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| Archive : Fall
2006 |
FOR A FIVE-STAR RATING AND MAYBE A SMALL BONUS, DOCS MUST:
Track dozens of performance measures // Sift through hundreds of patient records // Swallow thousands of dollars in overhead costs—when all they want is to deliver better care.
The Quest for Quality [page 3]
 By Linda Keslar |
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Like Ernest Codman, many physicians routinely measure quality of care as a way to improve it. But today’s P4P experiments are largely being imposed from outside the profession, by insurers, government groups and quality watchdogs that cite as motivation two inescapable facts: Health care costs too much, and the quality of care ranges from outstanding to poor, depending upon who is providing it.
Spending on health care in the United States is expected to rise nearly 8% a year during the next 10 years, reaching $4 trillion by 2015—a staggering 20% of the nation’s projected gross domestic product (GDP)—according to a recent study by economists at CMS. “We’re paying 50% more than any other country per capita and as a percentage of GDP for health care,” says Robert Berenson, a physician and senior fellow at the Urban Institute in Washington, D.C. “Yet there are serious quality problems.”
For example, researchers at Dartmouth Medical School in Hanover, N.H., who have been analyzing Medicare data for more than 20 years, recently estimated that as many as a third of Medicare dollars are wasted on unnecessary or inappropriate care. Other analysts put the figure as high as 40%—and the statistics don’t improve when you look beyond Medicare.
Meanwhile, corporate America, burdened by its promise to finance care for legions of past and present workers, is desperate to contain costs. That’s why GM, which underwrites care for 1.1 million current and retired employees and in 2005 paid out $5.3 billion in medical expenses, has jumped on the P4P bandwagon.
GM is involved in P4P initiatives through contracts with more than 100 health plans, a signal that ensuring quality and improving care isn’t optional for insurers that want to work with the company. “We’ve built into our expectations that they show us how they reward providers for performance, and that gets to measurement, public disclosure and so on,” says Bruce Bradley, director of health care and public policy for the automaker.
François de Brantes, formerly of GE and now national coordinator for Bridges to Excellence, says the idea of P4P makes sense to many companies because it mirrors the market-driven approach they use in other parts of their businesses, providing financial incentives to improve quality and lower costs. Increasing numbers of employers, he says, think consumers can be motivated to seek out efficient, better-quality care. But that means finding appropriate ways to reward physicians for providing such care—and that’s problematic, for several reasons.
First, most doctors involved in P4P programs believe that too little money is at stake to justify the extra work and expense. Often, it seems, health plans aren’t putting additional dollars into P4P programs but, rather, cutting everyone’s compensation, then returning some of the lost money to those who meet quality requirements. (Opponents of pay for performance characterize such programs as “no pay for no performance.”) There’s also the question of who gets more—practices that consistently deliver high-quality care or those that show the greatest improvement—and whether to reward medical groups or individual physicians.
One long-term study of seven of the nation’s most advanced P4P programs suggests that to have the desired impact, P4P incentive programs need to account for at least 10% of a physician’s annual income. That’s about how much is at stake for achieving annual quality and efficiency targets at Partners HealthCare (parent of the Massachusetts General Hospital), where more than 5,000 physicians participate in some form of P4P. They’re motivated by around $90 million in annual hospital and physician payments that are withheld pending compliance with a long list of quality measures. “We have a lot of patients and a lot of money at risk,” says Thomas Lee, a cardiologist and CEO of Partners Community Healthcare, the network of physicians associated with Partners HealthCare. “Though the money ostensibly comes in the form of bonuses for good performance, it’s really the opposite—losses if we don’t perform.” |
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Photo by Sarah A. Friedman |
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