Pay for Performance at a "Tipping Point;" CMS to Develop P4P Initiative
BY LAUREN UZDIENSKI, FEBRUARY 7, 2007
This week's New England Journal of Medicine features an editorial on pay per performance, wherein Arnold M. Epstein argues that P4P has reached a tipping point. Epstein describes the progressive changes as various organizations move toward P4P, at the same time warning that P4P programs lack data confirming their efficacy.
One study, reported in the same issue of the Journal, showed P4P programs combined with a public reporting initiative achieved "modestly greater" improvements in quality when compared with hospitals who participated only in public reporting (public reporting is defined as voluntarily reporting information about the quality of care.) The P4P program offered a 1-2% bonus for achieving high levels of quality over a two-year period. First author on the study Peter Lindenhauer identifies some of the points of concern for implementing a P4P program, notably where those bonuses will come from - likely answer are cutting funding to underperforming hospitals or a large-scale reduction in reimbursement. Additional financial questions surround developing a system for who receives the bonuses and for what levels of achievement, as well as the costs of P4P systems (which are likely to be higher than public reporting system costs alone.)
In his editorial, Epstein points out that at the time of printing, only one study had been conducted to evaluate P4P's cost-effectiveness. He adds data showing efficacy are "inconsistent," and other studies have shown P4P improving documentation without making strides in overall quality of care.
Despite these holes in the data, more than half of the HMOs in the private sector have initiated P4P programs, and CMS has been ordered by Congress to develop a program for Medicare. Epstein recommends that the agency develop regional models to evaluate the system before broadly implementing it. In the U.K., there is a more dramatic program in place: 25-30% of a physician's income rests on a form of P4P.
Financial incentives are obvious way to, as Lindenauer phrases it, "[close] gaps in the quality and safety of healthcare." However, in the absence of demonstrated efficacy and a clear sense of the financial big picture, P4P programs are premature. Epstein advises that we proceed with caution until more of the impact can be assessed, but adds, grimly, that new data is unlikely to be released "before political pressure forces policymakers to act."
