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Pay-for-performance programs promote quality, truly focused on saving money
Do not expect P4P programs to bring promised quality changes. Added costs will offset gains.
PHOENIX — Do not be fooled by claims that pay-for-performance schemes will improve patient care and reduce medical errors, says an orthopedic surgeon from Scottsdale, Ariz.
“It’s very much about the money — don’t let anyone kid you that it is about quality or outcomes,” John K. Bradway, MD, said. If you want great outcomes, Bradway added, “… Give everyone a private nurse, let everyone choose the best implants, get all the training and everything else. But that is not what they are after and don’t fool yourself for one second.”
Supporters describe pay-for-performance (P4P) as an evidence- or value-based reimbursement system. Its prime purpose: improving patient outcomes through incentive pay to physicians who meet defined best-practices measures. That approach overcomes flaws in the existing system, which pays most physicians and hospitals the same according to volume, thus offering no incentives for superior care, P4P proponents say.
But skeptics such as Bradway say P4P plans will ultimately get manipulated by administrators and used instead to penalize “underperforming” physicians through lower reimbursements rather than rewarding top performers more. Doubters also question whether promised physician bonuses will ever amount to much or even generate enough benefits to offset new technology and monitoring costs to physicians. Still others worry the system could be gamed. See a related story in the print issue on the first-year P4P experience in the United Kingdom.
P4P is “yet another in the long line of ideas and programs to ‘promote’ quality, but which truly seeks to save money,” Bradway said. He made his comments during a presentation at the recent Bones Society Annual Meeting here.
In practice P4P plans vary widely. Some private insurers now operate their own plans and Medicare has introduced small-scale P4P measures — without any bonus payments to physicians, though that may change in 2007. While P4P plans are growing quickly, most remain in the pilot-stage.
Cure for costs
Bradway agrees with P4P advocates that existing U.S. health care system costs are too high and that medical errors are rising.
A HealthGrades analysis of 5,000 hospitals, for example, showed 1.24 million safety incidents among nearly 40 million hospitalizations under Medicare between 2002 and 2004, vs. 1.18 million in the earlier 3-year period. Analysts linked those incidents with $9.3 billion in excess costs in the latest period, Bradway said.
Supporters say P4P could help reverse such results. “So what’s the problem?” Bradway asked. He listed five objections as follows:
- a “huge” lack of consensus on quality indicators among insurers, government and physicians.
- poor and erroneous data collection with little chance of due process — “It’s there on paper but not in reality.”
- time consuming — “You are going to have to do your own stats and mind your ‘Ps and Qs’ if you want to be included.”
- added costs — “Data collection and analysis is not free … and where is that money going to come from? It’s going to cost us a lot more money so it’s not going to be paying physicians for this care, it’s going to be paying others to come in and document that this ‘great’ care is being given.”
- creation of a bean-counting mentality that does not serve patient-centered care — “How do best-practice applications work alongside patient satisfaction measures? The critiques we get on patient satisfaction are, ‘… He spent 5 minutes with me, I did not feel like an individual… .’ ” P4P proponents want surgeons to treat patients “…. like a widget, like a motherboard, like a hard drive. But you as an individual bring a separate set of circumstances to the table and if we want to keep this individualization, I think it is more difficult because they want us to keep check marks on things and not have real discussions with patients about what they need in their life.”
“P4P is here right now,” Bradway said. “It began in April with the Physician Volunteer Reporting Program” from the Centers for Medicare & Medicade Services. Under the program, physicians do “… certain self-reporting over certain quality indicators. You can sign up for this without actually participating and then Medicare sends you ratings and scores from peers.”
This all could mean a “double whammy” for some physicians. First, Medicare reimbursement changes could bring cuts averaging 8% for orthopedic surgeons in 2007, (based on the “flawed” sustainable growth rate (SGR) formula — now under review — and other changes). Second, “value-based” payments to some physicians would “automatically mean further decreases for other physicians,” Bradway said, meaning a zero-sum game once technology costs soak up an extra funds that may — or may not — become available.
He also found many of the CMS early P4P quality measurements ineffective, such as antibiotic prophylaxis for total knee arthroplasty. “In knee and hip replacement this is pretty rudimentary stuff,” Bradway said. “We’ve known about this since the early 1980s; there’s nothing new here. Newer thinking might be looking at putting antibiotic into the cement. The two things are not even on the same plane,” Bradway said. “So they [CMS] are taking something we’ve known for 25 years and saying, ‘oh, that’s a quality indicator’ — well you are well behind if you are just getting to that — and they want to offer payment on that?”
Bradway also pointed out that orthopedic surgeons strive hard to glean best practices from medical meetings, which highlight advances. But new procedures, however good, take time to become best practices and new technologies often cost more. Will surgeons be penalized on quality and efficiency for trying to do “the right thing” and using promising using new methods? Bradway wondered.
Costs matter most
Bradway also commented on one private insurer now implementing a national quality efficiency measurement system for specialists, including orthopedic surgeons. “The quality parameters include a cost analysis – why?” Bradway asked. In the end, under that program, “Where you are on the quality side doesn’t matter. You can be in the top as a quality giver as far as all of the parameters are concerned, but if your [cost] efficiency rating does not put you in the top 1% to 2%, forget it, you are not going to get it [performance pay].
Meantime, some good quality indicators exist but go ignored. “It is well documented in hospitals, for example, that surgeons who do higher volumes of total knee or total hip arthroplasty procedures have better outcomes, few complications and lower mortality rates,” Bradway said. But nobody is using those available quality measures in connection with P4P at present.
That is because, “It is, again, about the dollars,” Bradway said.
For more information:
- Bradway, JK. Pay for performance, an orthopedists view. Presented at the Bone Society 37th Annual Conference. May 21-23, 2006. Phoenix.
- For more information on the Physicians Voluntary Reporting Program (Centers for Medicare and Medicade Services), go to cms.hhs.gov/pvrp