Bridges to Excellence and Payfor-Performance from the Pay-ee
Perspective
February 3, 2005
Thomas H. Lee, MD
Key Bridges Themes
• Error reduction as approach to quality
improvement
• Delayering – reduce costs by cutting out the
middle-man whose function is to detect errors
• Encourage MDs to get it right the first time by
adopting systems that reduce errors
• Accelerate adoption of systems (that is, transform
the marketplace) as well as move market share
• Share savings
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The Optimistic Long View
High
Chasm Crossing
Value of
Health
Benefits
Consumerism
& P4P
Performance
Disclosure
Performance
comparisons
for hospitals,
MDs & Tx
Ï Market
sensitivity to
hospital/MD
quality & cost
2002
50 ppts
$
40 ppts
Clinical reengineering by
MDs, hospitals
& suppliers
Q = compliance with guidelines
$=
Low
Q
annual health benefits cost
Key Evolutionary Steps
2012
Reproduced with permission of Arnold Milstein, MD (Mercer)
A Three Component Strategy for
Making the Healthcare System Work
1. Pay for performance contracting
2. Products with transparency to consumer
re: costs/quality
3. “Build a Prius” initiatives
Bridges to Excellence resonates with our efforts to
help our practices re-engineer their care, thereby
enabling us to improve performance and achieve our
contractual goals.
2
Why Partners Really Wants Pay
for Performance to Work
• Critical mass of patients -- and incentive dollars
• If P4P doesn’t work, alternatives are ugly:
– More consumer-oriented products (with more
“collateral damage” than P4P)
– Swing back to capitation
– “Police state medical management” (1-800-…)
– Cost reduction through fee/rate reduction
• P4P can fail if we providers are not effective
• P4P can also fail if targets do not produce value
Success Requires Two Revolutions…
(But Revolutions are Hard on People Living Through Them)
• Industrial revolution
– Adoption of electronic and other tools to
improve the reliability of care by reducing
errors of under-use/over-use/mis-use
• Cultural revolution
– Physicians evolving to understanding that they
are (very important) part of overall system and
(key) members of teams -- and that the focus is
caring for populations of patients over time.
3
Provider Reactions to Bridges
• Agree that the criteria are “things we ought
to do” – but hard to do
• Complain that application process is costly
and time-consuming
• Complain that the rewards are not big
enough to cover costs of systems
• Skeptical that movement of market share
will be effective incentive
Why Small Incentives Work:
Lessons from Prospect Theory
• Awarded Nobel Prize for Economics in 2002
• Explains what was previously considered
economically irrational behavior
• More perceived value ascribed to
– Losses (compared to gains)
• MDs dislike risk of a $100 loss more than they like potential
for a $10 gain
– Percent difference (than actual dollar value)
• People will drive two miles to save $1 on gallon of milk, but
not to save $1 on television set
4
Correlation between perceived loss or
gain and actual loss or gain
Prospect Theory
Perceived Gains
Losses
Gains
Perceived Losses
Prospect Theory, Kahneman and Tversky, Econometria 1979
Conclusion
• Bridges to Excellence was initially greeted
with suspicion by providers and insurers in
Boston marketplace
• But components of Bridges has strongly
influenced content of P4P contracts
• Now Bridges is seen as one of several
forces encouraging providers to adopt
systems likely to reduce errors
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