Intended and Spillover Effects of Pay-for-Performance on Quality of Care
- Presenter:
Chair: Richard C. Lindrooth; Discussant: TBA Tue June 6, 2006 13:45-15:15 Room 225
The number of health plans and purchasers in the United States that have adopted pay-for-performance mechanisms for quality improvement is growing rapidly. However, most of these programs are in the early stages of trial, evaluation, and adjustment. Although there is intense interest in and optimism about pay-for-performance programs among many policy makers and payers, there is little published research on pay-for-performance in health care. In fact, there are only a few studies demonstrating that pay-for-performance leads to improved quality of care.
We evaluated a natural experiment with pay-for-performance using administrative reports of physician group quality from a large health plan for an intervention group (California physician groups) and a contemporaneous comparison group (Pacific Northwest physician groups). Quality improvement reports were included from October 2001 through April 2004 issued to approximately 300 large physician organizations.
We examine the impact of the program on three targeted measures of clinical quality: cervical cancer screening, mammography, and hemoglobin A1c testing as well as a set of untargeted measures, including Chlamydia screening, appropriate asthma medication, and emergency room visits for asthma. Improvements in clinical quality scores were as follows: for cervical cancer screening, 5.3% for California vs 1.7% for Pacific Northwest; for mammography, 1.9% vs 0.2%; and for hemoglobin A1c, 2.1% vs 2.1%. Compared with physician groups in the Pacific Northwest, the California network demonstrated greater quality improvement after the pay-for-performance intervention only in cervical cancer screening (a 3.6% difference in improvement [P=.02]). In total, the plan awarded $3.4 million (27% of the amount set aside) in bonus payments between July 2003 and April 2004, the first year of the program. For all 3 measures, physician groups with baseline performance at or above the performance threshold for receipt of a bonus improved the least but garnered the largest share of the bonus payments. Patterns of improvement for untargeted measures were mixed, suggesting the existence of both positive and negative spillovers.
