They found that the P4P hospitals showed modestly greater improvement in all composite measures of quality than hospitals that simply reported on measures. Specifically, improvements in the P4P hospitals ranged from 2.6% to 4.1% over two years. “The small gains in process of care measures observed in the study are unlikely to have translated into meaningful improvements in outcomes,” Dr. Lindenauer says.
Other studies of P4P are inconclusive. A literature review on the subject finds “little evidence to support the effectiveness of paying for quality.”2
A second literature review out of the Baylor College of Medicine in Houston based on 17 studies “suggests some positive effects of financial incentives at the physician level, the provider group level, and the healthcare payment system level. The findings also suggest that ongoing monitoring of incentive programs is critical to determine whether incentives are having unintended effects on quality of care.”3
Finally, a study of P4P programs for family practices in the United Kingdom revealed that serious financial incentives for physicians resulted in 83.4% achieving goals for 10 chronic diseases in a year.4
“There is no conclusive evidence that physician-level P4P works to improve quality of care and reduce cost of care,” concludes Dr. Torcson. “The U.K. experience demonstrates that given a sufficient incentive, physicians will adhere to and report on performance measures. Further study is being done to see if this translates into quality improvement for patients.”
The next phase of P4P is pay for reporting—which may help pin down the true value of P4P.
The Physician Quality Reporting Initiative (PQRI), now well under way, “is the first nationwide pay-for-performance program, and one of the first to include hospitalists,” says Dr. Torcson. “This is the first taste we’re all having of physician-level pay-for-performance since the PQRI started on July 1.”
The incentives for participating in the trial aren’t high. “Based on projections of PQRI reporting, hospitalists can earn a bonus of $807,” says Dr. Torcson. “This may not be a strong motivator to participate in PQRI. However, it’s a beginning. If you’re going to fail [at reporting], this is the time to do it.”
The PQRI trial is short; it will end Dec. 31. And early next year, it’s guaranteed that all eyes will be on outcomes from this program. “Private payers are watching this very closely; they’re ready to jump into the game,” says Dr. Torcson. Healthcare organizations and professionals should be ready to jump as well, because next steps for P4P and other payment factors are still unknown.
“What happens after Dec. 31 is wide open,” Dr. Torcson says. “We don’t know what to expect from Congress. Right now we’re looking at a proposed 9.8% cut to physician fees. Will this cut be made up by pay-for-performance bonuses? Congress determines what will happen, and the [2008] election could change everything.”
To date, P4P has not lived up to its hype; however, the use of incentives to improve quality is in the early stages. Time will tell if P4P pays off in improved care—but CMS and many physicians seem committed to the idea.
“I think there’s a lot to be said for the concept of providing incentives that encourage hospitals to invest in quality of care,” says Dr. Lindenauer. “Our current system of healthcare hasn’t done that.”
Dr. Lindenauer’s advice for moving ahead with P4P? “We need to proceed cautiously and be mindful of some of the unintended consequences,” he concludes. TH
Jane Jerrard has been writing for The Hospitalist since 2005.
References
- Lindenauer PK, Remus D, Roman S, et al. Public reporting and pay for performance in hospital quality improvement. N Engl J Med. 2007 Feb 1;356(5):486-496.
- Rosenthal MB, Frank RG. What is the empirical basis for paying for quality in health care? Med Care Res Rev. 2006;63(2):135-137.
- Petersen LA, Woodard LD, Urech T, et al. Does pay-for-performance improve the quality of health care? Ann Intern Med. 2006;145(4):265-272.
- Doran T, Fullwood C, Gravelle H, et al. Pay-for-performance programs in family practices in the United Kingdom. N Engl J Med. 2006;355(4):375-384.