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Pay for Performance: The New Paradigm

Welch, Shari J. MD

Quality Matters

Dr. Welch is the quality improvement director in the emergency department at LDS Hospital in Salt Lake City, a clinical faculty member at the University of Utah School of Medicine, a quality improvement consultant to Utah Emergency Physicians, and a member of the Emergency Department Benchmarking Alliance.



Paying physicians for performance is one of managed care's hottest trends, and now the Joint Commission on Accreditation of Healthcare Organizations and the Centers for Medicare and Medicaid Services are jumping into the fray. The Joint Commission is linking hospital accreditation to performance via core measures (three of which directly pertain to ED performance [EMN 2005;27[8]:9]), and CMS is rolling out its pay-for-performance initiatives. (Joint Commission web site:; Amer Med News 2005;48[33]:1.)

According to the JCAHO, there are approximately 100 pay-for-performance programs (dubbed P4P) operating across the country. Because most of these programs are in the early stages of development, the best approaches are far from clear.

Brent James, MD, of the Intermountain Healthcare Institute for Health Care Delivery Research in Salt Lake City, prefers systems that tie compensation to outcomes, all the while feeding doctors data they can use to improve performance. (Manag Care 2004;13[12]:14.) In the past, P4P models rewarded physicians for compliance with whatever the payer thought was important. Often this translated into less care, not necessarily an improvement in care. Dr. James said he would change that model from a compliance model to a process model.

Dr. James and Intermountain Healthcoare have been able to show that quality care may mean more health care in the short term, which in turn saves money later through better outcomes. For instance, IHC developed a care process model for pneumonia. It assisted clinicians in determining who should be admitted with pneumonia and whether an ICU bed was indicated, and it facilitated decisions about antibiotics. When utilized, antibiotics were started more quickly and hospital length of stay was shortened. At IHC, just a few dozen quality improvements have saved millions of dollars and resulted in better care and better outcomes. And some of those savings should be diverted back to the physicians, he said.

There are two high profile national demonstration projects in the early stages of testing whether P4P programs significantly contribute to improved health care outcomes. (Fam Pract Manag 2004;11[3]:45.) Rewarding Results is an $8.8 million initiative of the Robert Wood Johnson Foundation and the California Health Care Foundation, and grantees include Blue Cross Blue Shield of Michigan and California, Excelsius Health Plan, Integrated Healthcare Association, and Massachusettes Health Quality Partners. In 2005 participating physicians submitted data on patient satisfaction, investment in IT, and clinical indicators (childhood immunization, cervical cancer screening, appropriate asthma medications, screening after a cerebrovascular event, and diabetes testing). The first bonuses have been paid based on performance in these areas.

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EM Leads the Way

The second high profile program is called Bridges to Excellence, also funded by the Robert Wood Johnson Foundation and supported by CMS. This initiative of large employers like GE, Procter & Gamble, UPS, Humana, and others in the large urban areas of Louisville, Cincinnati, and Boston has set targets in three areas: diabetes care, cerebrovascular care, and patient care management systems. The incentives of up to 10 percent of annual income are paid to physicians who achieve specified targets in those areas.

The important point is that pay-for-performance programs are being initiated all over the country, and this should not be news for emergency physicians. Though the CMS measures may affect emergency physicians first, other payers and employers are likely to follow suit. Emergency physicians need to become familiar with the concepts and participate in the details of their implementation. Emad Rizk, MD, of McKesson Health Solutions, noted, “If physicians are not on board, you don't have a program.” He recommended five solutions for health systems jumping into the quality improvement fray in anticipation of the new pay-for-performance paradigm. (Manag Healthcare Exec 2005;2:45.)

  • ▪ Build the program on performance data with which providers are intimately familiar.
  • ▪ Solicit physician input.
  • ▪ Make sure your metrics are credible.
  • ▪ Apply clinical and regional context to your data.
  • ▪ Seek out alliances with other organizations to create common performance metrics.

Susan Nedza, MD, the chief medical officer of Region V for the Centers for Medicare and Medicaid Services and an associate professor of emergency medicine at the Feinberg School of Medicine at Northwestern University in Chicago, noted that the CMS vision for quality is, “The right care for every person every time.”

According to Dr. Nedza, the aims are those laid out in the 2001 Institute of Medicine report, “Crossing the Quality Chasm: A New Health System for the 21st Century. “We want to make care safe, effective, efficient, patient-centered, timely, and equitable,” Dr. Nedza said, adding that EDs should prepare for the P4P program by first being aware of the movement to value-based reimbursement. The ED group should be educated, and its leadership should actively engage with hospital leadership to improve quality within the Hospital Compare effort, she said. Forward-thinking groups also should reach out to their primary care associates and to long-term care facilities to develop local models for improving care at hand-offs, she said.

The patient safety literature notes that hand-offs put patients at risk, and the ED is in the business of handing off patients. One question they might ask is how to gain effective access to outpatient records and medication lists. In the long-term care setting, it might be, “How do we effectively deal with end-of-life issues and advanced directives?” Dr. Nedza said an ED group might want to study how many patients actually can access appointments in their community for follow-up care after discharge.

She said emergency departments still discharge more patients than they admit, and they have a great opportunity to begin to explore this quality gap. Emergency medicine groups need to work as a team with nurses, pharmacists, and others to improve ED care. It can't just be about physician performance, she said. Emergency physicians should look at how they can use guidelines and clinical policies, clinical decision support tools, and risk stratification to utilize technology and diagnostic services appropriately, Dr. Nedza said. The increase in availability of technology such as spiral CT, 64-slice CT scans, and other advances is a challenge. Each group needs a method for working with cardiology and radiology to define appropriate utilization. This is imperative in residency training programs. All health care is local, and each group should look at setting goals in the six areas delineated by the IOM.

Pay-for-performance programs are being initiated all over the country, and CMS measures may affect EPs first

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Information Technology

Dr. Nedza said Secretary of Health and Human Services Michael Leavitt is personally leading efforts to improve the infrastructure of health care information technology, and CMS is committed to implementing an agency-wide health information strategy. Clearly, IT will facilitate efforts for quality improvement, reporting, and acting on information. Any data collected should be available to physicians to improve their performance and the performance of the system in which they practice.

The electronic health record will play a key role in facilitating the ease of data collection, and providing access to clinical decision-making tools. It also means that emergency physicians will no longer have to function in a world devoid of accurate information, deal with a chart that is three months old, or wonder if an advanced directive is accurate, Dr. Nedza said.

CMS is aware of the burden to report data to multiple payers and entities that often do not have similar requirements, she added, and is working toward convergence and agreement on one set of measures that can be utilized by a variety of different groups. CMS does not design measures, Dr. Nedza said, but works with stakeholders such as the Physician Consortium on Performance Improvement, specialty societies, AHA, and health plans that submit measures through the National Quality Forum process. It is important to remember that measures are not the goal, improvement is, she said. “We are looking at driving innovation in quality across the health care system through our leverage as a regulator, payor, and convener,” she said.

Dr. Nedza said this is a wonderful opportunity to improve the care that is provided in emergency medicine. “No one has a better understanding of issues linked to quality care at the local level.” If this effort is to succeed, it will need physicians to step into leadership roles at all levels. The physician-patient interaction is at the heart of the system, and ensuring that patients' needs are met, that physicians have the information, training, and resources that they need to make good decisions to provide quality care is critical.

“Emergency physicians need to understand and define what their role is in the health care continuum. They need to define what quality of care is in their emergency departments based upon the needs of the community and the patients that they treat,” she said. “Finally, emergency physicians need to guarantee access to emergency care that provides the right care to every patient every time.”

© 2006 Lippincott Williams & Wilkins, Inc.