1. Gary J. Young 1 Designing and Implementing Pay-for-Performance Programs: Ongoing Challenges Gary J. Young, J.D., Ph.D. Boston University Presentation for AHRQ Annual Meeting Session on How Pay-for-Performance Fits with a Value Agenda September 28, 2007 Financial support from Agency for Healthcare Research and Quality; Robert Wood Johnson Foundation

2. Gary J. Young2 P4P: Will it Work? Recent evidence points to modest gains from P4P in terms of provider adherence. Selected Findings: Rosenthal et al. (2006) Relative increase of 3.6 percentage points for cervical cancer screening Rosenthal et al. (2006) Relative increase of 3.6 percentage points for cervical cancer screening Levin-Scherz et al. (2006) Levin-Scherz et al. (2006) Relative increase of 2-19 percentage points for diabetes measures Relative increase of 2-19 percentage points for diabetes measures Lindenauer et a. (2007) CMS Premier demonstration: Relative increase of 2.6 percentage points for AMI measures; 3.4 points for pneumonia measures; 4.1 points for heart failure measures. Lindenauer et a. (2007) CMS Premier demonstration: Relative increase of 2.6 percentage points for AMI measures; 3.4 points for pneumonia measures; 4.1 points for heart failure measures. Young et al. (2007) Young et al. (2007) Absolute increase of 7 percentage points for diabetes measure (e.g., eye exam)

3. Gary J. Young3 Key Challenges Provider Engagement Provider Engagement Unit of Accountability Unit of Accountability Quality Measures Quality Measures Provider Capability Provider Capability Incentive Structure Incentive Structure Data Systems and Measurement Data Systems and Measurement Unintended Consequences Unintended Consequences

4. Gary J. Young4 Supporting Research 7 Demonstration Sites – Rewarding Results Surveys of Physicians (over 4000 surveyed; approximately 1500 responses) Interviews with over 60 Senior Managers of Physician Organizations Focus Groups with Providers and Payers Site Visits to Provider Organizations Findings of Other Researchers

5. Gary J. Young5 Provider Engagement Physicians appear comfortable with the concept of P4P. Physicians appear comfortable with the concept of P4P. -- Strong preference for incentives linked to quality vs. utilization or productivity

6. Gary J. Young6 Survey Results

7. Gary J. Young7 Survey Results

8. Gary J. Young8 Provider Engagement Physicians do not appear to have a strong understanding of the P4P programs in which they participate. Conventional forms of communicating w/ providers appear inadequate (very Low physician survey scores regarding understanding of programs). Physicians do not appear to have a strong understanding of the P4P programs in which they participate. Conventional forms of communicating w/ providers appear inadequate (very Low physician survey scores regarding understanding of programs). Many physicians appear to feel disenfranchised. Physician involvement in program design can help secure buy-in (e.g., selection/modification of measures). Many physicians appear to feel disenfranchised. Physician involvement in program design can help secure buy-in (e.g., selection/modification of measures).

9. Gary J. Young9 Unit of Accountability Unit of Accountability Sponsors face difficult choices and possible tradeoffs between selecting individuals versus organizations. Sponsors face difficult choices and possible tradeoffs between selecting individuals versus organizations. -- systems engineering vs. physician initiative -- stimulating investment in QI infrastructure vs. enhancing engagement of front-line providers.

10. Gary J. Young10 Quality Measures Physicians generally comfortable with standardized measures such as HEDIS and HQA. Physicians generally comfortable with standardized measures such as HEDIS and HQA. --Outcomes vs. Process Measures --Specialists and Non-Acute Care Settings

11. Gary J. Young11 Provider Capability Providers reveal anxiety about capabilities to perform well on quality measures. Providers reveal anxiety about capabilities to perform well on quality measures. --Hospitals with well developed QI infrastructure appeared to have a distinct advantage in BCBSM P4P With limited provider capability, one-time performance gains may be common. With limited provider capability, one-time performance gains may be common. --In some situations, learning goals should possibly precede performance goals

12. Gary J. Young12

13. Gary J. Young13 Incentive Structure Both program sponsors and providers are divided on many issues regarding incentive structure. Both program sponsors and providers are divided on many issues regarding incentive structure. --Attainment vs. Improvement --Bonus only vs. Penalties (e.g., withholds)

14. Gary J. Young14 Data Systems and Measurement Providers have strong concerns about data reliability and validity. Providers have strong concerns about data reliability and validity. --Claims vs. Charts (appeals process/reserve fund) -- Small Numbers (composite scores multi-payer initiatives)

15. Gary J. Young15 Unintended Consequences Physician surveys reveal no major concerns about UC. Physician surveys reveal no major concerns about UC. -- Some studies outside healthcare point to negative impact on innovation. -- P4P in safety net settings may pose unique risks.

16. Gary J. Young16 Concluding Comments P4P can lead to gains in clinical quality, but the magnitude of the gains may be quite modest and time- limited, particularly without substantial improvements in provider infrastructure for quality measurement and improvement. P4P can lead to gains in clinical quality, but the magnitude of the gains may be quite modest and time- limited, particularly without substantial improvements in provider infrastructure for quality measurement and improvement. Physicians do appear comfortable with P4P as a concept, but have certain concerns with the way P4P programs have been designed and implemented. Physicians do appear comfortable with P4P as a concept, but have certain concerns with the way P4P programs have been designed and implemented. Program sponsors face many daunting challenges in designing and implementing programs. Program sponsors face many daunting challenges in designing and implementing programs.