Unbiased Analysis of Today's Healthcare Issues

Bengt Holmström’s Nobel Prize Lecture

Nobel Prize winner Bengt Holmström talks about the pros and cons of  pay-for-performance.  Interesting throughout.

Read the rest of this entry »

P4P in Australia

Pay for performance (P4P) is the latest rage in healthcare quality monitoring. Paying physicians more who provide high quality care makes sense intituitvely. The U.S. isn’t the only country to hop on the P4P bandwagon. In 2001, the Australian government initiated a financial incentive program for “improved management of diseases such as asthma and diabetes […]

Read the rest of this entry »

Medicare Physician Payment Adjustments

The Medicare billing system is complex.  There an alphabet soup of acronyms, (e.g., RVUs, CPT, HCPCS, GPCI) and each of these affects payments in different ways.  In addition to the standard payment terms, Medicare is also creating additional payment incentives.  These payment incentives fall into three broad categories: Quality reporting e-Prescribing (eRx) Electronic Health Records […]

Read the rest of this entry »

Does the Frequency of P4P Evaluations affect Performance?

“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 […]

Read the rest of this entry »

Analyzing Physician Efficiency: Per-Capita Scoring

How does one evaluate a physician’s efficiency level?  This process has five main dimensions. Which resource use measurement methodology to use. There are two main profiling methodologies: per capita and episode-based. How to account for differences in patient health status. This is done through risk adjustment.  However, choosing the proper risk adjustment method is crucial […]

Read the rest of this entry »

Episode-Based Performance Measures: A reality?

Pay-for-performance has become very fashionable of late. One way to measure physician performance is with episode groupers. This software groups together some or all of the services related to the care of a patient’s chronic or acute medical conditions. Policymakers can then use the episode as the unit of observation for: feedback on physician performance, […]

Read the rest of this entry »

Commentary on P4P

I recently read a Health Affairs article analyzing a pay-for-performance (P4P) demonstration. The Local Initiative Rewarding Results (LIRR) demonstration in California involved seven Medicaid-focused health plans in California between 2003 and 2005. Here are some of my most recent thoughts on P4P: The article seemed to show that P4P worked best when there was much […]

Read the rest of this entry »

EconLog on P4P

Arnold Kling of the EconLog site has some commentary on P4P when discussing Tim Hartford’s latest book (“The Logic of Life“). I have a very different approach to compensation. I think that the key is to change compensation schemes frequently. The reason is that any scheme can be gamed, and the longer you wait to […]

Read the rest of this entry »

‘For the first time I found myself truly caught between my own needs and those of my patient.’

This is how a very interesting article (“P4P is changing me“) in Medical Economics begins. The essay won an award in the 2006 Doctors’ Writing Contest. The author of the story is a physician who has been under much financial pressure of late; a divorce, med school loans, a mortgage, alimony and child support were […]

Read the rest of this entry »