Laboratory News

Proving That Pay for Performance Works Is a Challenge

Even as the number of provider pay-for-performance (P4P) programs grows throughout the United States, critics point out that hard proof of their effectiveness is still tough to find.  Recently, The Leapfrog Group and Med-Vantage  conducted their third annual Provider Pay-for-Performance Incentive Programs survey . The survey indicates that pay-for-performance is being widely adopted among physician groups and hospitals, and that pay-for-performance programs are growing to encompass more physician specialties. 

The survey included 75 purchasers of healthcare services, government agencies, and health plans.  In a press release for the survey, Leapfrog Group identified several important findings:

1.      Since 2004, the top reason for implementing P4P remains to improve clinical outcomes.

2.      More than 60% of P4P survey respondents have now evaluated their programs and at least half of evaluated programs find that clinical performance improved significantly.

3.      About one third of all P4P survey respondents are able to demonstrate cost savings.

4.      Over 70% of all P4P programs are working to expand the scope or number of performance measures they use. P4P programs now rely largely on well-established or co-authored measures. These measures were developed by such national standard setting organizations as AQA, NCQA, NQF, the Joint Commission, The Leapfrog Group and others.

5.      Over 30% of P4P survey respondents posted information publicly on provider performance in their provider directories.

6.      Advanced P4P programs are now developing tools to measure improvements in outcomes and eligibility for rewards that will be be extracted directly from medical charts.

Despite these favorable findings by the Leapfrog Group's P4P survey, there are critics of this concept. Modern Healthcare  reports that many physicians remain apprehensive about pay-for-performance programs.  A report by the Robert Wood Johnson Foundation  released December 19^th, 2007 stated that "it is difficult to disentangle the contribution of P4P from other quality improvement efforts."  In order for P4P programs to work, Modern Healthcare argues that there needs to be support for collaborative efforts between stakeholders to test how the programs work, then come up with measures that could be put into practice. 

In the next three years, more medical specialties will be added to pay-for-performance programs, with a push towards standardization.  This is largely because CMS projects to spend $1.3 billion on performance programs, according to Med-Vantage and The Leapfrog Group.  In pathology, the opening steps can be seen in this year's Medicare PQRI (physician quality reporting initiative (see What Every Pathologist Needs to Know about Medicare's PQRI for 2008). Medicare will pay an additional reimbursement to pathology groups which include added information on claims submitted for breast cancer and colon cancer. 

In coming years, clinical laboratories are likely to see similar reimbursement incentives for reporting selected data measures to Medicare and private payers.  These are all the precursor steps required before anatomic pathologists and clinical laboratories get their own pay-for-performance incentive programs.

Related Items:

• Provider Pay-for-Performance Incentive Programs: 2006-2007 National Study Results
•     Executive Report - 
•     Summary Results - 
• PAY FOR PERFORMANCE PROGRAMS FOR PROVIDERS NOW TOTAL 150  (Press release)
• It's everywhere:  But measuring effectiveness of P4P is challenging (Modern Healthcare article)
• Paying for Quality: Understanding and Assessing Physician Pay-for-Performance Initiatives