Whether it’s driven by private insurers or the federal government, pay-for-performance (P4P), a concept that offers health care providers payment for meeting certain performance measures, is here to stay. Recognizing the potential impact P4P will have on family physicians, the American Academy of Family Physicians is working to ensure that family physicians are involved in shaping the future of P4P.
“Pay-for-performance is an incentive to prove the quality of care we already provide and to improve our care,” says AAFP Board Chair Mary Frank, MD, of Mill Valley, Calif. “Think of it first as quality improvement and then as positive financial recognition.”
“It’s here, it’s going to stay, and it’s going to change the way we practice,” Ron Bangasser, MD, says of P4P. A family physician in Redlands, Calif, Bangasser is a member of the National Committee for Quality Assurance’s Committee on Performance Measurement. He’s also past president of the California Medical Association.
Bangasser speaks to groups all over the country about pay-for-performance. He estimates that between 100 and 120 P4P programs — overseen by the federal government or private insurers — currently operate across the country. “There are tens of millions of patients covered under these programs now, and soon there are going to be hundreds of millions,” says Bangasser.
An example of these programs is Integrated Health-care Association, a nonprofit, California-based entity, which has a P4P program that will pay out a total of $88 million to 235 California medical groups, including Bangasser’s, in 2005. These types of programs appear to have boosted the quality of care in the California market. According to Bangasser, a comparison of health care data between 2002 and 2003 reveals that:
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Nearly 150,000 more women received cervical cancer screening
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35,000 more women received breast cancer screening
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An additional 10,000 children got 2 needed immunizations and
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18,000 more people received a diabetes test.
P4P OPPORTUNITIES
“I’m constantly fishing for P4P programs of various kinds,” says Robert Fortini, clinical operations manager at Community Care Physicians in Albany, NY. Fortini and the physicians at the multispecialty group practice he oversees embrace P4P programs because they translate into better patient care. “It’s been pretty well demonstrated over the last 10 years that quality and improvement strategies result in decreased cost and improved patient outcomes,” says Fortini. “The bottom line is that reducing the risk of medical errors — and these are just strategies to do that — is the right thing to do.”
Fortini’s group, Community Care, has 35 individual practices and 191 clinicians — many of them FPs — practicing in the Capital District of upstate New York. The group participates in the P4P program of the Bridges to Excellence coalition, a not-for-profit group established by employers, providers and health care plans. Bridges to Excellence works to improve health care quality through rewards and incentives that encourage providers to deliver optimal care and patients to seek evidence-based care and self-manage their conditions.
“Right now I have 8 practices — 43 physicians — that have realized the maximum reward potential for the first year,” says Fortini, adding that everyone agreed to put the money against the bottom line to offset the cost of either implementing or maintaining electronic health record systems in their practices.
The time and effort expended at the front end (setting up registries, collecting data and reporting data) is balanced by the fact that in the end, participating clinicians not only realize monetary payoffs but also quality improvement in their practices, says Fortini. “That money can be used to support electronic systems that further facilitate quality care and efficient practice.”
In January, CMS jumped on the P4P bandwagon when it announced a 3-year Physician Group Practice initiative that is intended to demonstrate the viability of P4P in 10 large, multispecialty physician practices.
Another pilot program, the Medicare Chronic Care Improvement Program, includes the 3-year Mississippi Chronic Care Collaborative, which will test the value of chronic care management for 20,000 Medicare patients in the state. Among its goals is to implement a P4P system using recommendations from a physician incentives workgroup on performance measures and methodology, target values, and eligibility for participation.
PAYING FOR P4P PROGRAMS
“It’s not the amount of money so much as good measures and a little bit of money,” says Bangasser. “If I don’t believe the measures are worth it, I ain’t gonna play. And the payouts have to be from new money. It can’t be money taken away from all of us or some of us as a stick; it has to be all carrot.”
AAFP’s policy on P4P also insists on new money: “P4P incentive programs should utilize new money funded by using a portion of the projected health plan savings. There should be no reduction in existing fees paid to physicians as a result of implementing a P4P program.”
Funding for P4P programs is key to their success. Many family physicians fear that incentive payments for some mean that others will have their payments cut. Even policymakers are beginning to recognize that how these programs are funded is critical. Samuel Nussbaum, MD, chief medical officer for WellPoint, a national medical health plan company, and Jack Ebeler, chief executive officer of the Alliance of Community Health Plans, recently joined together to recommend an infusion of new money into any pay-for-performance system. On September 8, the 2 testified before the Medicare Payment Advisory Commission that family physicians and their primary care colleagues should receive a 5% to 10% incentive payment for meeting quality standards under any Medicare pay-for-performance program approved by Congress.
The section on physician services in MedPAC’s March 2005 report to Congress recommended a 2.7% increase in physician payment for 2006. A section of the report on strategies to improve care also called for establishing a pay-for-performance system that would be budget-neutral. Such an approach would effectively reduce all physicians’ payments by a certain percentage and then would create a fund from which incentives would be distributed to those who met quality standards.
MedPAC’s recommendations, if implemented, would hamper a successful outcome, Nussbaum told MedPAC. Payment reductions to establish an incentive fund would discourage physicians from investing in health information technology, he said. And incentives of only 1% to 2% would not be enough to encourage physicians to improve care.
FAMILY PHYSICIAN INVOLVEMENT
It’s critical to have family physicians involved in the planning when incentives for a P4P program are developed. Part of why California’s Integrated Healthcare Association program works for family physicians is that FPs helped put the program together, says Frank. “We need to be involved in discussions with employers or regional insurers about P4P. Lots of times, the family doctor is the reality test.”
Frank encourages family physicians to be aware that P4P will affect their future. “Some of our members aren’t clued in that it’s coming, even though it’s already here,” says Frank. “CMS demo projects are already under way. And P4P is a major direction employers and insurers are considering.”
At press time, Congress was grappling with budget problems arising out of Hurricane Katrina and appeared likely not to take up legislation including P4P this year. However, bills containing pay-for-performance and health information technology provisions, including the Medicare Value-Based Purchasing for Physicians’ Services Act, HR 3617, and the Wired for Health Care Quality Act, S 1418, still are likely to come up next year if they are not tackled this year.
- © 2005 Annals of Family Medicine, Inc.
