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P4P Programs May Produce Minimal Quality Gains

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Pay-for-performance programs may lead to only small changes in quality, with providers who met performance standards at baseline unevenly reaping the benefits of cash bonuses, according to an article in the Oct. 12 issue of the Journal of the American Medical Association.

The eagerness on the parts of policymakers and payers to implement pay-for-performance programs is not fully supported by research because data on pay-for-performance is limited to only a few studies, wrote the authors, led by Meredith B. Rosenthal, PhD, of the department of health policy and management at the Harvard School of Public Health.

In a step toward correcting this disparity, Dr. Rosenthal and colleagues evaluated a natural experiment conducted within PacifiCare Health Systems, one of the nation's largest health plans. They compared physician group performance in California, where groups began receiving bonuses from PacifiCare based on meeting or exceeding 10 clinical and service quality targets in 2003, with a contemporaneous comparison group in Oregon and Washington, where groups were not eligible for bonuses. The researchers used performance reports issued between October 2001 and April 2004 for about 300 large physician organizations to compare performance on three measures of clinical quality: cervical cancer screening, mammography, and hemoglobin A1c testing.

Physician groups in both regions showed improvement in all three measures after the quality incentive program was implemented. For cervical cancer, California groups showed a 5.3 percent improvement, while Pacific Northwest groups had a 1.7 percent improvement, a 3.6 percent difference and the only significant difference among the measures. For mammography, the improvement was 1.9 percent for California versus 0.2 percent for the Pacific Northwest, and for hemoglobin A1c testing, both regions showed a 2.1 percent improvement.

The plan awarded a total of $3.4 million in bonus payments, 27 percent of the amount set aside for such payments, during the first year of the program. For all measures, physician groups with baseline performance at or above the performance threshold for receipt of a bonus improved the least but garnered the largest share of bonus payments: 75 percent on average across the three measures.

In an accompanying editorial, R. Adams Dudley, MD, MBA, of the Institute for Health Policy Studies and the department of medicine at the University of California, San Francisco, wrote, “While the study by Rosenthal et al is well designed, much more is needed. Pay-for-performance involves a common problem in health services research: Despite little evidence, clinicians and policymakers are responding to a major policy trend, while researchers determine how to inform those decision makers.”

© 2006 Lippincott Williams & Wilkins, Inc.

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