Friday, November 7, 2014

OECD/WHO/EOHSP report on P4P

October 6, 2014

European Observatory of Health Systems and Policies

Paying for Performance in Health Care
Implications for Health System Performance and Accountability
Edited by Cheryl Cashin, Y-Ling Chi, Peter C. Smith, Michael Borowitz
and Sarah Thomson

Forward from the OECD (excerpts):

The problem is that not enough is known about whether and how P4P
actually increases value for money in health systems. The evidence that
P4P improves health outcomes, or even quality of processes of care, is
limited at best.

(This) volume analyses the experience of P4P programmes in 10 OECD
countries, selected to reflect the wide range of health system contexts
and challenges across the OECD.

The findings of the volume in many ways mirror the findings of the few
rigorous systematic reviews of P4P programmes, and the opinions of many
leading commentators. Pay for performance does not lead to
"breakthrough" quality improvements, and performance measures and other
key building blocks of P4P programmes remain highly inadequate.

This volume will not provide answers to questions such as whether or not
P4P works, which performance measures are most appropriate, or what is
the right level of financial incentive to get results. Instead - and
more importantly for real health financing policy in complicated
contexts - are the insights about how P4P might be used to strengthen
health system governance and strategic health purchasing to continue the
shift taking place in many countries from paying for performance to
paying for value.

Mark Pearson, Head of Health Division
Directorate of Employment, Labour and Social Affairs
Organisation for Economic Co-operation and Development

Chapter thirteen:

United States: California integrated healthcare association physician
incentive programme
By Meredith Rosenthal

One of the first, and perhaps the largest, private pay for performance
(P4P) initiatives of this era was launched by the Integrated Healthcare
Association (IHA) in 2001 with eight health plans representing ten
million members in California. The IHA programme is of particular
interest not only because of its size, but also because it has been
sustained for more than a decade and has been independently evaluated.

Results of the programme:

Performance related to specific indicators

More generally, IHA's own monitoring reports give a mixed picture of
performance improvement over time. Performance measures included in the
IHA P4P programme have improved modestly and unevenly across measures,
with no evidence of "breakthroughs" in quality improvement.

Programme monitoring and evaluation

Two controlled studies provide the strongest evidence of impact of the
IHA initiative. These studies find that not all targeted clinical
process measures of quality improved. Among the measures that could be
analysed, only cervical cancer screening improved differentially among
the IHA participants, and improvement was modest at best.


While there has been no systemic analysis of the impact of the IHA
programme on equity, several empirical clues suggest that P4P may not
have distributed its benefits equally… (I)interviews with physician
group leaders revealed some concerns that the P4P programme has caused
groups to avoid patients whose health of health behaviour would
negatively affect the group's performance.

Cost and savings

While no formal analyses have been reported, it is unlikely that
improvements in clinical quality, health information technology, and
patient experience (to the extent they have occurred) would generate
saving for payers.

From the Conclusions

Another possible explanation for the weak results may be the continued
expansion of the measure set and the difficulty physician organizations
face in making investments in quality improvement when the targets are
continuously moving. There is an obvious tension here with the desire to
include a comprehensive set of measures to avoid "teaching to the test,"
a narrow focus that causes providers to concentrate on a small subset of
tasks at the expense of unrewarded domains, and to incorporate the best
available measurement science over time.


November 6, 2014
Designing Smarter Pay-for-Performance Programs
By Aaron McKethan, PhD; Ashish K. Jha, MD, MPH

The idea behind pay for performance is simple. Because individuals and
organizations respond to incentives, physicians whose patients achieve
desirable outcomes should be paid more as an incentive to improve their
performance. Yet the results of pay-for-performance programs have been
largely disappointing. One argument is that neither the right set of
incentives nor the right set of metrics has been identified. Another
explanation, which has received far less attention, is that the right
set of patients has not been identified for targeted efforts.

To the extent that higher-risk patients can be reliably identified
prospectively, this information can inform the design of smarter, more
targeted pay-for-performance programs. Specifically, a targeted
pay-for-performance program would have, at its core, a prediction model
that would identify patients who are at elevated risk of failing to meet
a meaningful clinical goal or of having a bad outcome. Predictive models
are not just risk-adjustment models already in use by payers to create a
level playing field. Predictive models can take into account any factor
that is likely to affect a patient's chance of a poor outcome.

There is little doubt that the effectiveness of these programs will be
driven, in large part, by the ability to prospectively identify at-risk
patients. However, given the failure of recent efforts to meaningfully
improve outcomes, testing targeted pay for performance may be worth the


Comment by Don McCanne

Pay for performance (P4P) continues to be promoted as a means of
improving quality while reducing costs. This 338 page OECD/WHO report
adds to the abundance of the policy literature that shows that P4P does
not achieve these goals, and may actually impair equity.

The policy community never gives up on a bad idea. In this JAMA article
(access is free), McKethan and Jha suggest that we improve P4P by
applying it only to prospectively-identified at-risk patients. Not only
would that be a good study, but it could also result in P4P rewards that
are five times the current levels. What? Greatly increase the complexity
and uncertainty by testing only at-risk patients, if you could even
identify them? And then depend on provider greed to drive the program?
Come on!

One thoroughly tested model that would greatly reduce wasteful spending
while improving quality by redirecting the savings to more appropriate
care is the single payer model - a national health program. We can let
the policy people go out in the alley and play their P4P games while we
get serious about improving Medicare and providing it to everyone.

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