Study Finds Over Half of HMOs Offer Pay-for-Performance for Doctors, Hospitals
More than half of health maintenance organizations used pay-for-performance (P4P) programs in 2005 to reward physicians and hospitals for improving the quality of care they offer, according to a federally funded study released Nov. 2.
The study in the Nov. 2 issue of The New England Journal of Medicine found that 52 percent of 252 HMOs in geographic regions with at least 100,000 people enrolled in this type of health plan had P4P programs. The study, "Pay for Performance in Commercial HMOs," was supported by funding from the Agency for Healthcare Research and Quality, part of the Department of Health and Human Services.
Of the health plans with P4P programs, 90 percent operated them for physicians and 38 percent for hospitals.
The sample covered 91 percent of U.S. HMO enrollees and 78 percent of the U.S. metropolitan population, said the survey, conducted by researchers from the Harvard University School of Public Health and Harvard Medical School.
The study found that P4P programs are more often associated with HMOs that use primary care physicians as gatekeepers to specialty care or use capitation payments that give doctors set payments each month.
Clinical Care Measures
Of the 113 HMOs with P4P programs for physicians, just 13 percent focused on individual doctors rather than a medical group for the unit of payment, the study said. Nearly all the P4P programs used clinical care measures to determine P4P payment, including such yardsticks as patient use of diabetes care, mammography, and asthma medication.
About a third of the physician P4P programs were designed only to reward top-rated physicians or groups, the study said. Sixty-two percent offered financial rewards for meeting a predetermined quality threshold, while about 20 percent rewarded improvement toward a goal, it added.
The bonus given to physicians was generally equivalent to 5 percent or more of payments from the HMO, according to the study.
Health plans in the South were less likely to have P4P programs, the study found. The study also said certain characteristics--such as a requirement to designate a primary care provider with or without a gatekeeping role, nonprofit ownership, and capitation payment--were associated with greater use of P4P.
Medicare Advice
The researchers said their findings have relevance for Medicare as it attempts to incorporate P4P programs into its payment systems. HMOs with a large number of enrollees who are not required to select a primary care provider as a gatekeeper--a feature shared by Medicare--were less likely to have P4P programs, the study said.
"This finding may well reflect the challenges of attributing performance to a single doctor or group when many doctors or groups are responsible for a patient's care," the study said. "The development of appropriate strategies to overcome the current lack of a designated [primary care provider] in the Medicare system will be critical to the implementation of a pay-for-performance program."
Private-sector P4P programs also tend to be heavily concentrated in medical groups rather than individual doctors, the study said. Medicare may need to recognize groups as contracting entities to make P4P work, it added.
Health plans apparently have determined that a 5 percent bonus payment for P4P participation "is needed to achieve improvement," the study said. "Given its financial constraints, [Medicare] may not be able to meet this benchmark without reducing base payments to some physicians," it added.
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