Modern Healthcare - - NEWS - By Sabriya Rice

While of­fer­ing physi­cians bonuses for hit­ting qual­ity bench­marks is popular, the in­cen­tive pro­grams may not be worth the money.

Link­ing fi­nan­cial re­wards to cost­ef­fec­tive man­age­ment of pa­tient care or re­duc­ing ad­verse out­comes has not pro­duced the de­sired re­sults, re­cent stud­ies show. When it comes to physi­cian pay, some ex­perts are ask­ing if health­care or­ga­ni­za­tions are mov­ing in the wrong di­rec­tion.

“The pro­grams are of­ten less ef­fec­tive than the de­sign­ers hoped for,” said Jes­sica Greene, as­so­ciate dean for re­search at Ge­orge Wash­ing­ton Uni­ver­sity. She con­ducted two stud­ies of an am­bi­tious physi­cian in­cen­tive pro­gram at Min­nesota-based Fairview Health Ser­vices. “There is still so much we don’t know about how to de­sign ef­fec­tive pay-for-per­for­mance pro­grams.”

Be­hav­ioral econ­o­mists and health­care qual­ity and man­age­ment ex­perts are urg­ing provider or­ga­ni­za­tions to take a sec­ond look at their pay­ment mod­els. Com­plex com­pen­sa­tion de­signs, poor align­ment of goals and lack of clearly de­fined, ac­tion­able mea­sures can lead to failed ef­forts and un­in­tended con­se­quences, they say. Poorly aligned mon­e­tary mo­ti­va­tions can even lead to dif­fi­cul­ties with staff re­cruit­ment or re­ten­tion and lead to

over-fo­cus­ing on one spe­cific is­sue at the peril of other, more im­por­tant ones.

Hos­pi­tal and physi­cian group lead­ers long have cited the dif­fi­culty of craft­ing physi­cian pay­ment mod­els that en­cour­age qual­ity pro­cesses and out­comes while main­tain­ing the in­cen­tive for high pro­duc­tiv­ity. Ex­perts are con­cerned that any new Medi­care value-based sys­tem for pay­ing doc­tors, which must be de­vel­oped un­der re­cent leg­is­la­tion, will run into those same chal­lenges, given the fledg­ling state of mea­sur­ing the per­for­mance of in­di­vid­ual physi­cians.

“The things that re­ally mat­ter in terms of med­i­cal qual­ity are very dif­fi­cult to mea­sure,” said Dr. Michael Kirsch, a Cleve­land-based gas­troen­terol­o­gist and au­thor of a blog called MD Whistle­blower. Value-based pay can drive healthy com­pe­ti­tion, but re­liance on met­rics that are easy to mea­sure but don’t ul­ti­mately boost out­comes is “a clumsy re­sponse to fee-for-ser­vice.”

The science of mea­sur­ing qual­ity per­for­mance in health­care is still in its in­fancy. Cur­rent mea­sures are limited, and crit­ics say link­ing them to com­pen­sa­tion might be pre­ma­ture. Im­prove­ments seen on eas­ily tracked process mea­sures such as check­list use or giv­ing dis­charge in­struc­tions may not lead to im­prove­ments in pa­tient out­comes such as lower mor­tal­ity and lower read­mis­sion rates.

About 40% of U.S. health­care providers had some type of in­cen­tive linked to pay in 2013, and within that group an av­er­age of more than 4% of to­tal com­pen­sa­tion was linked specif­i­cally to qual­ity met­rics, ac­cord­ing to the MGMA. In the com­ing weeks, the group is ex­pected to re­lease data from its lat­est physi­cian com­pen­sa­tion sur­vey, in­clud­ing more than 70,000 providers and more than 4,100 physi­cian groups.

Ad­vo­cates of qual­ity in­cen­tive pay say the pro­grams have lifted the per­for­mance of some physi­cians and im­proved col­lab­o­ra­tion among clin­i­cians. That was the case for Fairview Health Ser­vices, which rolled out an am­bi­tious com­pen­sa­tion pro­gram in 2010 when it tied 40% of clin­i­cian pay to per­for­mance on a suite of met­rics re­quired by state law. In­creases in salary were based on how well the med­i­cal group per­formed over­all on state bench­marks for di­a­betes, car­dio­vas­cu­lar and asthma care, and for cer­tain ev­i­dence-based can­cer screen­ings.

Yet even with the prom­ise of more money, the model “didn’t nec­es­sar­ily have an over­whelm­ing im­pact,” said Va­lerie Over­ton, pres­i­dent for qual­ity and in­no­va­tion at Fairview Med­i­cal Group. It’s not that qual­ity did not go up at all, she said. It’s just that it didn’t go up any more than mar­ket com­peti­tors that had not in­sti­tuted such a pro­gram.

The Fairview pay­ment model also was a source of “sig­nif­i­cant frus­tra­tion” among staff, said Greene who, along with Over­ton, was one of the co-au­thors of the two stud­ies on Fairview’s pay-for- per­for­mance ef­fort.

Other stud­ies on fi­nan­cial in­cen­tives have come to sim­i­lar con­clu­sions. In one, some pri­mary-care physi­cians in New York were el­i­gi­ble to re­ceive up to $200 per pa­tient and up to $100,000 per clinic based on per­for­mance on ev­i­dence­based heart-care pro­cesses and out­come mea­sures. But there were only small im­prove­ments de­spite the fi­nan­cial in­cen­tive, ac­cord­ing to a 2013 re­port pub­lished in JAMA.

A pro­gram in which Hous­ton clin­ics could re­ceive twice the nor­mal fi­nan­cial in­cen­tive given by Medi­care for achiev­ing cer­vi­cal can­cer screen­ing, mam­mog­ra­phy and pe­di­atric im­mu­niza­tion tar­gets also had lit­tle im­pact. “De­spite con­sid­er­able ini­tial en­thu­si­asm for the use of fi­nan­cial in­cen­tives for qual­ity im­prove­ment, this study does not sup­port the ef­fi­cacy of this ap­proach,” wrote the au­thors of a 2010 study of that pro­gram in the Jour­nal of the Amer­i­can Board of Fam­ily Medicine.

Re­searchers in an­other study ex­am­ined 30-day mor­tal­ity rates among more than 6 mil­lion pa­tients who had acute my­ocar­dial in­farc­tion, con­ges­tive heart fail­ure or pneu­mo­nia and un­der­went coro­nary-artery by­pass graft­ing. The hos­pi­tal-based, pay-for-per­for­mance pro­gram linked to Medi­care pay­ments did not re­duce deaths. The au­thors of the 2012 ar­ti­cle in the New Eng­land Jour­nal of Medicine con­cluded that ex­pec­ta­tions for sim­i­lar pro­grams “should re­main mod­est.”

Not sur­pris­ingly, when the CMS re­leased its third year of 30-day read­mis­sion penal­ties last fall, qual­ity

re­searchers said that if only 769 of more than 3,370 U.S. hos­pi­tals suc­ceeded in avoid­ing the fines, that pro­gram may not be achiev­ing its de­sired goal of broadly im­prov­ing qual­ity of care.

“There is es­sen­tially no ev­i­dence that pay-for-per­for­mance works, and cer­tainly no ev­i­dence that it works as it is be­ing ap­plied to Amer­i­can health­care right now,” said Dr. St­effie Wool­han­dler, a pro­fes­sor at the City Uni­ver­sity of New York’s School of Public Health. The ten­dency of pay-for-per­for­mance to “dan­gle money” be­fore doc­tors has side ef­fects. It turns the in­trin­sic pro­fes­sional and moral obli­ga­tion of do­ing the best thing for the pa­tient into a mar­ket trans­ac­tion gov­erned by price, and also re­quires ex­ces­sive amounts of doc­u­men­ta­tion and ad­min­is­tra­tive costs. “If clin­i­cians do have ex­tra time, they should be fo­cus­ing on real im­prove­ment and not just check­ing boxes to make pay-for-per­for­mance goals,” she said.

Still, there are lessons learned from the roll­out of the value-based in­cen­tive pro­grams. Fairview’s project re­vealed, for ex­am­ple, that the com­pen­sa­tion model was most ef­fec­tive with the poor­est-per­form­ing physi­cians. Those in the low­est third im­proved on av­er­age three times more than those in the mid­dle group and al­most six times more than those in the top-per­form­ing group. It also led to greater col­lab­o­ra­tion be­tween clin­i­cians who were forced to work to­gether to boost clinic-wide per­for­mance.

Thought­ful ap­pli­ca­tion of the de­sign of pay-for-per­for­mance mod­els is one key to their suc­cess. Sys­tems with com­plex math­e­mat­i­cal for­mu­las that are dif­fi­cult to un­der­stand don’t do as well, said Dave Gans, se­nior fel­low of in­dus­try af­fairs for the MGMA.

In­deed, last Oc­to­ber, Fairview re­vised its model, which orig­i­nally in­cluded com­plex for­mu­las such as “a slid­ing scale of down to half the me­dian in­come for per­for­mance be­tween the 20th and 29th per­centiles.”

Be­hav­ioral econ­o­mists aren’t sur­prised by the poor ini­tial re­sults from health­care’s pay-for-per­for­mance pro­grams. Un­der­stand­ing the ac­tual bar­ri­ers to the de­sired be­hav­ior—such as lack of knowl­edge, mo­ti­va­tion or re­sources—is cru­cial, said Dan Ariely, founder of the Cen­ter for Ad­vanced Hind­sight. His group stud­ies how peo­ple make de­ci­sions and has looked at pay-for-per­for­mance in other fields such as ed­u­ca­tion.

“Once you un­der­stand where the prob­lem is, then you can try to solve it,” he said. “Pay-for-per­for­mance is a good idea for things where you can spell out ex­actly what suc­cess is.”


Dr. St­effie Wool­han­dler, pro­fes­sor at the City Uni­ver­sity of New York’s School of Public Health

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