United States can learn from United Kingdom's first-year experience with P4P

Results reveal an exception reporting issue, ask if incentives were too easy to achieve.

Issue: October 2006

The United Kingdom's first-year pay-for-performance program offers lessons for the Center for Medicare and Medicaid Services and the American Medical Association as they strive to identify evidence-based performance measures that improve health care and reduce costs.

The U.K. results, published in the New England Journal of Medicine, were higher than originally expected, raising questions of whether the pay-for-performance (P4P) incentives were too easy to achieve and whether family practitioners labeled their patients as "exceptions" too often.

The 8,105 family practices in England reported an 83.4% (range, 78.2% to 87%) median achievement from April 2004 to March 2005. The NHS, however, had anticipated that family practitioners would only achieve 75% of the possible points.

The U.K. National Health Service (NHS) awarded $133 for each point earned, essentially awarding practices an average of $133,200 each.

Results surpassed expectations

In light of these results, some experts are questioning whether family practitioners are dealing in exception reporting, also called "cherry picking" or "gaming."

"We've had [problems] with the independent-sector treatment centers, where you can 'cherry-pick' the easy cases, and people with bad health problems, comorbidity, drug abuse ... are left out and not included," said Orthopedics Today Consulting Editor David L. Hamblen, PhD, FRCS, of Glasgow, Scotland.

Arnold M. Epstein, MD, of the Harvard School of Public Health and Harvard Medical School in Boston, wrote in an editorial accompanying the report that "The high level of performance ... suggests that the targets were set too low or that British physicians improved their practices or their documentation of care to meet the new standards or gamed the system by excluding patients whose care did not meet the performance criteria."

The researchers, led by Tim Doran, MPH, of the University of Manchester, found that exception reporting was the strongest predictor of achievement.

Although there was only a 6% incidence of exception reporting, researchers found that a 1% increase in the exception-reporting rate led to a 0.31% increase in reported achievement. One percent of practices had a high exception-reporting rate of 15%.

Example for the United States

Epstein wrote that the United States "would do well to learn from [the U.K.'s] experience."

It is expected that U.S. health care providers will likely face wide-scale public reporting of their performance and less financial incentives than in the United Kingdom, he said.

What's more, U.S. programs will extend to specialty care, unlike the U.K.'s program. Eventually the focus will be on quality, not cost indicators, similar to the United Kingdom.

"One of the challenges for the American Medical Association has been to get input from all the different specialties and to develop specialty-specific measures," Laura L. Tosi, MD, of Washington, D.C., an Orthopedics Today editorial board member, said. "And that's one of the things that's making it more cumbersome and making it take longer."

Another challenge is to pay for meaningful outcomes and demonstrate that they are not just paying for reporting, Tosi said. For example, in the near term, when orthopedic surgeons diagnose patients with fragility fractures, they will "report" whether they notified the patient's primary care physician and suggested the physician perform an osteoporosis evaluation. These measures will only have meaning if the work-up is completed and the patient follows prevention strategies, Tosi said.

But in the United Kingdom the system measured such things as the percentage of hypertension patients whose last blood pressure measurement was 150/90 or less, as shown in the report. "That's real performance ... but documenting outcomes requires much more time, money and improved information technology (IT) systems ... and that's much harder to achieve," Tosi told Orthopedics Today.

"The government has no choice. It has an aging population with very real health care needs and they have to look at utilization that is avoidable and shake it out of the system. The goal is to improve the health of the nation by ensuring that all patients receive evidence-based care."

For more information:
Doran T, Fullwood C, Gravelle H, et al. Pay-for-performance programs in family practices in the United Kingdom. N Engl J Med. 2006;355:375-384.
Epstein AM. Paying for performance in the United States and abroad. N Engl J Med. 2006;355:406-408.