As provider pay-for-performance (P4P) programs proliferate across the country, data accumulates that gives critics of pay-for-performance some ammunition to back their concerns. Earlier this year, Modern Healthcare reported on some detrimental findings about pay-for-performance programs on disparities in care and access to care.

Modern Healthcare’s article was titled “An Uneven Paying Field”  and revealed that a number of 2007 and 2008 studies suggest that pay-for-performance programs may actually aggravate disparities in care in regions and communities already identified as having relatively poor healthcare services. These studies offered evidence that P4P programs can cause physicians in those areas to ignore patients who are likely to bring down their quality scores, such as very ill patients and the homeless. One study reported that 82% of general internists surveyed indicated they would avoid high-risk patients if it would affect their pay.

Such reports as “Unequal Treatment: Confronting Racial and Ethnic Disparities in Healthcare” by the Institute of Medicine, have provided evidence that minorities are less likely to receive routine and high-quality health care than whites, regardless of their income or health insurance status. These types of racial and ethnic healthcare disparities, suggested the Modern Healthcare article, can be exacerbated by pay-for-performance programs if rewards inadvertently reduce incomes for providers in low-income minority communities.

A study by Blue Cross Blue Shield of California confirmed that their pay-for-performance program gave far larger bonuses to the wealthy San Francisco Bay area doctors than the poor Inland Empire (East LA) doctors. The difference in patient care was also evident. 26 out of 100 children were given inappropriate antibiotics for upper respiratory infections in the Inland Empire, while only 9 out of 100 were given inappropriate antibiotics in the San Francisco Bay area.

Participating in pay-for-performance programs may require poorer physicians’ offices to pay startup and administrative fees which they can ill afford. The Integrated Healthcare Association (IHA) in Oakland, California, a payer and provider coalition that runs the largest nongovernmental physician incentive program in the U.S., suggests the solution may be to reward not only on performance, but also on improvement. This year, 20% of IHA P4P incentives paid out to physician groups went to practices which improved and met benchmark standards.

For laboratory directors and pathologists, these P4P studies show that paying providers simply on adherence to clinical guidelines or evidence-based medicine guidelines will probably not create the magnitude of change that is required to improve the quality of care reducing the overall cost per healthcare encounter. Rather, pay-for-performance programs will need to recognize and reward those providers who produce a documented improvement in their patient health outcomes from one year to the next. It is that type of progress which will propel the American healthcare system forward on its road to improved patient safety, better health outcomes, and greater patient satisfaction.

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