Pay-For-Performance - Is it Worth Pursuing?
Pay for Performance is becoming more widespread.
According to a Robert Wood Johnson Foundation report in 2006 approximately 30% of primary care physicians had pay for performance contracts with insurers.
Medicare is involved in Pay for Performance in both hospitals and primary care settings.
I am sure that it will evolve and become even more widespread.
Let me share with you some points about these programs in general and whether you should spend more time pursuing them.
Is it worth your time to seriously pursue extra payment from Pay for Performance programs? Perhaps you are already involved.
Do you need to understand more? I have read several reports that indicate a primary care physician can add an additional 5% to their current income by using Pay for Performance programs.
One colleague recently indicated to me that one healthcare site generated several thousand dollars of extra income from a Pay for Performance program by temporarily hiring a nurse's aide to call female patients and remind them to have a mammogram if they hadn't had one in the past year.
Another physician reported in the journal Family Practice Management that he hired two staff members just to coordinate pay for performance initiatives and to contact patients.
He said that his primary goal was to improve his patients' health, but he did generate extra income too.
I believe that focusing on Pay for Performance programs using a Lean Quality Improvement approach would significantly boost the income above the 5% typically reported.
Given that Pay for Performance may be worth pursuing, how difficult is it to understand and implement? Some areas have many different plans.
According to a Robert Woods Johnson podcast, there are so many different plans in the Minneapolis area that it is difficult to comprehend them well.
Even if there are only a spare number of plans in your area, getting information about them may be difficult.
One way to untangle the complexity and find out more about your area is through an online tool of the Leapfrog Group; it has an online compendium of programs available by state.
If you would like the link to this compendium, I would gladly provide it to you if you email me.
Many physicians, I am sure, are more interested in whether Pay for Performance improves patient health overall, not whether it significantly improves income.
The Robert Wood Johnson Foundation reported that Pay for Performance did improve quality at hospitals but that the picture is not so clear in the primary care setting.
In studies they have done they have not been able to ascertain whether quality in care improvements are due to Pay for Performance programs or other programs in place at the time.
However, I have noticed that many of the rewards from these programs use incentives based upon the government's Agency for Healthcare Research and Quality's guidelines.
As there are many different programs in different geographical regions, there are also several different approaches, each of which has its strengths and weaknesses: --Reward to a site is based upon improvement relative to the site's previous achievements and is based upon fixed objectives.
For example, a site is rewarded for improving on the percent of mammograms done by its patients.
This approach rewards the continuous quality improvement approach.
--Reward to a site is based upon "improvement" relative to other healthcare sites.
For example, a site is rewarded if its percent of "improvement" is in the top 20%.
A group which shows significant improvement may still not be rewarded if it falls below the percentile of relative improvement that is designated for rewards.
--Reward is based upon completing a designated rate of service.
For example, rewards are given to groups which have 75% or more of its eligible patients complete a mammogram in the past year.
Groups with a large number of patients with poorer education or who underutilize healthcare services may have a hard time meeting this approach.
--Reward is based upon completing a service relative to other physician groups.
For instance, a group may be rewarded for being in the top 25% of groups being measured for completion of mammograms by eligible patients.
Those groups who have already high rates have little incentive to improve and some groups due to many factors may never be able to be in the top 25% of a measure even though they significantly improve from year to year.
Establishing a program at your site which actively seeks rewards based upon Pay for Performance takes a lot of work, given the factors listed above; however, if the approach is organized and uses Lean quality improvement techniques, I believe the returns in patient health and income will be well worth it.
Let me give you some ideas of how a primary care site might approach such a task.
Even though the setting for my suggestions is based upon the primary care site, the principles are easily adapted to most healthcare sites with some slight modifications.
The principles are taken from my work and training in quality improvement and largely drawn from the knowledge base of the American Society of Quality.
The first thing to accomplish is to designate a champion or leader of the project.
Every quality improvement project or design of a new service or product needs someone responsible for seeing that the undertaking stays on track, that those involved work well together and that the implementation of the involved processes go forward smoothly.
In the primary care setting the office manager would be a good candidate.
The manager should first investigate the various Pay for Performance programs available in the site's geographical region and be able to explain the intricacies of each to those who will be on the design and implementation team.
After the research, the champion should build a team to organize and implement a Pay for Performance program at the site.
Who should be on a team? A physician, of course.
The physician can help determine which elements of the various available programs best fit the practice.
For instance, should the practice focus on improving the treatment of asthma with prescription medication rather than inhalers? Perhaps the office already has a good habit of doing this and can be rewarded for doing so.
Perhaps the physicians are adept at treating Medicare patients with chronic diseases; if so, then it might want to screen for alcohol and drug misuse as Medicare has recently started rewarding this activity.
Besides the physician the design and implementation team will require several other employees.
Billing will need to be represented in order to concentrate on the codes for the rewards being sought.
Nurses will be involved since they may be able to significantly carry out many of the activities required to receive the rewards and take some pressure off the physicians.
Those who pull medical records for patient visits might be included as they may have the task of including reminders to the physician or nurse who is contacting the patient to perform a certain activity that is eligible for a reward.
For instance, a note might be included in the file of an asthmatic to be sure to check to see that inhalers are being replaced with medication.
If the office has an IT staff member then he/she should be included as many of the reminders and record keeping can be done through registries, if they are used in the office.
Once the champion is educated and once the physicians have chosen which elements of various programs best fit the practice, the team should be assembled to design the program.
The best approach to this, I believe, is to get input from all the representatives and plot the process on a map as it evolves.
Once the final process is determined, it should be written out in a handbook of procedures and all staff should have copy of the new process and understand their roles.
The champion should then deploy the process and keep a record of its success based upon measures agreed upon during the design of the process; one of the measures should be return on investment.
As a final note, I think that all programs designed for implementation at a healthcare site should include patient satisfaction as it has been shown that patients who are highly satisfied generally have better healthcare outcomes.
Further, practices should try to implement prevention services based upon those recommended in the July, 2006 edition of the American Journal of Preventive Medicine.
If you do implement these approaches the impact upon your patients will be enhanced and your rewards should be greater.
Summarily, even though Pay for Performance programs designed by payers are varied and generally complex, the rewards for the effort taken to implement activities at a healthcare site are generally worth the time.
Hospitals in general have been shown to increase their overall quality even though the same has not been shown to be true of primary care sites yet.
Nonetheless, the financial rewards can be significant and this is important as the financial returns in healthcare are becoming slimmer at many locations.
Implementing a program to reap the rewards of pay for performance through the techniques of Lean quality improvement will return even greater rewards.
According to a Robert Wood Johnson Foundation report in 2006 approximately 30% of primary care physicians had pay for performance contracts with insurers.
Medicare is involved in Pay for Performance in both hospitals and primary care settings.
I am sure that it will evolve and become even more widespread.
Let me share with you some points about these programs in general and whether you should spend more time pursuing them.
Is it worth your time to seriously pursue extra payment from Pay for Performance programs? Perhaps you are already involved.
Do you need to understand more? I have read several reports that indicate a primary care physician can add an additional 5% to their current income by using Pay for Performance programs.
One colleague recently indicated to me that one healthcare site generated several thousand dollars of extra income from a Pay for Performance program by temporarily hiring a nurse's aide to call female patients and remind them to have a mammogram if they hadn't had one in the past year.
Another physician reported in the journal Family Practice Management that he hired two staff members just to coordinate pay for performance initiatives and to contact patients.
He said that his primary goal was to improve his patients' health, but he did generate extra income too.
I believe that focusing on Pay for Performance programs using a Lean Quality Improvement approach would significantly boost the income above the 5% typically reported.
Given that Pay for Performance may be worth pursuing, how difficult is it to understand and implement? Some areas have many different plans.
According to a Robert Woods Johnson podcast, there are so many different plans in the Minneapolis area that it is difficult to comprehend them well.
Even if there are only a spare number of plans in your area, getting information about them may be difficult.
One way to untangle the complexity and find out more about your area is through an online tool of the Leapfrog Group; it has an online compendium of programs available by state.
If you would like the link to this compendium, I would gladly provide it to you if you email me.
Many physicians, I am sure, are more interested in whether Pay for Performance improves patient health overall, not whether it significantly improves income.
The Robert Wood Johnson Foundation reported that Pay for Performance did improve quality at hospitals but that the picture is not so clear in the primary care setting.
In studies they have done they have not been able to ascertain whether quality in care improvements are due to Pay for Performance programs or other programs in place at the time.
However, I have noticed that many of the rewards from these programs use incentives based upon the government's Agency for Healthcare Research and Quality's guidelines.
As there are many different programs in different geographical regions, there are also several different approaches, each of which has its strengths and weaknesses: --Reward to a site is based upon improvement relative to the site's previous achievements and is based upon fixed objectives.
For example, a site is rewarded for improving on the percent of mammograms done by its patients.
This approach rewards the continuous quality improvement approach.
--Reward to a site is based upon "improvement" relative to other healthcare sites.
For example, a site is rewarded if its percent of "improvement" is in the top 20%.
A group which shows significant improvement may still not be rewarded if it falls below the percentile of relative improvement that is designated for rewards.
--Reward is based upon completing a designated rate of service.
For example, rewards are given to groups which have 75% or more of its eligible patients complete a mammogram in the past year.
Groups with a large number of patients with poorer education or who underutilize healthcare services may have a hard time meeting this approach.
--Reward is based upon completing a service relative to other physician groups.
For instance, a group may be rewarded for being in the top 25% of groups being measured for completion of mammograms by eligible patients.
Those groups who have already high rates have little incentive to improve and some groups due to many factors may never be able to be in the top 25% of a measure even though they significantly improve from year to year.
Establishing a program at your site which actively seeks rewards based upon Pay for Performance takes a lot of work, given the factors listed above; however, if the approach is organized and uses Lean quality improvement techniques, I believe the returns in patient health and income will be well worth it.
Let me give you some ideas of how a primary care site might approach such a task.
Even though the setting for my suggestions is based upon the primary care site, the principles are easily adapted to most healthcare sites with some slight modifications.
The principles are taken from my work and training in quality improvement and largely drawn from the knowledge base of the American Society of Quality.
The first thing to accomplish is to designate a champion or leader of the project.
Every quality improvement project or design of a new service or product needs someone responsible for seeing that the undertaking stays on track, that those involved work well together and that the implementation of the involved processes go forward smoothly.
In the primary care setting the office manager would be a good candidate.
The manager should first investigate the various Pay for Performance programs available in the site's geographical region and be able to explain the intricacies of each to those who will be on the design and implementation team.
After the research, the champion should build a team to organize and implement a Pay for Performance program at the site.
Who should be on a team? A physician, of course.
The physician can help determine which elements of the various available programs best fit the practice.
For instance, should the practice focus on improving the treatment of asthma with prescription medication rather than inhalers? Perhaps the office already has a good habit of doing this and can be rewarded for doing so.
Perhaps the physicians are adept at treating Medicare patients with chronic diseases; if so, then it might want to screen for alcohol and drug misuse as Medicare has recently started rewarding this activity.
Besides the physician the design and implementation team will require several other employees.
Billing will need to be represented in order to concentrate on the codes for the rewards being sought.
Nurses will be involved since they may be able to significantly carry out many of the activities required to receive the rewards and take some pressure off the physicians.
Those who pull medical records for patient visits might be included as they may have the task of including reminders to the physician or nurse who is contacting the patient to perform a certain activity that is eligible for a reward.
For instance, a note might be included in the file of an asthmatic to be sure to check to see that inhalers are being replaced with medication.
If the office has an IT staff member then he/she should be included as many of the reminders and record keeping can be done through registries, if they are used in the office.
Once the champion is educated and once the physicians have chosen which elements of various programs best fit the practice, the team should be assembled to design the program.
The best approach to this, I believe, is to get input from all the representatives and plot the process on a map as it evolves.
Once the final process is determined, it should be written out in a handbook of procedures and all staff should have copy of the new process and understand their roles.
The champion should then deploy the process and keep a record of its success based upon measures agreed upon during the design of the process; one of the measures should be return on investment.
As a final note, I think that all programs designed for implementation at a healthcare site should include patient satisfaction as it has been shown that patients who are highly satisfied generally have better healthcare outcomes.
Further, practices should try to implement prevention services based upon those recommended in the July, 2006 edition of the American Journal of Preventive Medicine.
If you do implement these approaches the impact upon your patients will be enhanced and your rewards should be greater.
Summarily, even though Pay for Performance programs designed by payers are varied and generally complex, the rewards for the effort taken to implement activities at a healthcare site are generally worth the time.
Hospitals in general have been shown to increase their overall quality even though the same has not been shown to be true of primary care sites yet.
Nonetheless, the financial rewards can be significant and this is important as the financial returns in healthcare are becoming slimmer at many locations.
Implementing a program to reap the rewards of pay for performance through the techniques of Lean quality improvement will return even greater rewards.
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