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Hopeful Signs for "P4P"?

Advocates of "pay-for-performance" as a means to improve the quality of health care may have received a boost following publication of the first study to assess the use of quality-based financial incentives in a large health plan. According to an article published recently in the Journal of the American Medical Association, one of the three clinical quality measures used in the study indicated that the plan's physician network that was offered bonus payments outperformed another network that was not.

For the JAMA study, Early Experience with Pay-for-Performance: From Concept to Practice (Oct. 12, 2005), a Commonwealth Fund-supported research team led by Harvard University's Meredith B. Rosenthal, Ph.D., compared PacifiCare health plan's California network, which participated in the "P4P" program, with the plan's Pacific Northwest network, which did not. Rosenthal and her colleagues focused on three clinical care measures: cervical cancer screening, mammography, and hemoglobin testing for diabetic patients.

Quality improved on all three measures, but the only significant difference between the two groups was in cervical cancer screening, where the California network's quality score improved by 5.3 percent, compared with 1.7 percent in the Pacific Northwest. While improvement was modest, the bonuses were also modest, and improvement was assessed over a relatively short period, the researchers noted.

Most of the bonus money went to physician groups that performed well, rather than those that improved the most. The authors suggest, however, that it is possible to reward both performance and improvement through carefully designed incentive programs that draw on evidence and best practices.

"Pay-for-performance has significant potential to improve the performance of the health care system, where reimbursement has historically failed to reward, and in some case penalized, high quality," said Rosenthal. She added that the goals of high quality and affordability could also be advanced through public reporting of quality and cost information, tiered benefit designs that encourage use of higher-quality and lower-cost providers and treatments, and disease management programs.

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