This article is more than 5 years old. Information may no longer be current.
Expert identifies flaws in current pay for performance framework
Click Here to Manage Email Alerts
Pay for performance, or the idea that the groundwork for improved health care should result in more incentives, has been absorbed by clinicians and researchers in various degrees. According to one physician and public health expert, a decade’s worth of experimentation has led to somewhat disappointing results. On the topic of his viewpoint recently published in JAMA, Ashish K. Jha, MD, MPH, told Endocrine Today his proposal for improving pay for performance.
“The reason I wrote my viewpoint is that I believed it’s worth taking a step back and asking, ‘why not?’ It ought to work. If you give people money to do something, they should do more of it. And yet, it doesn’t seem to be having a big effect,” said Jha, the C. Boyden Gray associate professor of health policy and management at the Harvard School of Public Health and staff physician at Boston Veterans Affairs Healthcare System and Brigham and Women’s Hospital. “And when I looked at all of the data and thought about it — I talked it over with others who have expertise in this — it struck me. There were three sets of problems with most of the pay-for-performance programs.”
First, Jha said incentives are too small. The Premier Hospital Quality Incentive Demonstration (HQID), the largest hospital-based pay-for-performance program to date, provided bonuses of 1% to 2% of Medicare payments to hospitals, with no long-term effects. In his viewpoint, he said CMS stopped making extra payments in 2008 to hospitals for hospitalizations, resulting in preventable complications.
“Most of the time, incentives are roughly half of 1%. It’s like taking somebody who makes $50,000 per year and telling them if they change the way they do their job, they will receive an extra $200 per year. But the truth is, it’s not enough money to totally change behavior,” Jha told Endocrine Today.
Motivation for change
Ultimately, small incentives fail to motivate organizations to invest in care redesign and quality improvement, Jha wrote. Although important, increased incentives are just one suggestion. Jha said the second part of this equation is that incentives must be structured in a way that makes sense.
“I feel strongly that if you want people to focus, you’ve got to give them not just enough incentives, but the measures have to be structured in the correct way. They have to be plain and obvious, and you can know if you’re doing well or not,” he said.
According to Jha, complex formulas that are not easy to understand or implement are unlikely to engage clinicians in such a way that promotes quality improvement or reduce transparencies of the payment system. However, the third and most important piece to this puzzle is correct measures, or metrics.
“So far, most of the pay-for-performance programs have not focused on patient outcomes. If you just ask people to conduct better documentation in the chart and be sure to give certain medication, that’s fine. Ultimately, the goal of all of this is improving patient outcomes. If that really is the goal, it should be the target for the incentives,” he said.
Health care reform and the future
Jha told Endocrine Today that with the Affordable Care Act (ACA) moving forward, he is concerned about these three goals.
“Unfortunately, the pay-for-performance areas within the ACA sort of fail on all three goals. I think there are a lot of opportunities, but I think the heart is in the right place. People are trying to do [pay for performance] within the ACA and are trying to do it right. It’s just the bill that doesn’t give them the proper tools,” he said.
Ahead of the ACA, in 2005, the AMA released five principles for pay-for-performance programs. They include ensuring quality of care; fostering the patient/physician relationship; offering voluntary physician participation; using accurate data and fair reporting; and providing fair and equitable program incentives.
“I’m actually very optimistic,” Jha said. “I think pay for performance is an important tool for improving care, so I’m not negative about all of it. I just think we have to do it right.”
Although this remains an attractive notion, Jha said pay for performance will only survive with bold decisions, monitoring effects closely and experimenting with approaches to improve options. – by Samantha Costa
References:
- AMA. Principles for pay-for-performance programs. June 21, 2005. Available at: www.ama-assn.org/resources/doc/psa/principles4pay62705.pdf. Accessed Jan. 29, 2013.
- Jha AK. JAMA. 2013;309:347-348.
- Ashish K. Jha, MD, MPH, can be reached at Harvard School of Public Health, Department of Health Policy and Management, Kresge 408, 677 Huntington Ave., Boston, MA 02115; email: ajha@hsph.harvard.edu.