Hannover 9 February 2012

 Important professional, ethical, regulatory, cultural and other factors interact with financial incentives to influence provider behavior  Context can produce very different behavioral responses to the same financial incentives  Non-financial incentives (influences) vary on 2 axes -- implicit/explicit and internal/external  Important explicit, external influences include: utilization review; clinical protocols; performance measurement, audit and feedback; and public reporting.

 Patient cost-sharing are important influences the outcomes of cost, quality, and equity/access and theoretically can address moral hazard associated with presence of insurance.  Most studies suggest that cost-sharing does deter patient use of services but that involves forgoing both useful and not useful services  Hence the interest in so-called “value-based” benefit designs

 Payment methods are never “pure.” The actual design features determine how the incentives work.  Also the context in which the payment model is applied can produce different behavioral responses.

 Incentive payment methods vary in strength along at least 7 dimensions  Type of service covered  The practice setting  The base payment method  The relative generosity of the base payment  The size of the incentive  The incentive’s immediacy  The presence of counterbalancing monitoring

 This implies that findings from studies on the impact of payment methods may not be easily generalizable  Suggesting the importance of the evidence tables of individual studies that present the details of context and design features  Yet, with sufficient numbers of studies, one can draw some tentative conclusions from a systematic literature review

 For physicians and hospitals, we generally found either that there were no statistically significant effects on quality, cost and utilization, or access or, alternatively, that the effects were significant and in the anticipated direction based on the objectives of the payment method being tested.

 Task 1.2 Input from Collaborative Partners The main purpose of which is to identify any gaps in the Catalogue proposed in the Typology Report, to learn about country-specific variations and issues, to prioritize the methods for Task 1.3 and to see which methods partners want to learn more about – with already published material or possibly new work. The work of 1.2 will be done here and in follow- up communications in the next few weeks.

 The objective here is to produce a short document on 12 payment methods that succinctly describes the method, provides strengths and weaknesses, and design approaches to mitigate weaknesses. Basically 2 page summaries.  The challenge is to capture views on strengths and weaknesses. This exercise is informed by literature but is much more based on practical experience of the partners’ members

 To provide more information about the current use of the various payment methods and to fill in gaps in the literature on specific topics, especially integrated care and pay-for- performance

 MUW – to provide a description of current payment methods for physicians and hospitals by reviewing European Union and OECD sources – a compendium of currently used payment methods  USD – to review how different countries define “integrated care” – similarities and differences to get a better handle on how to characterize and ultimately evaluate the impact of integrated care

 MHH – describe how integrated care is being defined and implemented in Germany and how it relates to the corporatist structure of price and other policy setting. How compatible?  UY -- provide a high-level review of the Quality and Outcomes Framework (QOF) – the most ambitious venture into pay-for- performance with policy implications

 Discuss now which payment methods and whether prototype presentation format works (materials already distributed with WP 1 revised work plan)  UI distributes 12 “attributes” of payment methods – by Feb 29  Comments due with specific suggestions – Mar 23  All collaborative reports due April 13?  Final Draft by April 27, with comments due May 16  Final product before May 31.

 These are criteria for evaluating payment methods – not just on cost, quality and equity/access but also on practical issues like administrative feasibility, “gaming” potential, consumer/patient acceptability  Would be based on the Principles distributed last November but would likely be expanded beyond those  Want to capture country-specific perspectives that should permit identifying relevant criteria to be considered

 We had envisioned a group discussion and consensus process at one of these meetings. Deadlines don’t permit that.  So revised work plan –  Redistribute Principles Feb 15  Provide specific suggestions by Mar 16  One-on-one discussions if necessary Mar 23  Conference call on disagreements Apr 4  UI distributes draft criteria Apr 27  Final comments to UI May 9  Submission of payment methods assessment criteria May31