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Health Plan Pay-for-Performance Strategies
Goal is to Reduce Costs and Improve Quality and Provider Efficiency
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While growing numbers of health plans are developing and implementing pay-for-performance programs for physicians and hospitals, there is substantial design variation in P4P programs within and across the markets, according to the study by HSC consulting researchers Sally Trude, Ph.D.; Melanie Au, M.P.P., of Mathematica Policy Research; and Jon B. Christianson, Ph.D., of the University of Minnesota. HSC is a nonpartisan policy research organization funded principally by The Robert Wood Johnson Foundation.
The American Journal of Managed Care article, titled "Health Plan Pay-for Performance Strategies," is based on HSCs 2005 site visits to 12 nationally representative communitiesBoston; Cleveland; Greenville, S.C.; Indianapolis; Lansing, Mich.; Little Rock, Ark.; Miami; northern New Jersey; Orange County, Calif.; Phoenix; Seattle; and Syracuse, N.Y. HSC has been tracking change in these markets for the past 10 years. The article is available here.
HSC Researchers interviewed executives at 35 health plans in the 12 communities about pay-for-performance programs, along with representatives of employers, large medical groups and hospital systems. The design variation in P4P programs reflects local conditions that include information technology capabilities, data availability, relative leverage of health plans and providers, willingness of providers to participate, and employer influence, according to the study. The concerns of providers include the administrative burden of health plans customized programs and the potential for conflicting financial incentives, the study found.
"The approaches for rewarding providers roughly fell into the following 3 categories: comparing performance with that of their peers, reaching absolute targets of performance, and demonstrating improvement over previous scores. A few health plans used a combination of approaches, with the first part of the incentive tied to performance relative to that of peers and the second part tied to improvement over previous scores," the article states.
Although providers would prefer health plans to use a single standardized set
of measures and methods, this is unlikely given local market environments, the
article concludes. A national effort directed at standardization might significantly
reduce the extent of customization but also may limit the opportunities for
local collaboration with providers.
The Center for Studying Health System Change is a nonpartisan policy research organization committed to providing objective and timely research on the nations changing health system to help inform policy makers and contribute to better health care policy. HSC, based in Washington, D.C., is funded principally by The Robert Wood Johnson Foundation and is affiliated with Mathematica Policy Research, Inc.