P4P in Health Care
PAYING FOR PERFORMANCE
In PUBLIC HEALTH:
Opportunities and Obstacles
Glen P. Mays, Ph.D., M.P.H.
Department of Health Policy and Administration
UAMS College of Public Health
Why Consider P4P in Public Health
Wide variation in the performance of
essential public health services
Persistent disparities in population health
outcomes
Gaps in adoption of evidence-based public
health interventions
Growing demands for accountability
Potential Effects of Incentives
Use of financial incentives to improve quality,
efficiency, productivity
Not a new concept, but new applications are
emerging post- managed care
Considerable experimentation by insurers,
purchasers, providers
Considerable variation in methods
– Target populations
– Performance measures and criteria
– Type and strength of incentives
P4P in Health Care
Inter-organizational
– Insurer contracts with hospitals & physicians
– Employer or government contracts with insurers
Intra-organizational
– Hospital compensation for employed physicians,
nurses, other health professionals
– Medical group compensation for individual
members
Potential Advantages of Incentives
Improvement effects
– Service quality
Align incentives of purchaser and provider
– Cost/efficiency
Promote accountability
– Service volume, output, productivity
Reduce need to monitor inputs/effort
Selection Effects
– Attract “better” providers, staff
– Attract a “better” patient population
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Potential Disadvantages of Incentives
Higher payments required to attract risk-averse
providers
Distortion of service mix away from activities not
measured, rewarded
Reinforcement of disparities between high and low
performing providers
Creation of stressful work environments that may
reduce job satisfaction, increase turn-over
Challenges in Design and Implementation
Finding valid, reliable, relevant measures
Data availability and quality
Securing buy-in of providers
Finding “new dollars” for sufficiently strong
incentives
Reducing opportunities for gaming
Design of Performance Incentives
Basing payments on health outcomes is
problematic:
– Exogenous & random variation in outcomes
– Noisy measures
– Attribution
Alternatives: base pay on processes or outputs
– Adherence to evidence-based practices
– Service volume
– Cost
Unique Challenges for Public Health
Limited availability of off-the-shelf measures
Inflexible, categorical funding streams
Public-sector purchasing, hiring,
compensation rules
Many areas of shared accountability
– Local and state agencies
– Public and private providers
– Individual and population health interventions
Time horizon for implementation and impact of
community-based interventions
Building Blocks for Public Health P4P
Building Blocks for Public Health P4P
Existing Performance Measurement Sets
– National PH Performance Standards
– State measurement sets
Existing Population Health Measures
– Vital records: mortality and birth outcomes
– Notifiable disease surveillance data
– Behavioral Risk Factor√ Surveillance System
9Available now
9Process measures
√
Self-assessed
Attribution and accountability issues
? Linkage to desired outcomes
9Available now
9Linkage to desired outcomes
Attribution and accountability issues
Time horizon
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Building Blocks for Public Health P4P
Incentive Design Issues
Measures of Guideline Adherence
– Guide to Community Preventive Services
– Guide to Clinical Preventive Services
– Tobacco Control Program Guidelines
Use of existing public health funding streams?
9Guidelines available now
Economic feasibility: do rewards to offset the cost
of improvement?
? Existing data on guideline adherence
9Linkage to desired outcomes
9Attribution and accountability issues
? Time horizon
Measurement Issues
Types of measures: structural, processes, outcomes
Risk adjusting performance measures for
community need?
Including population/community perceptions of
service?
Handling pass-through funding?
Reward quality targets or quality improvement?
Include incentives and penalties?
Getting from Here to There
Small scale demonstrations and pilots
Engage the practice community in design,
implementation, and evaluation
Use start-up strategies that reward
measurement and reporting
Phase in gradually to avoid large-scale shifts
in resources
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