Doctors who don’t know about the Physician Quality Reporting System should take a moment to familiarize themselves with PQRS measures – these represent one of the first government-sponsored instances of a Pay for Performance (P4P) compensation structure. Currently physicians who report PQRS measures receive an incentive payment, but starting in 2015, physicians will actually be penalized for not reporting PQRS measures.
This is a prelude to a gigantic shift in the payment structure used in the healthcare industry. Pay for Performance is gaining momentum in hospitals and with insurance companies, promising to incentivize physicians to focus more on customer satisfaction and improving the treatment of chronic conditions. Even practices that are resistant to implementing a Pay for Performance structure are starting to consider the benefits that this payment model would have.
Some of the key issues Pay for Performance is designed to address include:
- rising medical costs
- increase in chronic care conditions
- the need for better healthcare utilization and technology implementation
- shift toward consumer-directed healthcare
- demands for improvements in care quality
Pay for Performance is a system based on ‘quality rankings,’ including better test results and overall health improvement for patients with chronic care conditions (i.e. diabetes, hypertension, etc.). Ultimately Pay for Performance structures are focused on patient outcomes. The AAFP stated that the implementation of Pay for Performance structure could increase “physician use of electronic health information technology, evidence-based clinical guidelines… and access to appropriate and timely care.” [1] But while many institutions and larger entities are interested in adopting Pay for Performance, it is important to consider how both patients and physicians feel about P4P.
Patients on Pay for Performance
The consulting firm PwC surveyed 6,000 consumers online to learn how patients feel about healthcare customer service currently. [2] It is particularly important to consider this issue from the patient perspective as consumers become more and more accustomed to the new customer focus adopted by other businesses in the service industry (banks, hotels, etc). The results of the study were quite surprising.
According to PwC’s study, only 8 percent of consumers ranked price as the top factor they considered when choosing a physician or hospital. The two top factors were personal travel, at 69 percent, and patient health insurances, at 50 percent. While hospitals and practices are unable to directly affect these two factors, these may not be the most important way to connect with patients. Personal recommendations from other patients were 2.6 times more likely to influence a ‘purchase,’ or provider selection, in health care than in other industries. This highlights the importance of establishing a social presence, even for medical practices.
Physicians on Pay for Performance
Most physicians are skeptical of the Pay for Performance structure for two main reasons. The first is that consumers don’t necessarily know or want what’s best for them. Pay for Performance could result in patients being over-prescribed antibiotics or painkillers or patients undergoing unnecessary tests just to boost their satisfaction rating.
The other reason physicians are resistant to adopting P4P is that most Pay for Performance measurements are based on patient improvement. It is difficult to determine how much influence physicians really have on their patients’ behaviors on a day-to-day basis – no matter the quality of care or follow-up doctors provide, ultimately improvement is in the hands of the patients. A study done by JAMA found that physicians who frequently see under-insured, minority, and non-English-speaking patients experienced lower quality rankings while doctors who saw older patients had higher quality rankings – this means that a physician’s quality ranking is high dependent on their patient pool. [3] Adopting a Pay for Performance structure would unfairly penalize physicians who saw patients associated with these lower quality rankings.
Should Pay for Performance Be Adopted?
Ultimately the biggest barrier to the adoption of Pay for Performance is that it is difficult to determine how it should be structured so that it does not negatively influence the way that care is provided. While it does promise to help speed physician and practice adoption of technology that can improve the quality of care, the industry should carefully consider the impact that P4P could have on physicians. Factors such as the wide dispersal of care, physician patient panels, and the impact on prescriptions must be carefully considered before mandating Pay for Performance. Let us know what you think of the Pay for Performance compensation structure.
Sources:
[1] – AAFP: read more
[2] – PwC: read more
[3] – JAMA: read more