1. Paying for Quality in the UK: New Models Peter C. Smith Centre for Health Economics, University of York, UK

2. Four elements of the principal/agent problem –Objectives How close are those of principal and agent? –Information How public, how verifiable, how costly? –Incentives Designed vs accidental Numerous design issues –Managerial capacity Designing Auditing Evaluating

3. Incentives: some design issues which measures of performance to use as a basis for rewards; how targets are to be set; over what time period the scheme is to operate; how performance measures along several dimensions are to be combined; how much reward is to be dependent on attainment; what is the link between improved performance and reward what risk sharing arrangements are used audit arrangements evaluation arrangements.

4. Incentives: what are the rewards? Financial (individual) Financial (organizational) Professional advancement An easy time Freedom of action Prestige and perceived worth Intrinsic satisfaction

5. General practice in England All citizens must be registered with a general practitioner Typical practice population 5,500 (but increasing) Average three practitioners per practice Traditional gatekeeping role in NHS 2/3 general practitioners are independent contractors with the NHS Traditional ‘General Medical Services’ contract developed piecemeal over decades - a mixture of capitation, salary, fee for service and grants GPs are used to working in an incentivized environment New GMS contract now in force.

6. The New GMS contract Developed in negotiation between government and providers Approved by 79.4% in a ballot of GPs, with a response rate of 70% Major emphasis on clinical quality Up to 30% of income determined by quality incentives Major reliance on self-reporting (with external audit). http://www.nhsconfed.org/gmscontract/

7. Quality and Outcomes Framework Each practice can earn ‘quality points’ according to reported performance 146 performance indicators 1,050 points distributed across indicators according to perceived importance Points based on absolute level of attainment (not adjusted for local difficulty) About £75 per point for an average practice, but increasing if a difficult environment Minimum income guarantee (no loss of earnings)

8. GMS Contract: Indicators and points at risk Area of practicePIsPoints Clinical76550 Organizational56184 Additional services1036 Patient experience4100 Holistic care (balanced clinical care)-100 Quality payments (balanced quality)-30 Access bonus-50 Maximum1461050

9. GMS Contract: Clinical indicators DomainPIsPoints CHD including LVD etc15121 Stroke or transient ischaemic attack1031 Cancer212 Hypothyroidism28 Diabetes1899 Hypertension5105 Mental health541 Asthma772 COPD845 Epilepsy416 Clinical maximum76550

10. Hypertension: indicators, scale and points at risk Records MinMaxPoints BP 1. The practice can produce a register of patients with established hypertension 9 Diagnosis and initial management BP 2.The percentage of patients with hypertension whose notes record smoking status at least once 259010 BP 3.The % of patients with hypertension who smoke, whose notes contain a record that smoking cessation advice has been offered at least once 259010 Ongoing Management BP 4.The % of patients with hypertension in which there is a record of the blood pressure in the past 9 months 259020 BP 5. The % of patients with hypertension in whom the last blood pressure (in last 9 months) is 150/90 or less 257056

11. The patient experience domain Routine appointments must be not less than 10 minutes (30 points); An ‘approved’ patient survey is undertaken each year (40 points); The practice has ‘reflected on the results and proposed changes if appropriate’ (15 points); The practice has discussed the results as a team with patient representatives, with ‘some evidence that [appropriate] changes have been enacted’ (15 points).

12. Some arithmetic For an average practice: –5,500 patients; –3 practitioners; –average levels of disadvantage. £75 per point So practice income at risk = £75 x 1,050 = £78,750 Per practitioner = £78,750/3 = £26,250 ($50,000) Approximately one third of base income. An intention to rise to £120 per point (a further 60%).

13. GMS contract: the strengths Rewarding what matters –structure, process and outcome Balanced scorecard Local freedom to decide on priorities Real rewards Consistent with national clinical guidelines Developed by the profession Rewards teams, not individuals Commitment to review and update

14. GMS contract: the risks Complexity may dilute its effectiveness Unmeasured activity ignored Reward structure distortive (too easy, too hard, wrong balance) Discourages practice in challenging environments (cream skimming, recruitment of GPs in disadvantaged areas) Discourages collaborative actions (social care) Gaming (e.g. length of consultation) Misrepresentation (lack of effective audit) Ossification Increases managerial costs Undermines professional ethic, morale and unremunerated activity (‘endogenous preferences’).

15. GMS contract. Why UK? Why now? Extra money required to maintain supply of GPs Decision to make finance conditional on improved quality Single (or dominant) payer GPs with registered populations (denominator of many of the performance indicators) Consensus on what constitutes ‘good’ practice (widespread national guidelines) General acceptance amongst GPs of need to improve quality Improving IT infrastructure (forthcoming electronic health record)

16. GMS contract: the priorities? Good system of audit Urgent monitoring, evaluation and review Addressing most grotesque anomalies Better measures of quality and risk adjustment. Design issues: –power and size of incentives –difficulty of targets –risk sharing –avoidance of gaming and other adverse outcomes Maintaining and enhancing the support of GPs