JUNE 14, 2012

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

EHRs Aren't Ready for Pay for Performance
The multitude of metrics established by CMS and many private insurers are not always easily supported by existing IT tools, and physicians' use of the data does not always produce the desired improvements. Not only are systems often not up to the task, but such systems are not widely available. While an estimated 69% of physician offices employ some form of EHR, less than 25% of ambulatory care is documented electronically. Further, physicians who bring a paper record mentality to the electronic environment minimize the EHR's effectiveness. (InformationWeek, June 6, 2012)

Fixing the "Doc Fix" - How to Turn a Big Problem into a Big Opportunity
The editorial team of Healthcare Frontiers, a publication from ZS Associates, offers an intriguing application of pay-for-performance: use the concepts to build an incentive pool that replaces the annual "doc-fix" (the SGR adjustment). The "fix money" is tied to performance rather than applied across the board. (Healthcare Frontiers, May 21, 2012)

Medicare Advantage Reform: Detaching Pay from Performance
In this article the author suggests that Medicare Advantage plans under the Affordable Care Act will not be incentivized to improve quality in ways that benefit patients. Criteria for incentives are announced and applied after the performance period. Also, payments are made so late after the performance period that they cannot reward behavior. Finally, the criteria are set after the data has been collected, creating an opportunity for CMS to select criteria in a perverse fashion destroying the systems credibility. (Forbes, May 17, 2012)

Pay-for-Performance in Healthcare: Purpose, Politics and Pitfalls
This article from Physician News Digest is written by an attorney offering advice to physicians. It includes a good primer on pay-for-performance, critiques existing methodologies, outlines the CMS Hospital Value-Based Purchasing program, and suggests "viable alternatives to P4P." (Physician News Digest, May 2, 2012)

Practices in Low-income Areas Score Lower on Pay-for-Performance Measures
The Journal of General Internal Medicine presented a study of 160 organizations with 11,718 practice sites in its May issue which confirms that medical practices do better in higher socioeconomic areas than those in lower ones. An explanation offered by researchers suggests that patients with less education have a more difficult time following physicians' recommendations. Taking socioeconomic status into account may reduce the gap between practices in rich and poor areas, the authors said. Further study on the implications of practice location on P4P programs is necessary to make appropriate adjustments. (Amednews.com, May 24, 2012)

Culture Shift a Key Part of Aligning Incentives for States, Providers -- But Takes Time
Three leaders involved in changing healthcare incentives are interviewed for this article. The common theme is that as incentives change, the culture will change to support not volume performance but value performance. (Inside Health Policy, June 7, 2102)

Health IT Investments Focus on Data, Value
Value-based purchasing and pay-for-performance programs are changing IT purchasing for provider organizations. A Forbes Insight Report entitled, "Getting from Volume to Value in Health Care: Balancing Challenges & Opportunities" and based upon a survey of 204 C-suite executives and intensive interviews with eight of them, found spending priorities shifting to support the data-driven environment that provides the necessary information to monitor and manage quality and respond to performance incentives. (InformationWeek, June 12, 2012)

Lots of 'C's as Hospitals Get Graded for Patient Safety
Leapfrog has given a single letter grade to 2,651 hospitals based on 26 different measures they or Medicare officials have collected. These measures included such things as the timely removal of catheters, bed sores, infections, etc. Nearly half of the hospitals received a grade C or lower. (Kaiser Health News, June 6, 2012)

Health Care Leaders: Pay-for-Performance Most Effective Way to Reduce Health Care Costs

A survey of widely recognized U.S. health experts by the Commonwealth Fund found that a majority (57%) rated pay-for-performance as an extremely or very effective way to reduce health care costs.

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Applying Performance Measures to Improve Quality and Demonstrate Value

Tom Valuck, MD, JD
Senior Vic e President, strategic Partnerships, National Quality Forum

Helen Burstin, MD, MPH
Senior Vice President, Performance Measure, National Quality Forum