Pay for performance (P4P) comes up over and over again in reimbursement discussions. In the May 2006 edition of Orthopedics Today, there is an in-depth review of what hospitals, surgeons and other stakeholders should know about P4P. As a reminder, P4P is defined as "provider's supplying data on specified quality measures and purchaser' paying for health services differentially based on the outcomes resulting from those preset measures."
As we have commented in the past, it's easy to agree with the general concepts of more pay for higher quality care, especially in an environment where 30-40% of Medicare expenditures are spent on inappropriate or unnecessary care. CMS is leading the way (with congressional support) by developing P4P programs, but the real question how should the industry prepare?
A few suggestions:
Providers
--Put IT systems in place so you can collect the necessary data and report it to payers
--Work with the payers as they design their programs
--Understand how publicly report clinical results may impact your facility and surgeons
Companies
--Do not under-estimate the importance of evidence-based measurement
--Market accordingly
Payers
--Develop a pay for quality strategy
--Understand the IT impact on providers and stay realistic
--Promote transparency
--Recognize that quality measures need to sync with CMS and electronic health records
U.S. reimbursement is slowly but steadily moving away from encounter-based payment incentives to a system in which payments are tied to quality. In other countries this has been able to happen more quickly because there is typically only one significant payer. In the U.S., the level of change required can only be driven by Medicare. The change will require tremendous coordination to define consistent metrics, build infrastructure for measurement and reporting and train staff to change the way they document cases. It will take time, but it's not too soon to begin preparing.
