Sign Up for Email Alerts Visit us on Twitter Visit us on Facebook Visit us on YouTube Subscribe to RSS Feeds

Home > Past Briefings > Briefing Detail Page

Briefing Detail Page

Change Text Size:   Smaller Text Size   Larger Text Size   Default Text Size    

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 202-789-2300

The event was sponsored by the nonpartisan Alliance for Health Reform and The Commonwealth Fund.
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


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.


Briefing for Reporters on State Health Initiatives

A governor met with reporters Friday, February 19 to discuss the latest health care innovations and changes they are pursuing or implementing. Gov. Asa Hutchinson, R-Ark., discussed his experience with the state's program to move newly eligible Medicaid beneficiaries to qualified health plans, and his intentions for changes moving forward.

Read More

Health Care Consolidation: What You Need to Know

A recent whirlwind of mergers and acquisitions has thrown health care industry consolidation into the spotlight. In 2014 alone, there were 1,299 mergers and acquisitions in the health care sector at a value of $387 billion, a new record. In this roundtable for reporters, featuring a top FTC official and two experts, panelists discussed the drivers behind this recent trend; the scope and extent of consolidation among doctors, hospitals and insurers; implications for consumers and other stakeholders; and the roles of the Department of Justice (DOJ) and the Federal Trade Commission (FTC).

Click here for video
Click here for transcript

Read More 

New Toolkit on Health Care Consolidation

There were 1,299 mergers and acquisitions in the health care sector in 2014 at a value of $387 billion, both record highs. A new Alliance for Health Reform toolkit, “Health Care Consolidation,” looks at the drivers behind this trend, as well as implications for key players in the health care system and regulatory issues surrounding the issue.  Critics argue that consolidation could have a harmful impact on consumers, including higher costs, while others say some amount of activity is necessary to reshape the health care industry following changes implemented by the Affordable Care Act.

Read More 

What Tools do Patients Need? Video

What is the key to creating a more consumer-friendly and patient-centered health care system? Leading experts address challenges and potential solutions in a new Alliance video featuring Benjamin Moulton of the Informed Medical Decisions Foundation, Robin Gelburd of FAIR Health, and Tim Skeen Anthem.

Click here for video.

Read More 

Video from Reporter Roundtable on Open Enrollment III

On October 5, speakers at a reporter roundtable held at the National Press Club on open enrollment III provided the latest information about premium trends and drivers, health plan availability and new comparison tools for consumers to use in choosing health plans. They discussed trends in the role of navigators and brokers, and increasing consumer expectations, particularly around the ease of the process.

Click here for video.

Read More 

Toolkit on Connection Between Health and Housing

A new Alliance toolkit, “The Connection between Health and Housing: The Evidence and Policy Landscape,” provides a detailed look into federal, state and local initiatives, as well as cost implications for health and housing programs.

Attempts to tie health and housing policy are gaining momentum, amid evidence that housing, a social determinant of health, is an important factor in the health status of various populations. More than 610,000 people experience homelessness in the U.S., and over 250,000 individuals within that population have a severe mental illness or a chronic substance use disorder, according to the Department of Housing and Urban Development.

Read More 

Toolkit on Biosimilars

The Alliance for Health Reform has released a new toolkit, “Biosimilars: Unpacking Complex Issues.”

The Affordable Care Act created an expedited licensure pathway for biosimilars, and, in March 2015, the U.S. approved the first biosimilar, leaving policy makers, regulators, providers and stakeholders to grapple with regulatory and financial questions.

Biosimilars are similar – but not identical – to biologic drugs, and cost less. Unlike traditional pharmaceuticals, biologic drugs are derived from living organisms and tissues, making them more complex and expensive to produce.

Read More 

Experts Discuss Workplace Wellness Programs

In a new interview video, Karen Pollitz, senior fellow, private insurance and health reforms, The Kaiser Family Foundation and Dan Newton, vice president, product/solutions development and behavior economics, Anthem Care Management discuss the impact of workplace wellness programs. They address questions about regulations and program design and analyze the scope of wellness programs.

Read More 

Toolkit on Long-Term Services and Supports (LTSS)

The aging of the baby boomers and the increase in the number of old-old persons (those 85 and older) are predictors for the increasing need for long-term services and supports (LTSS). Among persons age 65 and over, an estimated 70 percent will use LTSS. A new Alliance for Health Reform toolkit, “Long-Term Services and Supports: Changes and Challenges in Financing and Delivery,” provides a background on LTSS and discusses policy issues surrounding the topic.

Read More 

Copyright 1997-2016 Alliance for Health Reform
1444 Eye Street, NW, Suite 910 Washington, DC 20005-6573      202-789-2300      202-789-2233 fax      Sitemap