Database Showcases "Pay for Performance" and Incentive Initiatives

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Policymakers seeking ways to improve quality of health care increasingly are investigating "pay-for-perfromance" and other incentive-oriented initiatives designed to reward a range of health care providers and insurers for quality and efficiency improvements and also provide consumers with incentives for choosing the appropriate care. The Leapfrog Group, a coalition of more than 150 public and private organizations that provide health care benefits and are seeking ways to improve the health care delivery system, has developed a public Web-based compendium of incentive and reward programs aimed at improving health care in both the inpatient and outpatient care settings. The compendium documents and categorizes financial programs, such as those that reward providers with quality bonuses, and non-financial programs, such as those that reward providers with public recognition. The majority of the programs included in the compendium are initiated by health plans, purchasers, and purchasing coalitions and target hospitals, physicians, health plans, and consumers. Users are able to sort by location and program target and search the programs by using a built-in keyword search function.

The issue: The Leapfrog Group, a coalition of more than 150 public and private organizations that provide health care benefits, was founded to address patient safety and quality issues in the American health care system. As such, it has started collecting data on innovative incentive reward programs and posting this information on its Web site. The "Incentive and Reward Compendium" is a searchable and sortable database that is available for use by the general public. It includes high-level information on innovative incentive and reward programs created to improve health care quality in the inpatient and outpatient settings. Specifically, the compendium documents and categorizes financial programs, such as those that reward providers with quality bonuses, and non-financial programs, such as those that reward providers with public recognition. Among those included to date, the majority have been initiated by health plans, purchasers, and purchasing coalitions and target hospitals, physicians, health plans, and consumers.

The intervention: The health care quality statistics in the Institute of Medicine's report, To Err Is Human, garnered headlines in 1999. Up to 98,000 Americans die each year from preventable medical mistakes that they experience during hospitalizations. There are more deaths in hospitals each year from these mistakes than there are from vehicle accidents, breast cancer, or HIV/AIDS. Preventable medical mistakes cause other problems as well—they can lead to permanent disabilities, extended hospital stays, longer recoveries, and additional treatments.

The Leapfrog Group was founded by The Business Roundtable, a national association of Fortune 500 CEOs, in response to this problem. Its goal is to address patient safety and quality issues in America's health care system. Since 2000, the coalition has grown to include more than 150 public and private organizations that provide health care benefits. Through its voluntary programs, the Leapfrog Group works to encourage large employers to recognize and reward health plans and hospitals that make breakthrough improvements in patient safety and quality with preferential use and other market reinforcements. In the winter of 2003/2004, the Leapfrog Group started to collect information on innovative incentive and reward programs launched both by its members and other health plans. These initiatives focus on improving care performance in the inpatient and outpatient settings by offering rewards and incentivizes to hospitals, physicians, and health plans for improvements in quality and efficiency.

More recently, the Leapfrog Group has used this information to create a searchable and sortable Web-based database. This new tool is posted on Leapfrog's Web site and is available for use by the general public. Called the "Incentive and Reward Compendium," it categorizes both financial and nonfinancial incentive and reward programs aimed at improving health care. The Leapfrog Group performed comprehensive literature and Internet searches to gather the initial incentive and reward program information. As such, most of the content comes from previously released materials including media articles, published reports, and Web presentations. Internal contacts at the administering organizations are responsible for ensuring the accuracy of the program descriptions. In addition, new submissions are encouraged and are continuously added to the Web site.

Programs that use performance measures other than Leapfrog's quality and safety practices also are encouraged to contribute to the compendium. Organizations that would like to submit new program information or update information already posted on the Web site can do so online. The "Compendium Guide and Glossary" includes instructions for new submissions and revisions, as well as user guidelines. In brief, the listings include the following information: name of the initiating organization, formal program title, location, date of initiation, target and focus, performance measures, incentive/reward methodology, program impact, administering organization contacts, source of information, and a Web URL.

More specifically, the compendium documents and categorizes financial programs, such as those that reward providers with quality bonuses, and non-financial programs, such as those that reward providers with public recognition. Among the programs that have been included to date, the majority are initiated by health plans, purchasers, and purchasing coalitions and target hospitals, physicians, health plans, and consumers. Users are able to sort by location and program target and search the programs by using a built-in keyword search function. For instance, a search might focus on certain performance measures used in programs such as HEDIS or Leapfrog's four measures of quality and safety. The compendium is meant to impart a different message to each of its intended audiences.

Self-insured purchasers, or their carriers if fully insured, can identify ways to reward physicians, health plans, and hospitals for improving patient care delivery processes. Health plans can share their best practices for incentive and reward programs, as well as use the site as a venue for purchaser/plan coordination. Finally, physicians and hospitals can use the database to learn about the various types of incentive and reward programs and the role of their colleagues are in these programs. Though the database does not contain performance data about individual physicians or specific hospitals or health plans, it does provide information about the overall impact of various programs. A Leapfrog Initiative, for example, led by Empire Blue Cross, IBM, PepsiCo, Verizon, and Xerox in New York State, aimed to save lives by providing financial incentives to hospitals that rapidly achieve proven patient safety standards. Since January 1, 2002, hospitals in Empire's networks have been eligible to receive a four-percent bonus if they meet two key quality standards—computerized physician order entry (CPOE) and intensive care unit (ICU) staffing. To be eligible, individual hospitals must self-certify on the Leapfrog Web site. The compendium reports that, as of December 31, 2002, 53 hospitals had completed the Leapfrog survey and 31 Incentive Program hospitals had fully implemented one of two safety measures.

For more information, go to the Incentive and Reward Compendium Web site.

August 2004

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