Issues in the Design and Implementation of Pay-for-Performance Programs

Gary J. Young, J.D., Ph.D.Professor and Director

Northeastern University Center for Health Policy and Healthcare Research

Boston, MA

Presentation for Agency for Healthcare Research and Quality, Annual Meeting

September 20, 2011

Financial support from the Agency for Healthcare Research and Quality and the Robert Wood Johnson Foundation Investigator

Award for Health Policy Research

Design and Implementation Issues

Multi-year study of over 70 provider organizations with quality-related incentive arrangements.

Surveys of Physicians

Interviews with senior leaders from physician organizations and hospitals

Analysis of Clinical Data

Design and Implementation Issues

Selecting unit of accountability

Managing provider attitudes toward pay-for-performance program

Unit of Accountability

Individuals

Organizations

Teams (within or across organizations – e.g., ACOs)

Interviews with Senior Leaders from Physician Organizations and Hospitals

Telephone Interviews and Site Visits

Setting # Senior Leaders

Massachusetts 26

California 37

Michigan 10

Interviews with Senior Leaders

General attitudes and issues:

– Quality incentives (better than utilization)

– Adequacy of dollars (new or old money)

– Awareness and involvement of physicians (grass roots vs. system engineering)

– Internal distribution of financial rewards (where individual physicians were not the unit of accountability)

-- $ individual performance on P4P criteria -- $ individual performance on non-P4P criteria-- $ equally independent of performance-- $ retained at group level for investment (unit of

accountability issue)

Interviews with Group Practice Executives

“We have a point system, but I would not classify that under the heading of necessarily a quality system. I’d call it more of a participation system. I think the outcome spills over a little into quality because again, the camaraderie and the communication improve and that’s always a good thing when PCPs are talking to specialists, interfacing more….”

Incentives and Unit of Accountability

Individual Provider

Efficiency Physician Organization of Incentive

Hospital

Investment in infrastructure

Provider Attitudes

Theoretical Perspectives:

Self Determination Theory

Professional Control

Interviews with Senior leaders

“Plans just throw some money in our way and think we will notice and pay attention. They do not seem to understand that our physicians have deep concerns about what strings are attached. We are always worried about the hidden agenda and what a particular incentive opportunity means for our future.”

Attitudes and Responsiveness to Financial Incentives

Study Setting: Physician network (IPA) in Rochester NY.– Implemented tournament-style P4P program for diabetes

care– > 300 PCPs– Quality measure: Percentage of expected number of

diabetic exams/screens (LDL, 2 HbA1c, urinanalysis, eye exam) conducted.

– Financial incentive: 50 to 150% of withhold payment– Potential payout up to about $3,000 for diabetic

component

Survey of physicians at Baseline– Approximately 335 physicians surveyed– Approximately 48% response rate – No performance differences between respondents and

non-respondents

Measurement of AttitudesFive-point, multi-item Likert scales

Autonomy: “The incentive system interferes with my autonomy for how I care for patients.” (reverse scaled)

Goal importance: “This financial incentive is tied to a quality target that is clinically meaningful for diabetic patients.”

Overview: Six-Year Trends in RIPA Diabetes Care(n=334)

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1999 2000 2001 2002 2003 2004

Mea

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Rat

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per p

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HbA1c Check Urinalysis LDL Check Retinal Exam

Pre-Incentive Post-Incentive

Summary Points

The unit of accountability carries possible tradeoffs between infrastructure investment and power of incentives.

Provider attitudes toward incentive programs may be an important moderator of an incentive program’s success. Attitudes among providers toward same incentive program may vary markedly.

– Identify providers with negative attitudes– Create opportunities for providers to have

input into program design/implementation