This slideshow is about P4P model in health care and how it can transform the health care sector. It also talks about what is P4P it origin, budgeting methods, and how can it transform health care

1. Paying for Performance
(P4P) in Health Care
Dr Nishant Kumar
Assistant Professor
Department of Community Medicine
Madhubani Medical College , Madhubani , Bihar

2. Why did I chose this Topic
• Every Government want to ensure its citizen can get
affordable , accessible , quality health care are
affordable price
• Paying for performance (P4P) is one of the recent
and most powerful financial tool to modify the
health provider behavior
• Such Financial model provide us with unique
learning opportunity for us post graduates.
1

3. Content
1. Introduction
2. P4P Definition
3. Payment methods in Health care
4. P4P – Genesis
5. Theory behind P4P
6. P4P Design and components
7. Type of P4P
8. P4P Indian Scenario
9. Limitation of P4P
10. Conclusion
2

4. Introduction
Health system suffer from all types of deficiencies
and they include many form which include
1. Failure to implement evidence based clinical
practice
2. Fragmentation of Services
3. Slow and incomplete reaction to adverse
indication
4. Lack of attention to appropriate preventive
measure
3

5. Introduction (Contd.)
Publication of treatment
guidelines Promoting
Competition, Professional
Exhortation, Public Reporting of
Quality and Various forms of
Accreditation
Increase life expectancy
Increase Prevalence of
NCDs,
Poor Health System
4

6. P4P- Definition
•The adaptation of provider payment method to
include specific incentives and metrics explicitly to
promote the pursuit of quality and other health
system related performance of objectives.(European
observatory on health system and policies series-2014)
•A range of mechanism designed to enhance the
performance of health system through incentive –
based payment (World Bank -2008)
5

7. Payment in Health Care
FFS Capitation Salary
6

8. P4P Model for Health
care-Genesis
Year 1999
To Err Is Human :
Building Safer Health
Systems
Year 2001 :
Crossing the Quality
Chasm: A new health
system for the 21st
Century
7

9. Theory underlying
P4P
Principal Agent
8

10. P4P Design
Performance
Domains & Measure
Basis for Reward &
Penalty
Nature of Reward &
Penalty
Data Reporting &
Validation
9

11. Performance
Quality
Access to
Priority
Services
Efficiency
10

12. Defining Quality -
Donabedian Paradigm
Structure
• Facility, Equipment, Supplies,
IT , Human Resource
Process
• Practice
guidelines,
protocols
Outcome
• Mortality ,
Morbidity
11

13. Access to Priority
Services
Gaining Entry to
Health System
Accessing
Location
Finding Health
Care Provider to
Trust
Timeliness
Unmet Health
needs
Delay in
Receiving care
Financial
Burden 12

14. Efficiency
Productivity
Efficiency
Technical
Allocative
Frontier
13

15. Efficiency - “shared
saving”
Patient experience
or Satisfaction
Improved Equity
Other Performance
Domain
14

16. Basis for Reward & Penalty
• Target reached or not
• All or nothing approach
• Uncertainty
Absolute Measure
• Change in measure over time
• Has more appeal but is
complex to implement .
Improvement
• Greater effort among top
performers
• Exacerbate Inequalities
Relative Ranking
15

17. Calculation of achievement &
Risk Adjustment
Simple Transparent
Method
Complicated
Composite Measure
Addressing 'risk
selection'
16

18. Nature of Reward &
Penalty
Financial Non Financial
Size of
reward/Penalt
y
Recipient
Financial
Reward and
Non Financial
Incentives
17

19. Size of Incentive
Meaningful New Money
Redistributed
Blended
system
18

20. Payment to Institution or
Individuals
Health care is
a team work
May not reach
front line
worker
19

21. Non Financial Awards
Publicize provider
ranking based on
measure
Privacy of Health Data
20

22. Data reporting and
Validation
• Data availability is a key determinant of both the
design of P4P programmes and their ability to drive
performance improvement .
• Verification is a critical element in fiduciary
processes and discharge of financial responsibilities
in line with the contractual arrangement.
• Verification is an important opportunity for a two-
way dialogue between the purchaser and providers
about current performance, barriers to
improvement, and the joint efforts that may be
necessary to make performance improvement for
individual providers.
21

23. Varieties of P4P
Pay for Quality Pay for Reporting
Pay for Efficiency Pay for Value
22

24. P4P Indian Scenario
•Performance Related Incentive Schemes (PRIS) was
recommended by the 6th Pay commission for
central government employees over and above the
regular salary.
•PRI schemes are applied at the individual employee
level and at the team/group level.
23

25. PRIS Design
•Result Frame work Document (Performance domain)
•Calculation of Composite Score (Basis for reward )
•Payment of Incentive ( Nature of Reward )
(1+X )model
•Terms of Incentive
Maximum incentive
of 15% budget
saving
No incentive
if score less
than 70%
Formula set the
upper limit of
incentive
24

26. 25

27. Step 6: Performance Evaluation
The sixth and final step is taken at the end of the year, when we look at the achievements of the government department, compare them with th
targets, and determine the composite score. Table 2 provides an example from the health sector.
Table 2: Hypothetical Example from the Health sector
Step 1
Step
2
Step
3
Step 4 Step 5 Step 6
Target / Criteria Values
Excellent
Very
Good
Good Fair PoorObjective Weight Action
Criteria /
Success Indicators
Unit Weight
100% 90% 80% 70% 60%
Achievement
Raw
Score
Weighted
Raw
Score
1
% Increase in number
of primary health care
centers
% .50 30 25 20 10 5 15 75% 37.5%
2
% Increase in number
of people with access to
a primary health center
within 20 KMs
% .30 20 18 16 14 12 18 90% 27%
Better
Rural
Health
30%
Improve
Access
to
Primary
Health
Care
3
Number of hospitals
with ISO 9000
certification by
December 31, 2011
% .20 500 450 400 300 250 600 100% 20%
Composite Score =84.5%
26

28. PRIS design (contd.)
•Distribution of Incentive
Head of
Department
( Secretary)
Head of
Division( Joint
Secretary)
Other
a. Head of the Department (Secretary)
b. Head of the Division (Joint Secretary)
c. Others
7.1 Performance related Incentives for Head of the Department (Secretary)
The Secretary will get an incentive that is totally correlated with the performance of the
department under her /his management. As depicted in Table 3, in Phase 1 the HOD will get
a maximum of 20 % of his / her basic salary if the Composite Score at the end of the year is
100%. There will be no payment to the HOD if the value of the Composite Score is 70% or
less.
Table 3: Incentive Payment for the Head of the Department (Secretary)
Incentive Payment
(% of the Basic Salary)
Phase 1 Phase 2 Phase 3
Value of the
Composite Score
1-3 years 4-6 years 6-9 years
100% 20% 30% 40%
90% 10% 15% 20%
80 % 5% 10% 15%
70% 0% 0% 0% 27

29. PRIS design (contd.)
• Incentive for Divisional head ( Joint Secretary)
Guidelines for Performance-Related Incentive Scheme (PRIS) Page 8 of 12
l depend on two factors:
a. 30 % on Departmental performance as measured by the Composite Score for the
Departmental Performance Measurement System, and
b. 70 % on Divisional performance as measured by the Composite Score for the
Divisional Performance Measurement System.
e Weighted Composite Score will be calculated as follows:
Weighted
Composite
Score
Departmental
Composite
Score
Divisional
Composite
Score
= + .70 X.30 X
• Incentives to Other
The departmental composite score for other will be 5 –
15% .The lowest level employee it will be 5% .
• The total incentive for Divisional head & Other will
not exceed the stipulated percentage of basis pay.
28

30. depend on a similar payment schedule as the Heads of the Department (Secretaries). The
difference would be that the relevant composite score in the case of heads of divisions would
be based on the weighted score of departmental and individual performance. Table 4
summarizes the incentive payout for heads of divisions.
Table 4: Incentive Payment for the Head of the Division(Joint Secretary)
Incentive Payment
(% of the Basic Salary)
Phase 1 Phase 2 Phase 3
Value of the
Weighted
Composite Score
1-3 years 4-6 years 6-9 years
100% 20% 30% 40%
90% 10% 15% 20%
80% 5% 10% 15%
70% 0% 0% 0%
7.3 Performance Related Incentives for Others
Given the diversity of departments and their mandates, divisional heads will have the
flexibility to devise appropriate performance-related incentive keeping the following broad
guidelines in mind:
29

31. PRIS – Financing
Model
Planned Expenditure
Non planned Expenditure
Revenue expenditure Capital Expenditure
30

32. Trends of last
3 year non
plan
expenditure
(BE)
Revised BE
(RBE)
15% of
(BE-RBE) is
the fund for
PRIS
PRIS – Financing
Model (contd.)
31

33. Implementation of
PRIS
Voluntary
Basis
Preparation of
RFD for 2
years
RFD to be
approved by
HPC of GOI
Secretaries become
eligible only after
all employees are
enrolled
Incentive are
Approved by
HPC
32

34. Current Status of
PRIS
•Department of Space has implemented PRIS and
got incentive of ₹ 560.7 crores
•RFD has been prepared by various department
including MoHFW but only few states have shown
interest.
•Govt. Of Haryana carry out a formative
investigation before PRIS implementation
Regular
worker and
contract
worker salary
Disparities
Work Place
Grievances
Care Seeker
Behavior
Contd.
33

35. Confusion over
Incentives
Concern over
External Barrier
Concern over
unintended or
distorting effects
of Targets
Belief that health
outcome are
shared
responsibility
Result to Formative
Investigation
34

36. Limitations of P4P
Central
ASHA &ANMs
State
MO
District
Quality
35

37. Limitations
Lack of Valid , Reliable
and Important
Performance Indicators
Lack of Flexibility of
Performance
measure
Lack of Cost
Effectiveness
Unintended
Consequences
Provider
Behavior
36

38. Conclusion
•P4P is a powerful financial tool but is not a
panacea to improve health care.
•P4P is a general conceptual framework,
considerable experimentation and evaluation is
likely to continue for some time.
•The success or failure of P4P in particular
applications depends on how payers evaluate
performance and structure incentives. As is
often true, the devil is in the details.
37

39. Bibliography
• Casin C, Lyn YC, Peter S. Paying for Performance in helath care ,
Implication for Helath system Performance and accountability.
Berkshire: The European Observatory on Health Systems and
Policies, OECD; 2014.
• Cromwell J, Trisoloni MG, Pope GC. Pay for Performance in Health
care , Methods and Approchaes. New York: Research Triangle
Institute., RTI International; 2011.
• Gigli S, Wright J, Raj F, Agarwal M. Performance based Incentive to
strenghen Primary Helath care in Haryana State , India : Finding
from a Formative Investigation. New Delhi: Health finance and
Governance, USAID; 2015.
• Lagarde M, Wright M. Challenges of payment-for-performance in
health care and other public services – design, implementation and
evaluation. London: London School of Hygiene and Tropical
Medicine, Policy Innovation Research Unit; 2013. 38

40. “The price of inaction is far greater than
the cost of making a mistake”
Thank You