• If not pay for performance, then what?

    Austin emails me:

    If physicians don’t respond to financial incentives but finances (costs) are THE problem (one can argue, but many people think that way), what is one to do?

    If one punts on cost and just wants to focus on quality then what’s to be done? It’s not P4P, so what? PCMHs? Greater clinical integration? Lifestyle factors? Or do we give up on that too?

    That’s a fantastic question, and I’m sure there are many answers.  But here’s mine:

    I actually think we need to use sticks as well as carrots.  We should stop reimbursing so much for stuff we’d like to discourage.

    To put it another way, I think if we stopped paying so much for procedures, we would do less procedures.  But it you can make a lot ordering labs or make a lot not ordering labs, then why change behavior?

    Here’s another way of looking at it.  If I can see 20 patients a day, and you offer to increase my pay 5% if I do an awesome job, I could work harder, hire people, and do QI to try and make 5% more.  Or, I could just see 21 patients a day.  Guess which I’ll do.  And the latter will INCREASE costs.

    It can’t be all carrots.  Sticks may not be popular, but we need them, too.

    (Brief reply from Austin: Sounds like an argument for comparative effectiveness and cost effectiveness. I’d bundle it with value-based design.)

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    • Sticks, carrots, whatever… the measure of success comes from seeing non-zero sum innovations in delivery system redesign which improve the value (increase quality and affordability).

      Sticks which only serve to gore one’s ox will and may rely on zero sum dynamics. I contend that if no redesign of the delivery system occurs then supply and demand will factor in, shortages of services will occur, lines will lengthen and we will control costs through access constraints – not the best social value.

      We want a population living longer, healthier and more productive lives as the result of an optimal delivery system – that we do not have today.

      So, sticks or carrots, if they are used to tinker with a dysfunctional system, then we are going to continue to struggle.

    • I agree… we’re going to have to reduce the number of unwarranted procedures and the reimbursement for procedures.
      Doctors and hospitals earn a much higher hourly rate from procedures so they do more procedures (whether they are necessary or not).
      If procedures were reimbursed at a comparable hourly rate and if there were strong requirements to prove that a procedure was actually useful and necessary, we could cut our health care costs to something approaching the rest of the developed world (which already does this).
      However, since corporate money controls the political world and these reforms would mean a lot less money for corporations, this will not happen.

    • well, the data is going to exist so it’s a question of what to do with it. The quality reporting for HITECH/EHR incentives will be at the physician level with performance information on 6 out of 44 measures. For purposes of the EHR incentive, it’s just pay-for-reporting.

      At some point, though, that data can be analyzed to develop benchmarks and goals. Once that happens, it’s not a far cry to imagine that data folded in with PQRI data to form the basis of a searchable quality-of-my-provider database.

      I think P4P will happen, but I also think that it’s not unreasonable to expect such a database might be in the pipeline. Then, in addition to P4P, you have public shame, and market-driven competitiveness incentivizing providers.

    • I think the general direction of the solution was alluded to in the previous post on this topic:
      “The same colleague who told me about the study suggested that we need to change the organizational structure of the practice, ie change the system, so quality doesn’t rely on one person or one process. I agree that’s much more likely to work. Others will say that’s the point of ACOs. But as we’ve discussed before, there are lots of reasons to believe ACOs won’t lower costs (or improve quality).”

      Not all ACOs and P4P schemes are alike, of course. In fact, there is encouraging news from MA recently that a large pilot that includes gainsharing is doing very well.
      Yes, it’s a press release so expect some spin, and it is only one year of a five year pilot, but still this is promising and I would not write it off. You mention the need for a stick as well as a carrot. Well, this type of risk-sharing arrangement has it, as long as the break even point requires some improvement in efficiency and quality. A stick may also be required to get the health system to agree to such a payment arrangement, of course.

    • Actually, what will get ACOs to accept such payment schemes with teeth is probably best described as neither a carrot nor a stick, but a sword of Damocles.