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…

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…

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…

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…

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…