Addressing Issues

Aligning Payment Policies with Care: Incentives and Rewards for Improvement

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Incentives and rewards for improvement
A number of business groups across the country suggest that providing compensation for quality improvement efforts could help achieve the desired results and also improve patient outcomes. They encourage hospitals to adopt quality-improvement tools such as electronic prescription ordering and other new technologies. These groups include the Leapfrog Group, a national business coalition, the Midwest Business Group on Health, the Pacific Business Group on Health, and others.

The Central Florida Health Care Coalition, a group of large Florida employers including Disney, Lockheed Martin, and Universal Studios, is planning to give financial rewards to physicians who meet certain quality and best practice standards. Once the plan is implemented, the coalition will compare physicians' clinical, financial, and patient satisfaction data with benchmark standards developed by the Agency for Health Research and Quality for the treatment of diseases such as asthma, diabetes, and heart failure. The data will be publicly available to help patients making health care choices.
www.flhcc.com

The Pacific Business Group on Health collects performance data and negotiates performance guarantees tied specifically to quality targets for each of the HMOs used by the purchasers it represents. Quality measures for diabetes include customer satisfaction as well as blood glucose monitoring and retinal exams, cholesterol screening, flu vaccines, and advising smokers to quit. Two percent of premium payments are at risk based on how well the plans do in achieving agreed-upon improvements. 19 The data are publicly reported for both purchasers and consumers.

Economic incentives can encourage health care providers to take a broader perspective when considering how to keep people healthy. Better reimbursement rates for brief interventions to assist smokers to quit, to encourage exercise routines, or to counsel for weight loss could motivate providers to undertake these behavioral interventions. Similarly, incentives for health care purchasers and payers can be structured to provide stronger emphasis on the principles of "purchasing population health" or "paying for outcomes." 20

Purchasers contracting with provider groups can build in incentives oriented around their successes in the design and delivery of proven health promotion interventions to the populations most at risk. For example, incentives could include provider office staff support for data management, data abstraction, or continuing education. On a larger scale, policies could be envisioned that set aside small portions of medical care premiums or payments for redeployment for community-wide initiatives, with incentives for measures such as those related to air quality or design for walking and biking.

For these measures to work, public policymakers need to begin thinking in terms of a health agenda rather than a health care financing agenda. In prioritizing policy initiatives, health care cost savings should not be the only way to rank the importance of interventions. Sometimes prevention will save money, and sometimes it will not. Instead, quality of life and health status of populations need to be what drives priorities in health policy. 1

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Opportunities

Creative new models for policy development and implementation could be structured to induce the provision of behavior-change interventions, by fostering linkages with supportive community-based resources and rewarding broad efforts to improve the population health and quality of life. Financial incentives could nurture health-promoting behavior and community initiatives on active lifestyles, eating healthy foods, and smoking cessation. 1

Rewarding Results

The California Healthcare Foundation reports on a collaborative project in eight Medicaid health plans titled "Local Initiative Rewarding Results," to test the impact of financial and non-financial incentives on provider quality in preventive care services for children. Results of the project indicate that pay-for-performance programs can work in a Medicaid managed care setting, but only if health plans place enough dollars at stake and communicate effectively with providers.
www.chcf.org/topics/chronicdisease/index.cfm?itemID=60069

AHRQ to Evaluate New Grants Announced Under Rewarding Results Project (AHRQ Electronic Newsletter - October 4, 2002, Issue #72
www.ahrq.gov/news/enews/enews72.htm#3

AHRQ has awarded $1.5 million to Boston University researchers to conduct a comprehensive national evaluation of six pilot projects designed to reward physicians and hospitals for providing high-quality health care. Under the Rewarding Results pilot projects, providers become eligible for financial or non-financial incentives after meeting specific quality goals tied to medical outcomes and clinical performance. Grants totaling $4.9 million were awarded to six health plans and other organizations September 2002 under the Rewarding Results program, which is administered by the National Health Care Purchasing Institute with funding from the Robert Wood Johnson Foundation, the California HealthCare Foundation, and the Commonwealth Fund. The projects will test ways to implement recommendations from the 2001 Institute of Medicine report Crossing the Quality Chasm. 5

NCQA/ADA Diabetes Provider Recognition Program
www.ncqa.org/dprp/dprpmain.htm

The National Committee for Quality Assurance (NCQA) is a leader in the effort to assess, measure and report on the quality of care provided by the nation's managed care organizations. More than three quarters of Americans enrolled in HMOs are in plans that have been reviewed by NCQA. NCQA also manages the evolution of HEDIS®, the performance measurement tool used by more than 90 percent of the nation's health plans.

The NCQA Diabetes Provider Recognition Program cosponsored by the American Diabetes Association (ADA) is a voluntary program for individual physicians or physician groups that provide care to people with diabetes. Physicians in all settings can achieve Recognition by submitting data that demonstrates they are providing quality diabetes care. The Program assesses key measures that were carefully defined and tested for their relationship to improved care for people with diabetes. Program measures are part of NCQA's Health Plan Employer Data and Information Set (HEDIS®) and are consistent with the Diabetes Quality Improvement Project (DQIP) measures, but go beyond DQIP by applying performance criteria to each measure.

Program goals are to:

• Improve care given to people with diabetes by identifying physicians and groups who are providing quality diabetes care.
• Motivate other physicians and groups to document and improve their delivery of diabetes care.

To support these goals the Diabetes Provider Recognition Program assesses physicians on their performance on 8 key measures of care for pediatric patients and 11 key measures of care for adult patients. The 11 measures relate to A1C testing, eye exams, foot exams, blood pressure measurement, kidney assessment, lipid profile, tobacco use and counseling, self-management education, medical nutrition counseling, self-monitoring of blood glucose, and patient satisfaction.

For more information on DQIP click here

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