a performance period; and
    5. Apply an appropriate payment reduction to providers and facilities that do not meet or exceed the established total performance score.

    Medicare has already chose quality measures for the initial year.  Data from the following three measures will be submitted to CMS via ESRD claims.

    • Percentage of Medicare patients with an average Hemoglobin <10.0 g/dL (2%);
    • Percentage of Medicare patients with an average Hemoglobin >12.0 g/dL (26%); and
    • Percentage of Medicare patients with an average Urea Reduction Ratio (URR) >65 percent (96%).

    The numbers in parentheses represent the national performance rates for all dialysis providers and facilities based on 2008 data from the Dialysis Compare website.  Providers receive a score between 0-10 based on their performance on each measure.  Medicare has recently proposed a scoring method which subtracts 2 points for every 1 percentage point the provider falls below the initial performance standard (e.g., if the initial performance standard for a particular provider or facility for the Hemoglobin>12 g/dL is set as the 2008 national average rate (26%), then if that provider/facility had 28% of Medicare patients with hemoglobin levels>12 g/dL during 2010, the provider/facility would receive 6 points for its performance on the measure as 28% is 2 percentage points below the performance standard). The provider’s total score could be weighted evenly across all three scores.  Alternatively, some have proposed weighting the Hemoglobin <10.0 g/dL at 50% of the score and the other two quality measures at 25% of the provider’s score to put more weight on avoiding low hemoglobin levels.

    Payment will be based on the provider’s score.  THe proposed payment reduction scale is as follows:

    • 26-30 points: 0.0%
    • 21-25 points: -0.5%
    • 16-20 points: -1.0%
    • 11-15 points: -1.5%
    • 0-10 points: -2.0%

    In the future, Medicare will consider expanding the QIP program to include additional measures.  Quality measures considered include:  Kt/V, vascular access rates, bone and mineral metabolism, and access infection rates.

    Source:

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    Implementing a value-based purchasing program for Medicare

    January 27, 2010 in Medicaid/Medicare, P4P | No comments

    “The Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) requires the Department of Health and Human Services (DHHS) to develop a plan that will transition Medicare payments into a VBP [value based purchasing] program for physician and other professional services that is based on efficiency and the quality of services provided. The Act also requires the DHHS to disseminate informational reports to physicians using episode groupers and/or per capita measures.”

    One way to implement VBP is to evaluate physicians based on episodes of care.  Episodes of care aggregate claims information to construct episodes.  These episodes are supposed to represent a homogeneous unit of care for a given type of treatment or disease.  A paper by Thomas et al. (2009) however, has found some problems with how episodes are constructed.  For example:

    • Many physicians typically treat a patient during an inpatient stay.  Can inpatient episodes reliably be attributed to a single physician?
    • Most Medicare inpatient stays treat multiple diseases simultaneously.  How does grouping account for these comorbitities?
    • Episode grouping is based on claim diagnosis codes.  “Since Medicare’s payment for a physician service is based on the CPT code (reflects procedure or type of visit) rather than on the diagnosis, physician offices have no incentive to spend much effort in coding a diagnosis. In contrast, the payments hospitals receive are determined by a combination of diagnosis and procedure codes.”
    • Complications from surgical care can be the fault of the doctor or from factors outside their control.   Determining whether or not the physician is at fault is extremely difficult and any physician rating system will likely blend the two causes.

    Slides and a “backgrounder” from a CMS listening session on “Defining an Episode Logic” are also available.

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