MARCH 8, 2012

Welcome to the Pay for Performance Update eNewsletter
This issue sponsored by the Pay for Performance Summit

Pay-For-Performance Programs to Reduce Racial/Ethnic Disparities: What Might Different Designs Achieve?
Researchers wondered if pay-for-performance programs, which reward hospitals for meeting quality targets, have unintentional effects on racial and/or ethnic disparities. Using federal patient-level quality data, researchers found that many hospitals treat Whites and minorities equitably but they noted that since many minorities tend to seek care at hospitals that perform poorly on common quality score composites, the pay for performance efforts could unintentionally penalize hospitals serving high numbers of minorities. P4P programs should consider an approach that considers both overall quality and reductions in disparities when setting incentives. (Journal of Healthcare for the Poor and Underserved - February 2012)

GPOs Evolving in a Complex Landscape
Healthcare provider systems are enduring more financial challenges than ever with lower Medicare reimbursement on the horizon, accountable care organization and pay-for-performance initiatives. In essence, provider revenues are shrinking while costs are growing and as a result they are relying on group purchasing organizations more than ever. (Healthcare Finance News - March 5, 2012)

Massachusetts Healthcare Law Highlights Implications for National Healthcare Reform
In response to a mandate to investigate reforming and restructuring the payment system as the next step in statewide healthcare reform, a Special Commission on the Health Care Payment System released recommendations in July 2009 (www.mass.gov/eohhs/docs/dhcfp/pc/final-report/final-report.pdf) that proposed that Massachusetts phase out fee-for-service reimbursement and replace it with an accountable-care approach that incorporated a global payment model combining elements of risk-adjusted capitation, pay-for-performance, evidence-based guidelines, and medical-home-style care coordination. Although a bill to accelerate statewide implementation of the model awaits a vote in the state legislature, the private health insurance market is well into the game. (The Hospitalist) - March 2012

Private Insurers Pushing Accountable Care, Other Reforms
The health care insurance industry, whose policy making council is meeting in Washington this week, is beginning to roll out private plans for the working-age population that incorporate most of the changes foreseen for Medicare in the Affordable Care Act. They include creation of accountable care organizations, coordinated care and medical homes on the delivery side and bundled payments, pay-for-performance and shared savings with providers on the payment side. (GoozNews - March 6, 2012)

Sky Lakes Medical Center Selects CRG emPerform to help Recognize and Reward Employee Performance
Sky Lakes Medical Center has selected CRG emPerform to simplify employee appraisals and automate their pay-for-performance processes. Sky Lakes Medical Center is a community-owned internationally accredited healthcare organization based in Klamath Falls, Oregon, and is well known for its patient-centric culture. Using emPerform, Sky Lakes plans to properly identify and reward employee performance to reinforce this commitment to patient care. (Top Wire News - February 16, 2012)

Cincinnati Children's Hospital Enters Big Data Market with New Startup
Much of the need for hospitals to better understand and analyze their data stems from a movement toward a pay-for-performance model in healthcare, such as the model that's associated with accountable care organizations. Now, Cincinnati Children's Hospital Medical Center is jumping into the big data game with the formation of a new startup, called QI Healthcare, which has been founded to commercialize technology developed at the renowned children's hospital. (MedCityNews - March 2, 2012)

Independence Blue Cross and Aria Health Announce New Agreements to Continue to Serve Patients in Philadelphia, Bucks, and Montgomery Counties
Independence Blue Cross (IBC) and Aria Health have signed new multi-year contracts that include IBC's innovative pay-for-performance program for hospitals, to improve health outcomes and lower costs. Aria Health is the sixth hospital system to commit to this program. The agreements with Aria Health provide IBC members continued access to Aria's Frankford, Torresdale, and Bucks County hospital campuses; outpatient sites; the health system's more than 900 physicians; and its home health services division. The contracts went into effect December 1, 2011. (MarketWatch - February 28, 2012)

Survey: Health Info Specialists to see Dramatic Hiring Increase
Health informatics is an emerging, fast-growing professional field that is expected to become even more important as health outcomes, or pay for performance, become the basis of reimbursement to doctors, hospitals, drug companies, medical devices companies and other healthcare services. Health organizations see the analysis and use of health information as the key to improving patient outcomes, proactively identifying chronic and high-risk patients, managing patient population health and effectively managing their financial performance. (Chiroeco.com - February 28, 2012)

RTI Publication - Pay for Performance in Health Care: Methods and Approaches

This book provides a balanced assessment of pay for performance (P4P), addressing both its promise and its shortcomings. P4P programs have become widespread in health care in just the past decade and have generated a great deal of enthusiasm in health policy circles and among legislators, despite limited evidence of their effectiveness. On a positive note, this movement has developed and tested many new types of health care payment systems and has stimulated much new thinking about how to improve quality of care and reduce the costs of health care. The current interest in P4P echoes earlier enthusiasms in health policy-such as those for capitation and managed care in the 1990s-that failed to live up to their early promise. The fate of P4P is not yet certain, but we can learn a number of lessons from experiences with P4P to date, and ways to improve the designs of P4P programs are becoming apparent. We anticipate that a "second generation" of P4P programs can now be developed that can have greater impact and be better integrated with other interventions to improve the quality of care and reduce costs.

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Keynote Address: A Framework for Payment Reform

James C. Robinson, PhD
Kaiser Permanente Professor or Health Economics, School of Public Health, University of California at Berkeley, Berkeley, CA