Financial Incentives: Pay for Performance (P4P) and the Effects with the Chronically Ill Patients David Conley, MSc Alberto Coustasse, MD, Dr. PH, MBA Graduate School of Management, College of Business Marshall University

INTRODUCTION Pay for Performance (P4P) is a reimbursement method based on quality outcome, quality of care and overall patient satisfaction. Most prevalent use of P4P is through capitation and withholds in a managed care environment.

INTRODUCTION United Kingdom National Health Service: –One of the few reimbursement systems in UK –Based in family medicine and primary care physician groups. –Promotes early detection of diseases, proper nutrition, healthy lifestyles, immunizations and annual examinations.

INTRODUCTION In the UKNHS – –All patients enrolled have full life records (EHR). –All physicians and facilities have annual performance reviews based on regional and national standards. –Financial incentives are capitalized through professional staffing such as more nurses and administrative staff.

INTRODUCTION In the US – –Still in its infancy. Started in –CMS have used variations of P4P to streamline programs to improve efficiency, boost quality and control cost. –A survey in 2007 presented physician concerns including patient dumping and payment without quality improvements.

INTRODUCTION P4P – –Primary care and Family care physicians at fore- front as preventative care providers. –HMO’s physicians represent majority of PCP’s in P4P. –P4P language is part of both the Deficit Reduction Act of 2005 and the Patient Protection and Affordable Care Act of 2010.

INTRODUCTION Chronic Diseases: Diabetes, HTN, heart disease, stroke, cancer, COPD. –Are the leading causes of mortality in world; represented 63% of all deaths. –2004 – 133 million patients in US affected. –2020 – It is projected that 165 million individuals will be affected in US.

Condition% Recommended Care Received Low back pain68.5 Coronary artery disease68.0 Hypertension64.7 Depression57.7 Orthopedic conditions57.2 Colorectal cancer53.9 Asthma53.5 Benign prostatic hyperplasia53.0 Hyperlipidemia48.6 Diabetes mellitus45.4 Headaches45.2 Urinary tract infection40.7 Hip fracture22.8 Alcohol dependence10.5 RAND Study Confirms Quality Gap

RESULTS New York, Hudson Valley Health Plan –Study preformed between –Physicians could increase annual income up to 25% with just participation. –Focused on immunizations and preventative care in children under 2 years old. –Number of children treated increased overall, though NO change was found in the % of kids immunized with chronic condition such as asthma, epilepsy or cancer.

RESULTS Diabetes care in US, : –Financial evaluation based on annual physician measurements: efficiency, quality and patient satisfaction. –10% Capitation and withhold system used. –ROI calculated using data two years prior to study. –ROI was approximately $2.5 million over two year period.

2005 National P4P Study 2005 National Pay for Performance Study, Med-Vantage 25% increase from 2004

RESULTS CMS / Arkansas Department of Human Resources 2006 –Study based on patients with at least one chronic condition: Heart failure or pneumonia. –Hospitals had to meet 75 th percentile to qualify for bonus when compared to previous year. –$3.9 million in bonus paid to 21 hospitals. –By 2 nd year, quality and performance in heart failure care increased from 61% to 83%.

RESULTS Robert Wood Johnson Foundation, 2010 –Chronic care in primary care settings. –Practices received bonus if quality goals were met. –Study performed in Alabama, Tennessee and Texas. –Care improved, patients were less likely to have follow-up complications. –Care and incentives did not improve initial baseline. –There were non significant cost savings or increase of patients.

DISCUSSION Economic studies on financial incentives and P4P have not been able to demonstrate effective improvements in quality or efficiency. It has been found limited reimbursement measures and positive outcomes. Several case studies showed significant payouts though had little bearing on reimbursement programs.

Pay for Performance – Proof of Concept: A Tale of Two Countries Minimal Rewards 20% Increase in Fees Median Percent Improvement Source: Robert S. Galvin, MD, 2 nd National P4P Summit, February 14, 2007

CONCLUSION Reimbursement programs such as P4P, when considering patients with one or more chronic conditions, currently do not benefit either physicians or patients.

Fixing current payment dysfunction with “pay for performance” as an add-on to existing system is like….Fixing the American obesity epidemic by the “add- on” of broccoli to the Big Mac WE NEED: a new diet and portion control

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