Presenter:

James Burgess

Authors:

James Burgess, Gary Young, Dan Berlowitz, Bert White, Mark Meterko, Barbara Bokhour, Errol Baker, Karen Sautter, Howard Beckman, Robert Greene, Kathleen Curtin

Chair: Richard C. Lindrooth; Discussant: TBA Tue June 6, 2006 13:45-15:15 Room 225

Many organizations around the world have begun designing and implementing pay-for-performance or pay-for-quality programs for physicians as a way of attempting to induce practice behavior changes in physicians and improve patient outcomes. Quality improvement also can be occurring for other reasons even if physician payment schemes do not account for quality of service. Difference-in-difference approaches using state and national controls can be used to discern the intervention impact from the trend. We employ a three year pre-intervention and three year post-intervention design measuring an array of adherence scores on diabetes care pathways (Hemoglobin A1C, Microalbumin urinalysis, LDL cholesterol, and Retinal eye exam) that led to financial payouts based on rank ordering of provider outcomes in a large Independent Practice Association (IPA) to accomplish this test of pay-for-performance plans. We review the theory and practice of incentive experiments in this area. In the current sparse literature on physician pay-for-performance, e.g. Rosenthal et al. (2005), careful distinctions between the incentive designs and intended effects have not always been clear. Measures with a fixed threshold of performance have quite different incentive for behavior change than rank ordering methods that are dependent upon relative improvement across all subjects. Physicians already above a threshold do not have to improve further to gain the incentive, so the focus is not so much on gain or improving quality as on paying the highest performing physicians more. While physicians improving nominal scores as other physicians improve by more can get paid less under a rank ordering system, but the incentive for improvement is clearer across the range of all providers. In addition, the patient panels for a chronic disease like diabetes can be quite small for some physicians, which may offer a large reward to a small amount of effort. Results indicate that adherence scores are increasing over time for all measures of diabetes care; however, only some of the measures exhibit a change attributable to the pay-for-performance intervention. We track individual physicians over the six year period and test effects of the size of the exposed diabetes panel and changes in the size of the panel over the period as well as the effect of personal characteristics of the physicians on the results.