Pay for Performance

Health reform discussions over the past couple of years (centered on the Obama/McCain election) have shed light on the state of healthcare in the U.S. for the American public. As policymakers and elected officials have attempted to rectify our somewhat broken healthcare system (it depends on who you ask) a topic that often comes up is healthcare quality. What can we do about quality and the fact that we spend so many dollars on healthcare for below average outcomes? The question has sparked plenty of debate. One suggestion for the quality problem relating specifically to physicians is pay for performance (P4P). This is highly controversial and criticized—especially among primary care physicians. A New York Times article addresses some of the key points of the discussion and a recent study related to P4P published in The Journal of the American Medical Association (JAMA).

The article opens with a primary care physician expressing his dissatisfaction of a letter from an insurance company that notified him of his “quality ranking.” The quality ranking is essentially a way for the insurance company to objectively and uniformly measure their physician partners. This doesn’t seem like a bad idea, actually. However, even though the doctor maintained a high quality ranking he was still unhappy with the system. His argument was that the insurance company shouldn’t assume that the way he practices medicine has any direct connection to patient outcomes. I’ll be completely honest. At first glance it sounds to me as though the doctor wants to make an excuse or “have an out” when quality in his office falls below average. The second thought I had is that doctors in general don’t typically like to be held accountable to anyone because the very nature of their profession offers a high level of autonomy. But it doesn’t make sense that outcomes aren’t correlated to physician care.

The doctor then went on to talk about a patient with high blood pressure that he’d been dealing with for several years. This particular patient couldn’t afford to take time off work for appointments and his argument was that he should not be accountable for her poor health because of her job situation. Okay, I can understand that. However, I believe that for most doctors situations like that are the exception and not the norm. I believe that most people want to obey the doctor’s orders—especially if they have a pretty severe condition. On some level I can understand why this doctor is irritated, but I don’t think the solution is to let all doctors “off the hook.” Performance management measures need to be in place for all employees including doctors.

The JAMA study discussed in The New York Times article reveals that WHO doctors are actually treating makes a difference in P4P rankings. For example, doctors that treat more minorities and non-English speaking or underinsured patients typically have lower quality scores when rankings are not adjusted for these factors. However, after adjusting for the type of patient that the doctor is typically treating, many of the lower ranking doctors increased their scores up to 10 points.

According to Fried and Fottler, performance management is essential because “you can’t manage what you can’t measure.” Physicians can be difficult to work with and they can definitely be difficult to manage—but even they need to be held accountable to some set standards. The goal of performance management is to create goals and an action plan to achieve them. Progress must be monitored to ensure that employees are on target, so set standards must be in place and enforced—even for doctors (Fried, 2008).

I realize that P4P is controversial and many healthcare practitioners believe that it should be done away with. However, I don’t think the solution is to throw the baby out with the bath water. P4P can work, there simply need to be adjustments in place to account for extreme differences in physician patient populations. It will be interesting to see if P4P effectively motivates physicians over time.

References

Chen, P.W. (1 October 2010). Paying doctors for patient performance. The New York Times. Retrieved October 25, 2010 from LEXIS-NEXIS Academic Database.

Fried, B.J. & Fottler, M.D. (2008). Human Resources in Healthcare: Managing for Success (3rd Ed.). Chicago: Health Administration Press.