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Incentives 2.0: Is Paying for Performance Enough?


Tuesday, October 14, 2014

Every day, health care professionals make complex decisions that directly affect the cost and quality of care. Increasingly, both private and public payers are implementing payment reforms to motivate quality improvement, reward providers for delivering high quality care, and, in some cases, impose penalties for sub-par performance, while bipartisan policy proposals to reform Medicare physician payment would modify existing provider incentive programs.

This briefing will explore the effectiveness of pay-for-performance programs to date, highlight factors that influence providers’ choices beyond financial rewards or penalties, and explain how these factors can be used to improve health system performance. A distinguished panel of experts addressed these and related questions.

Dr. Ashish Jha, professor of health policy, Harvard School of Public Health, provided an overview of the evidence on the use of provider incentives in payment reform initiatives in the public and private sectors.

Dr. Ateev Mehrotra, associate professor of health care policy and medicine, Harvard Medical School, discussed the evidence on how well provider incentive programs are working and describe how policymakers can learn from research on provider decision-making to improve health care delivery system and payment reforms.

Dr. Patrick Herson, president, Fairview Medical Group (Minnesota), discussed how Fairview is using physician, provider, and team incentives—both financial and non-financial—to drive improvements in quality.

Ed Howard, executive vice president, Alliance for Health Reform and Anne-Marie Audet, vice president for delivery system reform & breakthrough opportunities at The Commonwealth Fund, co-moderated.


Follow the briefing on Twitter: #PayForPerformance

Contact: Sarah Dash saradash@allhealth.org 202-789-2300

The event was sponsored by the nonpartisan Alliance for Health Reform and The Commonwealth Fund.
 
KEY BRIEFING POINTS
If you were unable to attend the briefing, here are some key takeaways:

BEYOND FINANCIAL INCENTIVES. Many factors influence provider behavior, including financial incentives, policy regulations, organizational influence and intrinsic motivation, stated Dr. Anne-Marie Audet. Better provider incentives will result in high value care, she emphasized. 

 
PAY FOR PERFORMANCE AND HOSPITAL READMISSIONS. Evidence for the effectiveness of the pay for performance model is variable, stated Dr. Ashish Jha. The Premier Hospital Quality Incentive Demonstration (HQID) compared hospitals focusing on pay for performance against control hospitals and found that there was no significant difference after 6 years.  However, a JAMA study (Patrick Conway, CMS) found that hospital readmissions fell after the introduction of pay for performance incentives. To ensure that incentives work, we must target small number of outcomes, structure it right and play into provider intrinsic motivations, he added.

SMALL REWARDS WORK. Behavioral economics research can be used to design more effective pay for performance programs, stated Dr. Ateev Mehrotra. For example, offering multiple small, immediate rewards rather than one large, uncertain reward can increase provider motivation.


INVESTMENT OF RESOURCES NEEDED. Pay for performance programs require an investment of resources from providers, stated Dr. Patrick Herson.  In an evaluation of Fairview Medical Center’s compensation plan, providers ranked productivity, individual quality and team quality as most important factors in determining their compensation.

Transcript, Event Summary and/or Webcast and Podcast

Transcript: Transcript (Adobe Acrobat PDF), 10/14/2014
Full Webcast/Podcast: Full Video

Speaker Presentations

Anne ‐ Marie J. Audet Presentation (Adobe Acrobat PDF), 10/14/2014
Ashish Jha Presentation (Adobe Acrobat PDF), 10/14/2014
Patrick Herson Presentation (Adobe Acrobat PDF), 10/14/2014
Ateev Mehrota Presentation (Adobe Acrobat PDF), 10/14/2014

(If you want to download one or more slides from these presentations, contact us at info@allhealth or click here for instructions.)

Source Materials

The Sustainable Growth Rate (SGR) and Medicare Physician Payments: Frequently Asked Questions. (Adobe Acrobat PDF), Hahn, Jim. Congressional Research Service, 6/12/2014
SGR Repeal and Medicare Provider Payment Modernization Act (Adobe Acrobat PDF), House Committees on Energy & Commerce and Ways & Means and the Senate Committee on Finance Staff, 2/6/2014
Agenda (Adobe Acrobat PDF), , 10/14/2014
Materials List (Adobe Acrobat PDF), , 10/14/2014
Source List (Adobe Acrobat PDF), , 10/14/2014
Speaker Biographies (Adobe Acrobat PDF), , 10/14/2014

Offsite Materials (briefing documents saved on other websites)

A Case Study of a Team-Based, Quality-Focused Compensation Model for Primary Care Providers, The Commonwealth Fund, 11/1/2013
Health Policy Brief: Pay-for-Performance, Health Affairs, 10/11/2012
How Geisinger Structures its Physicians’ Compensation to Support Improvements in Quality, Efficiency, and Volume, Health Affairs, 9/1/2012
Incentives 2.0: A Synergistic Approach to Provider Incentives, The Commonwealth Fund, 7/15/2014
Massachusetts General Physicians Organization’s Quality Incentive Program Produces Encouraging Results, Health Affairs, 10/1/2013
Measuring the Quality of Care in Medicare, MEDPAC, 6/1/2014
The Payment Reform Landscape: Value Oriented Payment Jumps, and Yet…, Health Affairs Blog, 9/30/2014
The Problem with ‘Pay for Performance’ in Medicine, The Upshot, The New York Times, 7/28/2014
Thinking Beyond Financial Rewards and Penalties, The Medical Professional Blog. ABIM Foundation, 9/4/2014
Time to Get Serious About Pay for Performance, The Journal of the American Medical Association, 1/23/2013
Using the Lessons of Behavioral Economics to Design More Effective Pay-for-Performance Programs, The American Journal of Managed Care, 7/17/2010
What Can the Past of Pay-for-Performance Tell Us About the Future of Value-Based Purchasing in Medicare?, Elsevier Inc, 5/9/2013
Two-Year Impact of the Alternative Quality Contract on Pediatric Health Care Qu ality and Spending, The Commonwealth Fund, 12/31/2014
Purpose vs. Payment: Motivating Change in Health Care, ABIM Foundation Forum, 1/1/2013
Physician Quality Reporting System (PQRS) Overview, Centers for Medicare & Medicaid, 1/1/2013
The Payment Reform Landscape: Pay- For-Performance., Health Affairs Blog, 3/4/2014
Payment Incentives and Integrated Care Delivery: Leve rs for Health System Reform and Cost Containment, Inquiry, 11/1/2011
Pay for Performance: The MedPAC Perspective, Health Affairs, 3/1/2006
A Case Study of a Team-Based, Quality-Focused Compensation Model for Primary Care Providers, Medical Care Research and Review, 11/13/2013
CMS- Engaging Multiple Payers in Payment Reform, The Journal of the American Medical Association, 4/21/2014
Ethical Physician Incentives – From Carrots and Stic ks to Shared Purpose, New England Journal of Medicine, 3/14/2013
Fact Sheets: Proposed Policy and Payment Changes to the Medicare Physician Fee Schedule for Calendar Year 2015, Centers for Medicare & Medicaid, 7/7/2014
Forty Percent of Payment to Physicians and Hospitals in the Commercial Sector Today is Designed to Improve Quality and Reduce Waste, Catalyst for Payment Reform, 9/30/2014
Framework for Progression of Payment to Clinicians and Organizations in Payment Reform, American Medical Association , 1/1/2014
The Growing Case for Using Physician Incentives to Im prove Health Care Quality, National Health Care Purchasing Institute, Robert Wood Johnson Foundation, , 1/21/2001
Medicaid Innovation: Delivery System Reform Incentive Pools, National Association of Medicaid Directors, 6/1/2014

Photos

Evidence for the effectiveness of the pay-for-performance model is variable,  Dr. Ashish Jha, professor of health policy, Harvard School of Public Health, stated at an October 14 Alliance briefing, Incentives 2.0: Is Paying for Performance Enough? To ensure that incentives work, he recommended targeting a small number of outcomes, structuring it right and playing into provider intrinsic motivations.

Quality metrics should drive the greatest response from providers. Instead of  pay for performance, maybe we should pay for improvement, Dr. Ateev Mehrotra, associate professor of health care policy and medicine, stated at an October 14 Alliance briefing, Incentives 2.0: Is Paying for Performance Enough?

In an evaluation of Fairview Medical Center’s compensation plan, providers ranked productivity, individual quality and team quality as most important factors in determining their compensation, Patrick Herson, president, Fairview Medical Group (Minnesota), stated at an October 14 Alliance briefing, Incentives 2.0: Is Paying for Performance Enough?

A new Alliance for Health Reform toolkit addresses concerns about whether newly-trained physicians are adequately prepared for today's evolving health care delivery system. Does training adequately emphasize care coordination, team-based care, costs of care, health information technology, cultural competence and quality improvement? Does it encourage students to practice in a primary care setting? Click the icon above to access the toolkit.

 

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