Cost-effectiveness of hospital pay-for-performance incentives

Value-based surgery physician compensation model: Review of the literature

BACKGROUND

In recent history, healthcare payment reform and legislative initiatives have drastically altered the practice environment for many physicians. Individual providers have migrated from self-managed smaller practices toward employed positions with larger entities, in which provider productivity is tracked. In academic institutions, surgical departments are tasked with meeting clinical productivity metrics while maintaining research and education missions. The objective was to review the current literature regarding the status of physician compensation.

METHODS

A narrative review of the literature with a defined search strategy using Pubmed and MEDLINE was performed. Using keywords of physician reimbursement, physician compensation, performance-based incentives, relative value unit, RVU, searches were completed and subsequently reviewed by the authors for inclusion. Subsequently, all review articles had their included studies hand searched by the research team and any relevant articles were included in our review.

RESULTS

In total, fifteen papers were deemed to meet inclusion criteria. Articles were then divided into 7 domains (Origins of the Work Relative Value Unit, Adjusting for Clinical Complexity, Alternative Compensation Strategies, Aligning Compensation with Department Goals, Individual versus Group Incentives, Minimizing Complexity, Maximize Efficiency, Minimize Loss).

CONCLUSION

As external powers continue to apply pressure to surgeon compensation, leaders have had to increasingly focus on clinical productivity, while the missions of research and education become more neglected. One solution could be the development of metrics to best align incentives for clinical, research, and education activities with institutional goals.

Intraorganization conflicts of interest in hospitals adapting to a changing ecosystem

PURPOSE

Health systems function in an ecosystem that is turbulent and competitive because of demographic, economic, political, technological and lifestyle changes and sociopolitical influences, requiring hospitals to adopt comprehensive business strategies. Failure to do so may result in duplication, waste and deficits. This original article uses the prism of agency theory to examine differences in approach at two levels of hospital management and the consequent problems in the incorporation of necessary changes. Agency theory posits an inherent conflict of interest in organizations, including health organizations: the managers (agents) always aim to maximize their profit or personal interest instead of that of the owner or organization (principal), potentially causing difficulty in managing the organization. The aim is to generate recommendations for policymakers.

DESIGN/METHODOLOGY/APPROACH

The study is based on 30 semi-structured, in-depth interviews with key figures in the health system and on two levels of hospital management: senior managers and heads of selected departments. The analysis used a categorical qualitative methodology.

FINDINGS

The main findings are five key themes: views of business behavior, asymmetry of interests, asymmetry of information, transparency and cooperation between various levels of management and ambivalence toward business in hospitals. The two levels of management are clearly divided in terms of interests, information and activity, leading to difficulty in cooperation, efficiency and achievement of organizational goals.

ORIGINALITY/VALUE

Using agency theory, this study provides a systemic and organizational view of hospitals' management and environmental adaptation. Understanding the processes and increasing cooperation at various managerial levels can help make the system more efficient and ensure its survival in a dynamic market.

The hospital management practices in Chinese county hospitals and its association with quality of care, efficiency and finance

Background

County hospitals as the backbone of the China’s healthcare system are providing services for over 70% of the total population. However, the hospital management practice (HMP) and its links with quality of care, efficiency and finance in these hospitals are unknown.

Methods

We did two cross-sectional surveys of HMP in 2013 and 2015 among 101 county hospitals across rural China. Three managing roles (hospital director, director of medical affairs office and director of cardiology) and a cardiologist were invited to the surveys. A novel HMP rating scale, with 100 as full score, was used to measure the HMP in 17 indicators under four dimensions (target, operation, performance, and talent management) for each hospital. We analyzed the association of HMP score with variables on quality of care, efficiency and finance using linear mixed models with and without adjustment for potential confounders.

Findings

A total of 95 hospitals participated in at least one survey and were included in the analysis. The overall mean HMP score varied dramatically across the hospitals and 84% of them scored less than 60. The dimension mean HMP score was 38.6 (target), 56.4 (operation), 53.2 (performance) and 55.7 (talent), respectively. The pattern of indicator mean HMP score, however, was almost identical between hospitals with high and low overall HMP score, showing the same ‘strength’ (staff satisfaction, staff performance appraisal, ‘hard wares’, patient-centered services, etc.) and ‘weakness’ (target balance, target setting, continuous quality improvement, penalties on staff with dissatisfied performance, etc.). The associations of overall mean HMP score with quality of care and efficiency variables and cost per hospitalization was not statistically significant. The statistical significance in the association with hospital annual total income disappeared after adjusting for region, teaching status, number of competitors, number of staff and number of beds in use.

Conclusion

The HMP in Chinese county hospitals scores low in general and was not significantly associated with hospital care quality, efficiency and finance. The current healthcare reform in China should address the micro level issues in hospital management practices.

Supplementary Information

The online version contains supplementary material available at 10.1186/s12913-021-06472-7.

Early Performance of Hospital Value-based Purchasing Program in Medicare: A Systematic Review

BACKGROUND

Under the Affordable Care Act, the Centers for Medicare and Medicaid Services has greatly expanded inpatient fee-for-value programs including the Hospital Value-based Purchasing (HVBP) program. Existing evidence from the HVBP program is mixed. There is a need for a systematic review of the HVBP program to inform discussions on how to improve the program's effectiveness.

OBJECTIVE

To review and summarize studies that evaluated the HVBP program's impact on clinical processes, patient satisfaction, costs and outcomes, or assessed hospital characteristics associated with performance on the program.

DESIGN

We searched the MEDLINE/PubMed, Scopus, ProQuest database for literature published between January 2013 and July 2019 using the Preferred Reporting Items for Systematic Reviews and Meta-Analysis guidelines.

RESULTS

Of 988 studies reviewed, 33 studies that met the selection criteria were included. A small group of studies (n=7) evaluated the impact of the HVBP program, and no impact on processes or patient outcomes was reported. None of the included studies evaluated the effect of HVBP program on health care costs. Other studies (n=28) evaluated the hospital characteristics associated with HVBP performance, suggesting that safety-net hospitals reportedly performed worse on several quality and cost measures. Other hospital characteristics' associations with performance were unclear.

CONCLUSIONS

Our findings suggest that the current HVBP does not lead to meaningful improvements in quality of care or patient outcomes and may negatively affect safety-net hospitals. More rigorous and comprehensive adjustment is needed for more valid hospital comparisons.

At what cost is performance-based financing implemented? Novel evidence from Malawi

Our study estimated the full economic cost of implementing performance-based financing [PBF, the Support for Service Delivery Integration Performance-Based Incentives (SSDI-PBI) programme], as a means of first introducing strategic purchasing in a low-income setting, Malawi. Our analysis distinguished design from implementation costs and traces costs across personnel and non-personnel cost categories over the 2012-15 period. The full cost of the SSDI-PBI programme amounted to USD 3 402 187, equivalent to USD 6.46 per targeted beneficiary. The design phase accounted for about one-third (USD 1 161 332) of the total costs, while the incentives (USD 1 140 436) represented about one-third of the total cost of the intervention and about half the cost of the implementation phase. With a cost of USD 1 605 178, personnel costs represented the dominant cost category. Our study indicated that the introduction of PBF entailed consumption of a substantial amount of resources, hence representing an important opportunity cost for the health system.

Modelling the cost-effectiveness of pay-for-performance in primary care in the UK

BACKGROUND

Introduced in 2004, the United Kingdom's (UK) Quality and Outcomes Framework (QOF) is the world's largest primary-care pay-for-performance programme. Given some evidence of the benefits and the substantial costs associated with the QOF, it remains unclear whether the programme is cost-effective. Therefore, we assessed the cost-effectiveness of continuing versus stopping the QOF.

METHODS

We developed a lifetime simulation model to estimate quality-adjusted life years (QALYs) and costs for a UK population cohort aged 40-74 years (n = 27,070,862) exposed to the QOF and for a counterfactual scenario without exposure. Based on a previous retrospective cross-country analysis using data from 1994 to 2010, we assumed the benefits of the QOF to be a change in age-adjusted mortality of -3.68 per 100,000 population (95% confidence interval -8.16 to 0.80). We used cost-effectiveness thresholds of £30,000/QALY, £20,000/QALY and £13,000/QALY to determine the optimal strategy in base-case and sensitivity analyses.

RESULTS

In the base-case analysis, continuing the QOF increased population-level QALYs and health-care costs yielding an incremental cost-effectiveness ratio (ICER) of £49,362/QALY. The ICER remained >£30,000/QALY in scenarios with and without non-fatal outcomes or increased drug costs, and under differing assumptions about the duration of QOF benefit following its hypothetical discontinuation. The ICER for continuing the programme fell below £30,000/QALY when QOF incentive payments were 36% lower (while preserving QOF mortality benefits), and in scenarios where the QOF resulted in substantial reductions in health-care spending or non-fatal cardiovascular disease events. Continuing the QOF was cost-effective in 18%, 3% and 0% of probabilistic sensitivity analysis iterations using thresholds of £30,000/QALY, £20,000/QALY and £13,000/QALY, respectively.

CONCLUSIONS

Compared to stopping the QOF and returning all associated incentive payments to the National Health Service, continuing the QOF is not cost-effective. To improve population health efficiently, the UK should redesign the QOF or pursue alternative interventions.

Characterization and effectiveness of pay-for-performance in ophthalmology: a systematic review

Background

To identify, characterize and compare existing pay-for-performance approaches and their impact on the quality of care and efficiency in ophthalmology.

Methods

A systematic evidence-based review was conducted. English, French and German written literature published between 2000 and 2015 were searched in the following databases: Medline (via PubMed), NCBI web site, Scopus, Web of Knowledge, Econlit and the Cochrane Library. Empirical as well as descriptive articles were included. Controlled clinical trials, meta-analyses, randomized controlled studies as well as observational studies were included as empirical articles. Systematic characterization of identified pay-for-performance approaches (P4P approaches) was conducted according to the “Model for Implementing and Monitoring Incentives for Quality” (MIMIQ). Methodological quality of empirical articles was assessed according to the Critical Appraisal Skills Programme (CASP) checklists.

Results

Overall, 13 relevant articles were included. Eleven articles were descriptive and two articles included empirical analyses. Based on these articles, four different pay-for-performance approaches implemented in the United States were identified. With regard to quality and incentive elements, systematic comparison showed numerous differences between P4P approaches. Empirical studies showed isolated cost or quality effects, while a simultaneous examination of these effects was missing.

Conclusion

Research results show that experiences with pay-for-performance approaches in ophthalmology are limited. Identified approaches differ with regard to quality and incentive elements restricting comparability. Two empirical studies are insufficient to draw strong conclusions about the effectiveness and efficiency of these approaches.

Electronic supplementary material

The online version of this article (doi:10.1186/s12913-017-2333-x) contains supplementary material, which is available to authorized users.

Cardiovascular Disease Prevention: The Role of Policy Interventions

OPINION STATEMENT

Health outcomes in cardiovascular disease in the USA have generally been improving over the past several decades. Those gains have been related to both developments in prevention and treatment of cardiovascular disease. To further enhance improvement in health outcomes, including cardiovascular outcomes, health policies have been implemented to incentivize prevention. These policies have strong conceptual appeal and have been associated with improvements in some health metrics. However, robust research methods, accounting for bias and statistical confounding, are critical to confirm that these policies are associated with prevention of cardiovascular events for patients over time.

In Tanzania, the many costs of pay-for-performance leave open to debate whether the strategy is cost-effective

Pay-for-performance programs in health care are widespread in low- and middle-income countries. However, there are no studies of these programs' costs or cost-effectiveness. We conducted a cost-effectiveness analysis of a pay-for-performance pilot program in Tanzania and modeled costs of its national expansion. We reviewed project accounts and reports, interviewed key stakeholders, and derived outcomes from a controlled before-and-after study. In 2012 US dollars, the financial cost of the pay-for-performance pilot was $1.2 million, and the economic cost was $2.3 million. The incremental cost per additional facility-based birth ranged from $540 to $907 in the pilot and from $94 to $261 for a national program. In a low-income setting, the costs of managing the program and generating and verifying performance data were substantial. Pay-for-performance programs can stimulate the generation and use of health information by health workers and managers for strategic planning purposes, but the time involved could divert attention from service delivery. Pay-for-performance programs may become more cost-effective when integrated into routine systems over time.

Barriers to universal health coverage in Republic of Moldova: a policy analysis of formal and informal out-of-pocket payments

BACKGROUND

Universal Health Coverage seeks to assure that everyone can obtain the health services they need without financial hardship. Countries which rely heavily on out-of-pocket (OOP) payments, including informal payments (IP), to finance total health expenditures are not likely to achieve universal coverage. The Republic of Moldova is committed to promoting universal coverage, reducing inequities, and expanding financial protection. To achieve these goals, the country must reduce the proportion of total health expenditures paid by households. This study documents the extent of OOP payments and IP in Moldova, analyses trends over time, and identifies factors which may be driving these payments.

METHODS

The study includes analysis of household budget survey data and previous research and policy documents. The team also conducted a review of administrative law intended to control OOP payments and IPs. Focus groups, interviews, and a policy dialogue with key stakeholders were held to validate and discuss findings.

RESULTS

OOP payments account for 45% of total health expenditures. Sixteen percent of outpatients and 30% of inpatients reporting that they made OOP payments when seeking care at a health facility in 2012, more than two-thirds of whom also reported paying for medicines at a pharmacy. Among those who paid anything, 36% of outpatients and 82% of inpatients reported paying informally, with the proportion increasing over time for inpatient care. Although many patients consider these payments to be gifts, around one-third of IPs appear to be forced, posing a threat to health care access. Patients perceive that payments are driven by the limited list of reimbursable medicines, a desire to receive better treatment, and fear or extortion. Providers suggested irrational prescribing and ordering of tests as drivers. Providers may believe that IPs are gifts and do not cause harm for patients and the health system in general.

CONCLUSIONS

Efforts to expand financial protection should focus on reducing household spending on medicines and hospital-based IPs. Reforms should consider ways to reduce medicine prices and promote rational use, strengthen administrative controls, and increase incentives for quality health care provision.

Cost-Effectiveness of a Diabetes Pay-For-Performance Program in Diabetes Patients with Multiple Chronic Conditions

Pay for performance (P4P) has been used as a strategy to improve quality for patients with chronic illness. Little was known whether care provided to individuals with multiple chronic conditions in a P4P program were cost-effective. This study investigated cost effectiveness of a diabetes P4P program for caring patients with diabetes alone (DM alone) and diabetes with comorbid hypertension and hyperlipidemia (DMHH) from a single payer perspective in Taiwan. Analyzing data using population-based longitudinal databases, we compared costs and effectiveness between P4P and non-P4P diabetes patient groups in two cohorts. Propensity score matching (PSM) was used to match comparable control groups for intervention groups. Outcomes included life-years, quality-adjusted life-years (QALYs), program intervention costs, cost-savings and incremental cost-effectiveness ratios (ICERs). QALYs for P4P patients and non-P4P patients were 2.80 and 2.71 for the DM alone cohort and 2.74 and 2.66 for the DMHH patient cohort. The average incremental intervention costs per QALYs was TWD$167,251 in the DM alone cohort and TWD$145,474 in the DMHH cohort. The average incremental all-cause medical costs saved by the P4P program per QALYs were TWD$434,815 in DM alone cohort and TWD$506,199 in the DMHH cohort. The findings indicated that the P4P program for both cohorts were cost-effective and the resulting return on investment (ROI) was 2.60:1 in the DM alone cohort and 3.48:1 in the DMHH cohort. We conclude that the diabetes P4P program in both cohorts enabled the long-term cost-effective use of resources and cost-savings, especially for patients with multiple comorbid conditions.

CMS reimbursement reform and the incidence of hospital-acquired pulmonary embolism or deep vein thrombosis

BACKGROUND

In October 2008, the Centers for Medicare & Medicaid Services (CMS) stopped reimbursing hospitals for the marginal cost of treating certain preventable hospital-acquired conditions.

OBJECTIVE

This study evaluates whether CMS's refusal to pay for hospital-acquired pulmonary embolism (PE) or deep vein thrombosis (DVT) resulted in a lower incidence of these conditions.

DESIGN

We employ difference-in-differences modeling using 2007-2009 data from the Nationwide Inpatient Sample, an all-payer database of inpatient discharges in the U.S. Discharges between 1 January 2007 and 30 September 2008 were considered "before payment reform;" discharges between 1 October 2008 and 31 December 2009 were considered "after payment reform." Hierarchical regression models were fit to account for clustering of observations within hospitals.

PARTICIPANTS

The "before payment reform" and "after payment reform" incidences of PE or DVT among 65-69-year-old Medicare recipients were compared with three different control groups of: a) 60-64-year-old non-Medicare patients; b) 65-69-year-old non-Medicare patients; and c) 65-69-year-old privately insured patients. Hospital reimbursements for the control groups were not affected by payment reform.

INTERVENTION

CMS payment reform for hospital-based reimbursement of patients with hip and knee replacement surgeries.

MAIN MEASURES

The outcome was the incidence proportion of hip and knee replacement surgery admissions that developed pulmonary embolism or deep vein thrombosis.

KEY RESULTS

At baseline, pulmonary embolism or deep vein thrombosis were present in 0.81% of all hip or knee replacement surgeries for Medicare patients aged 65-69 years old. CMS payment reform resulted in a 35% lower incidence of hospital-acquired pulmonary embolism or deep vein thrombosis in these patients (p = 0.015). Results were robust to sensitivity analyses.

CONCLUSION

CMS's refusal to pay for hospital-acquired conditions resulted in a lower incidence of hospital-acquired pulmonary embolism or deep vein thrombosis after hip or knee replacement surgery. Payment reform had the desired direction of effect.

The cost-effectiveness of using financial incentives to improve provider quality: a framework and application

Despite growing adoption of pay-for-performance (P4P) programmes in health care, there is remarkably little evidence on the cost-effectiveness of such schemes. We review the limited number of previous studies and critique the frameworks adopted and the narrow range of costs and outcomes considered, before proposing a new more comprehensive framework, which we apply to the first P4P scheme introduced for hospitals in England. We emphasise that evaluations of cost-effectiveness need to consider who the residual claimant is on any cost savings, the possibility of positive and negative spillovers, and whether performance improvement is a transitory or investment activity. Our application to the Advancing Quality initiative demonstrates that the incentive payments represented less than half of the £ 13 m total programme costs. By generating approximately 5200 quality-adjusted life years and £ 4.4 m of savings in reduced length of stay, we find that the programme was a cost-effective use of resources in its first 18 months.

Impact of the Iranian hospital grading system on hospitals' adherence to audited standards: an examination of possible mechanisms

INTRODUCTION

All Iranian hospitals have been subject to a grading system which determines the payments they can charge. We examined all possible pathways through which the grading system could influence hospitals' adherence to audited standards.

METHODS

Using a mixed methods study we examined five stakeholder groups: hospital staff, patients, general practitioners, health insurance organisations and surveyor organisations. Data were collected via semi-structured interviews, a questionnaire survey, observation and documentary analysis.

FINDINGS

Patients and general practitioners were generally unaware of the hospital grading. Hospital staff and insurance organisations were informed, but this was not found to influence the hospital staff's choice of where to work nor the insurance organisations contracting behaviour. The grading system was criticised for the performance standards' validity and the validity of hospitals' awarded results. Hospitals responded to financial and reputational incentives for achieving better grades, although gaming and misrepresentation was also reported.

CONCLUSION

Pay-for-performance was the main influential factor in shaping hospitals' adherence to audit standards. Other potential mechanisms for influencing hospital behaviour, the selection mechanism and intrinsic motives, were not found to be sufficient to affect hospital behaviour.

Using pay for performance to improve treatment implementation for adolescent substance use disorders: results from a cluster randomized trial

OBJECTIVE

To test whether pay for performance (P4P) is an effective method to improve adolescent substance use disorder treatment implementation and efficacy.

DESIGN

Cluster randomized trial.

SETTING

Community-based treatment organizations.

PARTICIPANTS

Twenty-nine community-based treatment organizations, 105 therapists, and 986 adolescent patients (953 with complete data).

INTERVENTION

Community-based treatment organizations were assigned to 1 of the following conditions: the implementation-as-usual (IAU) control condition or the P4P experimental condition. In addition to delivering the same evidence-based treatment (ie, using the Adolescent Community Reinforcement Approach [A-CRA]), each organization received standardized levels of funding, training, and coaching from the treatment developers. Therapists in the P4P condition received US $50 for each month that they demonstrated competence in treatment delivery (ie, A-CRA competence) and US $200 for each patient who received a specified number of treatment procedures and sessions (ie, target A-CRA) that has been found to be associated with significantly improved patient outcomes.

MAIN OUTCOME MEASURES

Outcomes included ACRA competence (ie, a therapist-level implementation measure), target A-CRA (ie, a patient-level implementation measure), and remission status (ie, a patient-level treatment effectiveness measure).

RESULTS

Relative to therapists in the IAU control condition, therapists in the P4P condition were significantly more likely to demonstrate A-CRA competence (24.0% vs 8.9%; event rate ratio, 2.24; 95% CI, 1.12- 4.48; P=.02). Relative to patients in the IAU control condition, patients in the P4P condition were significantly more likely to receive target A-CRA (17.3% vs 2.5%; odds ratio, 5.19; 95% CI, 1.53-17.62; P=.01). However, no significant differences were found between conditions with regard to patients' end-of-treatment remission status.

CONCLUSION

Pay for performance can be an effective method of improving treatment implementation.

TRIAL REGISTRATION

clinicaltrials.gov Identifier: NCT01016704

Performance contracting and quality improvement in outpatient treatment: effects on waiting time and length of stay

We evaluate the effects of a performance contract (PC) implemented in Delaware in 2001 and participation in quality improvement (QI) programs on waiting time for treatment and length of stay (LOS) using client treatment episode level data from Delaware (n = 12,368) and Maryland (n = 147,151) for 1998-2006. Results of difference-in-difference analyses indicate that waiting time declined 13 days following the PC, after controlling for client characteristics and historical trends. Participation in the PC and a formal QI program was associated with a decrease of 20 days. LOS increased 22 days under the PC and 24 days under the PC and QI programs, after controlling for client characteristics. The PC and QI programs were associated with improvements in LOS and waiting time, although we cannot determine which aspects of the programs (incentives, training, and monitoring) resulted in these changes.

Economic evaluation of pay-for-performance in health care: a systematic review

BACKGROUND

Pay-for-performance (P4P) intents to stimulate both more effective and more efficient health care delivery. To date, evidence on whether P4P itself is an efficient method has not been systematically analyzed.

OBJECTIVE

To identify and analyze the existing literature regarding economic evaluation of P4P.

DATA SOURCES

English, German, Spanish, and Turkish language literature were searched in the following databases: Business Source Complete, the Cochrane Library, Econlit, ISI web of knowledge, Medline (via PubMed), and PsycInfo (January 2000-April 2010).

STUDY SELECTION

Articles published in peer-reviewed journals and describing economic evaluations of P4P initiatives. Full economic evaluations, considering costs and consequences of the P4P intervention simultaneously, were the prime focus. Additionally, comparative partial evaluations were included if costs were described and the study allows for an assessment of consequences. Both experimental and observational studies were considered.

RESULTS

In total, nine studies could be identified. Three studies could be regarded as full economic evaluations, and six studies were classified as partial economic evaluations. Based on the full economic evaluations, P4P efficiency could not be demonstrated. Partial economic evaluations showed mixed results, but several flaws limit their significance. Ranges of costs and consequences were typically narrow, and programs differed considerably in design. Methodological quality assessment showed scores between 32% and 65%.

CONCLUSION

The results show that evidence on the efficiency of P4P is scarce and inconclusive. P4P efficiency could not be demonstrated. The small number and variability of included studies limit the strength of our conclusions. More research addressing P4P efficiency is needed.

Role of pay-for-performance in a hospital performance measurement system: a multiple case study in Iran

Pay for performance (P4P) is becoming increasingly popular in the health care sector as a tool for encouraging performance (especially quality) improvement. Evidence about the effect of policies in hospitals is rare and generally confined to developed countries. The Iranian hospital grading system, which links the charges hospitals can make for patient stay to the results of their annual performance grading, is one of the earliest examples of P4P in the world. We report here the first evaluation of the impact of the Iranian P4P system. We conducted a multiple case study using semi-structured interviews and observation in four hospitals with different ownership and grading results, to explore responses to the grading system and the P4P policy. The data were analysed using framework analysis assisted by Atlas-ti software. The findings showed hospital behaviour was influenced by and changed in response to P4P policy, despite serious concerns about the validity of the grading standards. The main driver for such changes was hospital revenue, which acted as a direct financial incentive for private hospital managers and as a factor for public hospital managers' sense of success and reputation. Frontline staff were motivated indirectly by higher revenue flowing into investment in better facilities and working environment. Other potential mechanisms by which the grading system could have influenced behaviour [such as patient and General Practitioner (GP) referral choice] did not appear to influence hospital behaviour.

Designing an effective pay-for-performance system in the Korean National Health Insurance

The challenge facing the Korean National Health Insurance includes what to spend money on in order to elevate the 'value for money.' This article reviewed the changing issues associated with quality of care in the Korean health insurance system and envisioned a picture of an effective pay-for-performance (P4P) system in Korea taking into consideration quality of care and P4P systems in other countries. A review was made of existing systematic reviews and a recent Organization for Economic Cooperation and Development survey. An effective P4P in Korea was envisioned as containing three features: measures, basis for reward, and reward. The first priority is to develop proper measures for both efficiency and quality. For further improvement of quality indicators, an electronic system for patient history records should be built in the near future. A change in the level or the relative ranking seems more desirable than using absolute level alone for incentives. To stimulate medium- and small-scale hospitals to join the program in the next phase, it is suggested that the scope of application be expanded and the level of incentives adjusted. High-quality indicators of clinical care quality should be mapped out by combining information from medical claims and information from patient registries.

Optimal care of patients with non-small cell lung cancer reduces perioperative morbidity

OBJECTIVE

The objective is to test the concept of "pay for performance" for patients with non-small cell lung cancer.

METHODS

We constructed 53 benchmark performance standards (10 labeled "critical") and prospectively assessed the effect of adherence to these standards on morbidity and mortality for patients undergoing resection of non-small cell lung cancer.

RESULTS

Between January 1, 2007, and December 31, 2009, 778 patients with non-small cell lung cancer underwent thoracotomy by 1 surgeon. Ninety-seven percent of patients received all 26 of the "day of surgery" and "intraoperative" benchmarks, and those were the easiest to deliver. The 469 patients who had all 53 benchmarks delivered, compared with the 309 who did not, had a lower mortality (2.0% vs 2.3%) and morbidity (16% vs 44%; P < .001). The 693 patients who received all 10 "critical" benchmarks, compared with the 85 who did not, had a lower mortality (1.9% vs 4.7%) and morbidity (25% vs 41%; P = .003). Low household income and fewer than 2 people in the household were predictors of overall morbidity on univariate analysis.

CONCLUSIONS

Most benchmarks, especially "day of surgery" and "intraoperative" ones, can be delivered in more than 97% of patients. The delivery of benchmarks reduces perioperative morbidity but not mortality. Socioeconomic factors are predictors of overall morbidity. Operative mortality is related to the "quality of the patient" and the "quality of the health care provider."

Systematic review: Effects, design choices, and context of pay-for-performance in health care

BACKGROUND

Pay-for-performance (P4P) is one of the primary tools used to support healthcare delivery reform. Substantial heterogeneity exists in the development and implementation of P4P in health care and its effects. This paper summarizes evidence, obtained from studies published between January 1990 and July 2009, concerning P4P effects, as well as evidence on the impact of design choices and contextual mediators on these effects. Effect domains include clinical effectiveness, access and equity, coordination and continuity, patient-centeredness, and cost-effectiveness.

METHODS

The systematic review made use of electronic database searching, reference screening, forward citation tracking and expert consultation. The following databases were searched: Cochrane Library, EconLit, Embase, Medline, PsychINFO, and Web of Science. Studies that evaluate P4P effects in primary care or acute hospital care medicine were included. Papers concerning other target groups or settings, having no empirical evaluation design or not complying with the P4P definition were excluded. According to study design nine validated quality appraisal tools and reporting statements were applied. Data were extracted and summarized into evidence tables independently by two reviewers.

RESULTS

One hundred twenty-eight evaluation studies provide a large body of evidence -to be interpreted with caution- concerning the effects of P4P on clinical effectiveness and equity of care. However, less evidence on the impact on coordination, continuity, patient-centeredness and cost-effectiveness was found. P4P effects can be judged to be encouraging or disappointing, depending on the primary mission of the P4P program: supporting minimal quality standards and/or boosting quality improvement. Moreover, the effects of P4P interventions varied according to design choices and characteristics of the context in which it was introduced.Future P4P programs should (1) select and define P4P targets on the basis of baseline room for improvement, (2) make use of process and (intermediary) outcome indicators as target measures, (3) involve stakeholders and communicate information about the programs thoroughly and directly, (4) implement a uniform P4P design across payers, (5) focus on both quality improvement and achievement, and (6) distribute incentives to the individual and/or team level.

CONCLUSIONS

P4P programs result in the full spectrum of possible effects for specific targets, from absent or negligible to strongly beneficial. Based on the evidence the review has provided further indications on how effect findings are likely to relate to P4P design choices and context. The provided best practice hypotheses should be tested in future research.

Pay for performance in Medicare: evidentiary irony and the politics of value

Pay for performance (P4P) is of growing importance in the Medicare program. Pay-for-performance policy has the support of political actors in both parties and in the legislative and executive branches; of experts, business, and consumer interests; and in a qualified way, of health care providers. The evidence that P4P improves quality or reduces cost, however, is scant, although P4P proponents claim that the program is evidence based. This article reviews the history of Medicare P4P, documents its widespread support, and evaluates both the evidence of its effectiveness and the expert discourse about that evidence. The article analyzes the political reasons for Medicare P4P's popularity despite its evidentiary deficiencies and emphasizes its role in the politics of value. Pay for performance allows Medicare policy makers to (1) reformulate intractable cost and quality problems as more malleable value problems; (2) offer an acceptable quid pro quo for payment negotiations with providers; and (3) reach a rare, if shallow, consensus based on the ideological ambiguity of P4P.

Pay for performance in the hospital setting: what is the state of the evidence?

More than 40 private sector hospital pay-for-performance (P4P) programs now exist, and Congress is considering initiating a Medicare hospital P4P program. Given the growing interest in hospital P4P, this systematic review of the literature examines the current state of knowledge about the effect of P4P on clinical process measures, patient outcomes and experience, safety, and resource utilization. Little formal evaluation of hospital P4P has occurred, and most of the 8 published studies have methodological flaws. The most rigorous studies focus on clinical process measures and demonstrate that hospitals participating in the Centers for Medicare and Medicaid Services-Premier Hospital Quality Incentive Demonstration, a P4P program, had a 2- to 4-percentage point greater improvement than the improvement observed in control hospitals. There is a need for more systematic evaluation of hospital P4P to understand its effect and whether the benefits of investing in P4P outweigh the associated costs.

Lessons From Evaluations of Purchaser Pay-for-Performance Programs

There has been a growing interest in the use of financial incentives to encourage improvements in the quality of health care. Several articles have reviewed past studies of the impact of specific incentive arrangements, but these studies addressed small-scale experiments, making their findings arguably of limited relevance to current improvement efforts. In this article, the authors review evaluations of more recent pay-for-performance initiatives instituted by health plans or by provider organizations in cooperation with health plans. Findings show improvement in selected quality measures in most of these initiatives, but the contribution of financial incentives to that improvement is not clear; the incentives typically were implemented in conjunction with other quality improvement efforts, or there was not a convincing comparison group. However, the literature relating to purchaser pay-for-performance initiatives does underscore several important issues that deserve attention going forward that relate to the design and implementation of pay-for-performance initiatives.

Design of price incentives for adjunct policy goals in formula funding for hospitals and health services

Background

Hospital policy involves multiple objectives: efficiency of service delivery, pursuit of high quality care, promoting access. Funding policy based on hospital casemix has traditionally been considered to be only about promoting efficiency.

Discussion

Formula-based funding policy can be (and has been) used to pursue a range of policy objectives, not only efficiency. These are termed 'adjunct' goals. Strategies to incorporate adjunct goals into funding design must, implicitly or explicitly, address key decision choices outlined in this paper.

Summary

Policy must be clear and explicit about the behaviour to be rewarded; incentives must be designed so that all facilities with an opportunity to improve have an opportunity to benefit; the reward structure is stable and meaningful; and the funder monitors performance and gaming.

Regulation, financial incentives, and the production of quality

An economic model for the production of health care quality is presented, encompassing financial and altruistic returns, penalties and rewards, and transaction costs. After maximizing returns from quality and service volume, the role of regulatory policies and pay-for-performance proposals in producing quality is examined. The tension between the production of quantity and quality is demonstrated. Specifically, the model shows that increasing the costs of a quality improvement program reduces program effectiveness, sanctions for low quality will not improve the performance of high-quality providers, noncompliance with regulation can be a rational decision, and some pay-for-performance programs will not improve quality for low-quality providers. The model suggests incentive structures to improve quality for all providers. This model has application to a variety of social regulatory programs of importance in public health and health care, including health care quality (ie, regulation of nursing homes or medical laboratories) and environmental and food safety regulation.

Pay for performance in health care: strategic issues for Australian experiments

In response to persisting quality problems in clinical practice, policymakers in various countries, including Australia, are experimenting with pay-for-performance (P4P) schemes that tie a portion of provider payments to performance on measures of quality. Rigorous studies of P4P efficacy are relatively few, with many focused on preventive care in ambulatory settings and many suggesting only modest gains in performance. Several key issues need to be considered in determining the optimal design and implementation methods for P4P programs, including: the choice of clinical practice area; the size of financial incentives and who should receive them; the selection of quality measures and performance thresholds that determine incentive eligibility; data collection methods; and the best mix of financial and non-financial incentives. A proposed framework to guide Australian initiatives in P4P emphasises early clinician involvement in development, a phased approach from "pay-for-participation" in performance measurement to P4P within several pilot demonstration programs, and investment in clinical information technology.