2. Q
Quality is the
enabling frame that
begins, sustains
and grows any
health financing
_initiative.
3. Healthcare costs will continue to
be out of reach for many
Americans as long as patients
believe that "more care"
equals "better care.”
At least, that's the opinion of New York
Times economics columnist David
Leonhardt, who argues that more
knowledgeable patients and value-
based rewards are just two steps
toward righting healthcare's sinking
economic ship.
4. International studies in acute care hospitals
Date
No. of No. of adverse Adverse event
admissions
events
rate (%)
1984
30195
1133
3.8
1992
14179
2353
16.6
1992
1014
119
11.7
1998
1097
176
9.0
6. It is estimated that the following occur
every year in US hospitals due to errors in
treatment:
98,000
people are
injured with an
estimated
$ At a cost
% Only 2 to 3%
of major errors
are reported
12,000 deaths
of $33 billion
through
incident reporting
arising from
systems
these errors
Whittaker PPT
7. The US estimates that:
15.3% Cost to a hospital of One hospital pressure
appendectomies each ADE is $2,000 ulcer in average cost
were assessed as per event and about
was $37,288
unnecessary, $3.8M per hospital
(nationally a cost of
costing $740M per year
($1M preventable)
$2.2B to $3.6B)
annually
Flum and Koepsell
The UK estimates that:
Hospital acquired
infection cost Costs of ADEs 25% of
radiological
$1.6B a year
are £0.6B
procedures are not
(15-30% ($922M)
necessary
preventable)
Ovretveit J, 2009
8. Adverse 16.6%
15% of
10%
Events in of hospital
patients suffer
Errors are
Due to
of hospital
patients suffer
Health an adverse
event in
Patient
Handovers
an adverse
Care
Australia
(US study)
event
5-10% of
5 million
100,000
Unsafe
hospitalized
HAI cases are
cases of HAI
Surgery:
patients acquire
Estimated to
in the UK lead
234 million cases
HAI (up to
Occur in
to 5,000
globally/year;
7 million
37% in
Europe per
deaths
complications, and
HAI
ICUs)
HAI
year
HAI
a year
1 million deaths
About 100,000
1.5 million
hospital deaths
are harmed and 67%
in the US
thousands are of patients’
every year
killed in the US/ medication
are caused
year due to histories
by medical
RX medication
RX have errors
error
errors
Whittaker PPT
9. 3 step process that will NO!
ultimately lead patients to say
no to excessive treatments
more often:
3 Tweaking
2
the system so it
Arming each
rewards the
patient with
all of the facts about a quality of care rather
1
given treatment. This than the quantity of
Providing
sometimes results in care.
patients with
patients opting for a less
access to aggressive, less risky (and Leonhardt
less costly) course of
information
action.
about the most
effective
treatments.
10. KANO categories of QI
KANO Type 1
Improvements are reducing defects
KANO Type 2
Improvements are reductions of cost while
maintaining or improving the experience of
patients
KANO Type 3
Improvements are innovations or new things that
you can do that sometimes cost more money
11. What is Pay for Performance or “P4P”?
Pay-for-Performance (P4P) is “Transfer of money or
material goods conditional on taking a
measurable health related action or achieving a
predetermined performance target” *
Financial risk is the assumed driver of change
“No results, no payment”
*From the Center for Global Development Working Group on Performance-Based
Incentives
12. What is P4P?
P4P incentives are provisions in health
plan contracts that modify payment to
a physician group based on the
group’s performance on a measure
13. Pay-For-Performance Concept
Payers
(Donors, Government, NGOs, Health Programs,
Insurers, Communities)
Money
Goods
Results
Other rewards
Recipients
(Households, Service Providers [Facilities, Health
Workers], Health Programs, Local Government,
National Government)
14. Why Enthusiasm for P4P?
• Slow progress in improving quality
• Societal emphasis on market-based solutions
– Public release of performance data
– Increased patient cost-sharing
15. Increasing enthusiasm for P4P
• Private Health Plans
– Rapidly increasing use of P4P incentives
• Federal and State Governments
– Current discussions on introducing P4P into
Medicare reimbursement
16. What health systems problems is P4P addressing?
Strengthening capacity Improving quality
to provide services
• Catalyzes changes that • Preventive care services utilized
strengthen management.
by more people
• Improves information systems
and the use of information for • Rewards correct diagnosis and
decisions.
treatment
• Motivates health worker
Increasing utilization
Improving efficiency
• Overcoming financial and
physical barriers to access that
• Better use of inputs to achieve poor households face
health results
• Overcoming information and
cultural barriers that inhibit
utilization
Eichler et al on P4P
17. A “menu” of options to consider for "
supply side payment
• Sub-national level:
– Aligned with facility or population level targets
• Institution level:
– Frequency of performance payment
– Amount at risk
– Stepped
– Per service provided
– Adjustment for quality score
– Combination
Eichler et al. on P4P
18. Supply side payment options cont’d
• Payment tied to attainment of targets
– “all or nothing approach” – clear and fewer transaction costs
– Stepped– partial payments for partial attainment of targets; perceived as more
fair, but imposes increased transaction costs and weakens incentives to attain
full target
– Strength: Incentives linked to population based coverage, stimulates strategic
planning to address systemic issues.
– Weakness: More difficult to understand that fee for service.
• Per service provided (FFS)
– Fee for each service provided on a list. Fee may or may not cover the cost of
providing the service. Note: FFS is paid by purchaser (not equivalent to “user
fees” which are paid by patient).
– Strength: Increases production of services, Easy to understand… therefore
motivating, stimulates use of preventive services that are underutilized
– Weakness: Can generate excessive provision of services beyond what is
needed to ensure good health.
Eichler et al. on P4P
19. Supply side payment options cont’d
• Establish Thresholds or “Tournaments”
– Impose that only those that reach x% of population coverage receive
performance payments.
– Tournament- only those in the top x percentile of performance will
receive rewards.
– Challenges with these approaches: may reward those that are already
top performers and fail to motivate the weak performers to improve.
• Adjustment for quality
– E.g. ‘patient responsiveness’ measured by short exit survey
– Quality deflator based on facility assessment score
– Quality index
– Reward scores on clinical vignettes
– *** Innovations are needed to reward quality.
E ichler et al. on P4P
20. Supply side payment options cont’d
• Rules for how incentive payments can be used
– Specify portion for individual rewards vs. facility/
system investment
– Specify rules for how teams distribute facility
payments to individuals?
– Individual provider level: Salary plus? (or withhold
and “bonus”) Amount at risk?
Eichler et al. on P4P
21. Demand Side Payment Options
Payment for a series of
Payment for discrete health-related actions
health-related actions
taken by a household
• e.g. conditional cash transfer
• e.g. pay pregnant women who programs that provide income
deliver at health facility
support to families that receive a
package of health and other
interventions
Payment for long-term Payment for evidence
treatment of chronic of behavior change
conditions
• e.g. drug-free, quit smoking,
• e.g. patients are compensated lose weight
or provided food packages when • Payment conditional on results
they present to take medicines
of spot verification techniques
22. Implications for Policy (QIDS study)
• Accreditation and PHIC payments are shown to
be potentially powerful tools in either screening for
or for raising quality
– The positive relationship found between PHIC
accreditation and receipt of PHIC payments to
facility and physician quality already suggest the
expected power of such regulatory instruments
These tools work in two ways:
(1) accreditation and payment regulations screen out lower
quality docs; and
(2) In a dynamic setting, accreditation and payments can be
used to raise quality of care as in the use of multi-tiered
accreditation and quality bonuses
Peabody et al. on QIDS Study
23. Paying for results
Financing incentives be used only
when there is strong evidence of
effectiveness and specific outcomes
can be articulated
Remove financial barriers to improve
care: reinforce positive performance
through additional payments or
removing payment mechanisms
McLoughlin, QSHC 2003
24. Common Mistakes in P4P Design
• Failure to consult with stakeholders to gain input to design, maximize
support, and minimize resistance
• Failure to adequately explain rules (or rules that are too complex)
• Too much or too little financial risk
• Fuzzy definition of performance indicators and targets, too many
performance indicators, and targets, and targets for improvement that are
unreachable
• Tying the hands of managers so that they are not able to fully respond to
the new incentives
• Insufficient attention to the systems and capacities needed to administer
programs
• Failure to monitor unintended consequences, evaluate, learn, and revise
Eichler et al on P4P
25. Possible pitfalls
• Excessive attention to reaching targets, to detriment of
other (harder to measure) types of performance
• Undermining intrinsic motivation, turning health care
delivery into “piecework”
• “Gaming,” including erosion in quality of institutions’
service statistics
26. Key points to ponder
• There are significant problems with the quality of health
care
• This is reflected in the perceptions of stakeholders, in
unintentional harm to patients, overuse of ineffective care
and underuse of effective interventions
• Poor quality generates additional costs, yet current
financing arrangements may actually impede
improvements
• Financing issues are usually debated in terms of the level
and method of funding without clarity about what needs to
be achieved to address quality of care
• Achieving improvements requires attention to stable
investments
28. Slides adapted from:
• Eichler and Levine. November 17, 2008. Pay for Performance:
Changing Incentives to Achieve Results Presented at World Bank
Conference on Impact Evaluation, Nov. 17, 2008.
• Eichler, Rena and Susna De. December 2008. Paying for
Performance in Health: A Guide to Developing the Blueprint.
Bethesda, MD: Health Systems 20/20, Abt Associates Inc.
• McNamara, Peggy. May 2005. Quality-based payment: six case
examples. Intl Journal for Quality in Health Care
• McLoughlin and Leatherman. April 2010. Qual. Saf. Health Care