Last November, University of Pittsburgh and Harvard researchers published a major study in Annals of Internal Medicine showing that a Medicare pay-for-performance program did not improve quality or reduce cost and, to make matters worse, it actually penalized doctors for caring for the poorest and sickest patients because their “quality scores” suffered.
Full Answer
What are the benefits of pay for performance in healthcare?
Proponents of Pay for Performance share several benefits. P4P in healthcare stresses quality over quantity of care and allows healthcare payers to redirect funds to encourage best clinical practices and promote positive health outcomes.
What does Medicare do to improve quality of care?
Medicare has various initiatives to encourage improved quality of care in all health care settings where Medicare beneficiaries receive their health care services, including physicians’ offices and ambulatory care facilities, hospitals, nursing homes, home health care agencies and dialysis facilities.
Do pay-for-performance initiatives improve quality of care?
Pay-for-performance initiatives have been suggested as a way to improve the quality of patient care and provide incentives to improve providers' performance. The Centers for Medicare & Medicaid Services has endorsed such programs to improve quality of care. Objective
Are pay-for-performance incentive programs effective for improving health care quality?
As states continue to struggle with increasing health care costs and wide variation in health plan and physician performance, more and more are implementing "pay-for-performance" (P4P) incentive programs to reward care that meets evidence-based quality measures.
Does Medicare use pay-for-performance?
Modeled on the “Bridges to Excellence” program, this is a three-year pay-for-performance demonstration with physicians to promote the adoption and use of health information technology to improve the quality of patient care for chronically ill Medicare patients.
How will paying for performance affect patient care?
In terms of hospital-based patient utilization outcomes, researchers found that pay-for-performance programs were linked to initial hospital readmissions improvements. Medicare fee-for-service patients faced significantly less readmissions in the two years after Hospital Readmissions Reduction Program implementation.
What are the benefits of using pay-for-performance within healthcare?
Proponents of Pay for Performance share several benefits. P4P in healthcare stresses quality over quantity of care and allows healthcare payers to redirect funds to encourage best clinical practices and promote positive health outcomes.
What are the expected outcomes from applying pay-for-performance?
In theory, if properly targeted and designed, P4P programs would help drive the behavior of providers and health care systems to improve the quality of care delivered, reduce unnecessary use of expensive health care services, and improve patient health outcomes (1).
What are the pros and cons of pay-for-performance in healthcare?
As the origin of the pay for performance concept suggests, the healthcare providers' profit can be increased by better satisfying the consumers and government requirements. The main disadvantage of a pay for performance system is negative incentives.
What are the disadvantages of using a pay-for-performance plan?
The downsides of performance based compensation modelsIt may demotivate low-performing workers. ... It may shift the employees' focus from the company's goals to money. ... It may increase stress in your top-performing workers. ... It may affect your profits more than you've expected.
Why is pay-for-performance important?
Pay for performance aligns employees' compensation with their contributions at work, so they will produce more to receive more pay. Often, you will outline goals that you want them to meet within a certain period, which may also improve efficiency as employees try to complete more tasks in less time.
What are the pros and cons of fee-for-service?
Fee-For-service:ProsConsEncourages the delivery of care and maximizing patient visitsOffers little or no incentive to deliver efficient care or prevent unnecessary care2 more rows
What are the key components of a pay-for-performance system?
To be effective, every performance-based pay system must encompass a few key elements. These include clear objectives, a thorough performance process, and a tool to support your pay-for-performance initiatives.
Is the evidence on the effectiveness of pay-for-performance schemes in healthcare changing?
Results. There was evidence of an increase in the range of countries adopting P4P schemes and weak evidence that the proportion of studies with statistically significant effects have increased. Factors hypothesized to influence the success of schemes have not changed.
Does pay-for-performance work?
A study published in the Human Resource Management Journal revealed that workers who receive performance-based pay, such as those whose pay ties into individual or companywide performance, work harder but end up with higher stress levels and lower levels of job satisfaction.
What does pay-for-performance mean and how is it linked to performance or targets?
Pay for performance (P4P) schemes provide financial incentives to health workers or facilities based on the achievement of pre-specified performance targets and have been widely implemented in health systems across low and middle-income countries (LMICs).
Why is Pay for Performance important?
Pay for Performance systems also reduce job satisfaction and intrinsic motivation for clinicians and cause doctors and administrators to game the system.
How are hospitals scored?
Hospitals are scored on the various measures based on “improvement” and “achievement” where improvement compares them to their own scores during a baseline period, and achievement compares them to the scores of other hospitals. CMS uses the higher of the two scores to determine financial awards.
What is P4P in hospitals?
In P4P programs, hospitals are required to pay attention to a broad array of factors they aren’t incentivized to address in traditional FFS systems. There are two basic types of Pay for Performance designs being deployed for hospitals.
What is P4P in healthcare?
Pay for Performance in healthcare (P4P), also known as value-based payment, comprises payment models that attach financial incentives/disincentives to provider performance. P4P is part of the overall national strategy to transition healthcare to value-based medicine. While it still utilizes the fee-for-service system, ...
Does Medicare penalize hospitals with higher readmission rates?
Since rates of readmissions for specific care events vary significantly by hospital, Medicare began penalizing hospitals with higher rates of readmissions relative to all other acute-care hospitals under the Hospital Readmissions Reduction Program (HRRP).
What Impact Does Pay-For-Performance Have On Patient Quality?
The conclusion is…. Evidence from pay-for-performance programs has been lacking in regards to quality, and there is little evidence that the implementation of programs will help keep costs in check.
Why Is Pay-For-Performance Important In Healthcare?
Benefits are shared by the supporters of Pay for Performance. Patients and payers can redirect funds from healthcare funds to encourage best clinical practices and promote a positive environment in healthcare through Patient-Centered Physician-Rehabilitation.
How Quality Measures And Pay-For-Performance Affect Nursing Practice?
It is possible to shift towards more evidence-based practices and to obtain value by using nursing sensitive quality measures. This strategy can help hospitals achieve the best patient care possible due to the best existing patient care systems and facilities.
What Are The Pros And Cons Of Pay-For-Performance In Healthcare?
With better execution of the pay-for-performance model, healthcare providers’ profits are more likely to improve. Positive incentives are an advantage to pay for performance, but they are not an advantage.
How Does Pay-For-Performance Improve Quality Of Care?
It’s the financial incentive portion of the P4P strategy to improve healthcare quality in the United States [5. As a side goal of P4P, health practitioners are able to offer financial incentives to adhere to the most well-accepted best practices.
Is Pay-For-Performance Good Or Bad In Healthcare?
University of Pittsburgh and Harvard researchers published a very large study entitled “Payment for performance in primary care: harms outweigh benefits” last November, showing that Medicare pay-for-performance programs do not reduce healthcare costs or improve quality and, just as ironic of course, penalized doctors who cared for the
How Does Quality Measures And Pay-For-Performance Affect Nursing Practice?
A Care Transition Through Use of nursing sensitive quality measures can help hospitals establish proof of evidence-based practice and support their pursuit of value-based medicine. Reducing the number of measures in the process of tracking each one could also free up more time for other purposes.
Overview
The Affordable Care Act (ACA) authorized several new Medicare initiatives that use pay-for-performance (P4P) strategies to incentivize health care providers to reduce costs and improve quality.
Hospital Value-Based Purchasing Program (HVBP)
The Hospital Value-Based Purchasing (VBP) Program, applied under Medicare’s inpatient prospective payment system ( IPPS ), adjusts payments to hospitals based on CMS measures of quality of care furnished to patients.
Physician Compare Reporting
According to CMS, Physician Compare scores reflect clinician performance on the following measures:
Value-Based Physician Payment Modifier (VBPM)
According to CMS (2015), “Section 3007 of the Affordable Care Act mandated that, by 2015, CMS begin applying a Value Modifier under the Medicare PFS (Physician Fee Schedule)… We are applying the Value Modifier in 2015 based on performance in 2013 for groups of 100 or more eligible professionals (EPs).” The VBPM program adjusts a physician’s Medicare reimbursement up or down based on how he or she scores on quality and cost-effectiveness measures.
Hospital-Acquired Condition (HAC) Reduction Program
Section 3008 of the Patient Protection and Affordable Care Act (ACA) established the Hospital-Acquired Condition (HAC) Reduction Program to build upon an existing HAC program established under the Deficit Reduction Act (DRA) of 2005.
Hospital Readmissions Reduction Program (HRRP)
According to QualityNet, Section 3025 of the 2010 Affordable Care Act (Public Law 111-148) requires the Secretary of the Department of Health and Human Services to establish a Hospital Readmissions Reduction Program whereby the Secretary reduces Inpatient Prospective Payment System ( IPPS) payments to hospitals for excess readmissions beginning on or after October 1, 2012 (Fiscal Year [FY] 2013).
Medicare Advantage Plan Bonus Payments
Medicare Advantage Plan Bonus Payments. In 2012, Medicare Advantage plans began to receive bonus payments based on quality ratings. These payments were initially established in the 2010 health reform law that provides for bonus payments to plans that receive 4 or more stars and to unrated plans beginning in 2012.
When did Medicare phase out the value modifier?
The Value Modifier was phased out in January, when it was replaced by the similar Merit-based Incentive Payment System, known as the MIPS, the largest pay-for-performance program for physicians and practices ever enacted by Medicare.
What are the three central concerns of health reform?
Many health care reforms seek to simultaneously address three central concerns in contemporary care delivery: lowering costs, improving the quality of care and the health of patients, and expanding access to care.
Does the value modifier have any effect on equity?
The Value Modifier does not seem to have done anything to lower costs or improve care, and it may have made things worse for equity, the researchers said. This latest study, led by investigators from the Department of Health Care Policy at Harvard Medical School and the Department of Health Policy and Management at the University ...
Does Medicare have a promise?
A prototype Medicare program designed to improve the value of care by paying more to physicians who perform better on measures of health care quality and spending has failed to deliver on its central promise. In the process, it has likely exacerbated disparities in health care delivery, according to findings of a study published Nov. 27 in Annals of Internal Medicine.
Pay for Performance or Compliance? A Second Opinion on Medicare Reimbursement
Nothing in this title shall be construed to authorize any Federal officer or employee to exercise any supervision or control over the practice of medicine or the manner in which medical services are provided, or over the selection, tenure, or compensation of any officer or employee of any institution, agency, or person providing health services; or to exercise any supervision or control over the administration or operation of any such institution, agency, or person..
The Current Medicare Reimbursement System
Medicare's current reimbursement policy is a complex, formula-driven system of administrative pricing, central planning, and price controls. [5] It has three main features: the fee schedule, updates and controls, and balance billing restrictions.
Why is P4P used in Medicaid?
Beginning in 1991 with Wisconsin, states have been utilizing P4P in Medicaid as a way to "incentivize" the health plans with whom they contract to improve their performance. More recently, models are emerging by which states are focusing ...
What is P4P in healthcare?
The Centers for Medicare and Medicaid Services (CMS) defines P4P as "the use of payment methods and other incentives to encourage quality improvement and patient-focused high-value care." [ 1] .
What was the maximum bonus for 2005?
The maximum bonus payment is 3 percent of the premium.
What are the most common sources of nationally recognized measures used in P4P programs?
The National Quality Forum (NQF), the National Committee for Quality Assurance (NQCA), the Joint Commission on Accreditation of Healthcare Organizations (JCAHO), the Hospital Quality Alliance (HQA), and the Leapfrog Group are the most common sources of nationally recognized measures used in P4P programs.
Why is pay incentive important in primary care?
Management of chronic diseases, such as diabetes and heart disease, is important in improving patient health and reducing health care costs.
What are the benefits of P4P?
All are known to reduce long-term cardiovascular risk: aspirin or antithrombotic medication prescription, blood pressure control, cholesterol control, and smoking cessation interventions. For the P4P clinics, a financial incentive was paid to physicians when a patient met a quality goal.
What is P4P in healthcare?
One new health care model is pay-for-performance (P4 P), which provides financial incentives to clinicians for achieving better health outcomes. In the traditional “fee for service” model, doctors are paid a set amount regardless of patient outcomes.
