Designing and Implementing Pay-for-Performance Programs Ongoing Challenges Gary

Designing and Implementing Pay-for-Performance Programs: Ongoing Challenges Gary J. Young, J. D. , Ph. D. Boston University Presentation for AHRQ Annual Meeting Session on How Pay-for-Performance Fits with a Value Agenda September 28, 2007 Financial support from Agency for Healthcare Research and Quality; Robert Wood Johnson Foundation Gary J. Young 1

P 4 P: Will it Work? Recent evidence points to modest gains from P 4 P in terms of provider adherence. Selected Findings: n Rosenthal et al. (2006) Relative increase of 3. 6 percentage points for cervical cancer screening n Levin-Scherz et al. (2006) Relative increase of 2 -19 percentage points for diabetes measures n Lindenauer et a. (2007) CMS Premier demonstration: Relative increase of 2. 6 percentage points for AMI measures; 3. 4 points for pneumonia measures; 4. 1 points for heart failure measures. n Young et al. (2007) Absolute increase of 7 percentage points for diabetes measure (e. g. , eye exam) Gary J. Young 2

Key Challenges n n n n Provider Engagement Unit of Accountability Quality Measures Provider Capability Incentive Structure Data Systems and Measurement Unintended Consequences Gary J. Young 3

Supporting Research 7 Demonstration Sites – Rewarding Results • Surveys of Physicians (over 4000 surveyed; approximately 1500 responses) • Interviews with over 60 Senior Managers of Physician Organizations • Focus Groups with Providers and Payers • Site Visits to Provider Organizations • Findings of Other Researchers Gary J. Young 4

Provider Engagement n Physicians appear comfortable with the concept of P 4 P. --Strong preference for incentives linked to quality vs. utilization or productivity Gary J. Young 5

Survey Results Gary J. Young 6

Survey Results Gary J. Young 7

Provider Engagement n n Physicians do not appear to have a strong understanding of the P 4 P programs in which they participate. Conventional forms of communicating w/ providers appear inadequate (very Low physician survey scores regarding understanding of programs). Many physicians appear to feel disenfranchised. Physician involvement in program design can help secure buy-in (e. g. , selection/modification of measures). Gary J. Young 8

Unit of Accountability n Sponsors face difficult choices and possible tradeoffs between selecting individuals versus organizations. -- systems engineering vs. physician initiative -- stimulating investment in QI infrastructure vs. enhancing engagement of front-line providers. Gary J. Young 9

Quality Measures n Physicians generally comfortable with standardized measures such as HEDIS and HQA. --Outcomes vs. Process Measures --Specialists and Non-Acute Care Settings Gary J. Young 10

Provider Capability n n Providers reveal anxiety about capabilities to perform well on quality measures. --Hospitals with well developed QI infrastructure appeared to have a distinct advantage in BCBSM P 4 P With limited provider capability, one-time performance gains may be common. --In some situations, learning goals should possibly precede performance goals Gary J. Young 11

Gary J. Young 12

Incentive Structure n Both program sponsors and providers are divided on many issues regarding incentive structure. --Attainment vs. Improvement --Bonus only vs. Penalties (e. g. , withholds) Gary J. Young 13

Data Systems and Measurement n Providers have strong concerns about data reliability and validity. --Claims vs. Charts (appeals process/reserve fund) -- Small Numbers (composite scores multi-payer initiatives) Gary J. Young 14

Unintended Consequences n Physician surveys reveal no major concerns about UC. --Some studies outside healthcare point to negative impact on innovation. -- P 4 P in safety net settings may pose unique risks. Gary J. Young 15

Concluding Comments n n n P 4 P can lead to gains in clinical quality, but the magnitude of the gains may be quite modest and timelimited, particularly without substantial improvements in provider infrastructure for quality measurement and improvement. Physicians do appear comfortable with P 4 P as a concept, but have certain concerns with the way P 4 P programs have been designed and implemented. Program sponsors face many daunting challenges in designing and implementing programs. Gary J. Young 16