Two Movements, Not Intersecting Pay for performance and public reporting Efforts to reduce disparities in health care delivery

A Critical Period? P4P and public reporting are expanding rapidly yet theory and research in other industries predict that unintended consequences are likely relatively little research is available on the effects of P4P and public reporting in health care

Sources of Concern Re External Incentives and Disparities agency theory experience in other industries (including No Child Left Behind) NY State CABG program national physician survey

P4P for Physicians? “if an employee is expected to devote time and effort to some activity for which performance cannot be measured at all, then incentive pay cannot be effectively used for other activities.” P. Milgrom. Economics, Organization, and Management

. “If my pay depended on A1c values, I have patients whom I would have to fire. The poor, unmotivated, obese, and noncompliant would all have to find new MDs.”

. “Quality of care is better in more up- scale communities and better educated patients and with much greater income. So, doctors in underserved and poverty areas will have worse outcomes on measured health care standards.”

4 Ways in Which External Incentives Might Increase Disparities rich providers may get richer, poor get poorer providers may avoid minority patients some minority patients may have less ability to benefit from: –public reporting –provider organizations’ QI programs

Designing External Incentives with Disparities in Mind reward both absolute quality scores and improvement over time use risk adjustment and/or stratified analyses use pt. satisfaction and rotating measures to minimize teaching to the test only use external incentives when statistically reliable and valid measurement can be done research evaluation of external incentives program should include possible unintended consequences