January 28, 2002
PHYSICIANS TO IMPROVE QUALITY OF CHRONIC CARE? WHAT A CONCEPT!!
Did you see the headline last week --
"Six California Health Plans Formally Announce Quality Initiative"?
Eight million people are served by
these six plans--Aetna, Blue Cross of California, Blue Shield of
California, CIGNA Healthcare of California, Health Net, and
PacifiCare. They have agreed to develop a common scorecard of
quality measures and to pay physicians for achieving better scores.
Is the California initiative of Pay for Performance-Quality (PFP-Quality)
a trend? Our commentary discusses four main points:
1) The PFP-Quality trend is here to
2) PFP-Quality is not the same as PFP-Cost.
3) There are challenges to creating the right scorecard for PFP-Quality.
4) PFP-Quality for chronic care is a great idea.
1) THE PFP-QUALITY
TREND IS HERE TO STAY.
The Institute of Medicine's (IOMs)
"Crossing the Quality Chasm" report outlines PRINCIPLES for
payment policies to reward quality:
Provide fair payment for good clinical management.
Provide...an opportunity for providers to share in the benefits
of quality improvement.
Provide...the opportunity for consumers and purchasers to
recognize quality differences in health care and direct their
financial incentives...based on best practices and the
achievement of better patient outcomes.
fragmentation of care.
The IOM's prescriptions are
increasingly becoming recognized as THE BLUEPRINT for the American
health care system. PFP-Quality is a significant trend, not just a
blip on the radar screen.
IS NOT THE SAME AS PFP-COST.
Providing financial incentives to
physicians is not a new idea. However, over the past decade most of
the experiments with physician financial incentives have focused on
pay for performance to reduce costs (PFP-Cost), rather than to
improve quality (PFP-Quality). This difference is a profound shift.
PFP-Cost goes against the grain of most physicians. It raises the
ethical and political landmine of denying needed care.
A study cited in the Archives of Internal Medicine found that
only 17% of physicians believed that financial incentives to limit
services are ethically acceptable. It might be easier to convince
doctors that Osama Bin Laden is just a guy with a naughty streak.
3) THERE ARE
CHALLENGES TO CREATING THE RIGHT SCORECARD FOR PFP-QUALITY.
The California Pay for Performance
system will utilize a common scorecard for the physician groups,
representing a balance of prevention, chronic care management, and
patient satisfaction measures. At least initially, the scorecard
will NOT focus on clinical outcome measures.
If applied independently, each of
these scorecard measures has major drawbacks:
PREVENTION. A major challenge with
rewarding prevention is that it tends to have primarily long-term
benefits. The reality is that reducing cost in medical care remains
a significant priority. Most preventive services provide benefits
that are many years away.
Do the math. The typical health plan
has about 18% membership turnover each year. So, if your health plan
has 1,000 members today, at the end of 1 year only 820 of those
original members will still be with you. At the end of 10 years,
only 168 of the original members remain, and at the end of 15 years
only 62 of your 1,000 original members are still around.
Even the most rampant of do-gooders
will have to admit that the economics of prevention are weak (under
the current system).
Are there exceptions? Yes. For
example, flu shots are one of a few preventive services documented
to have a short-term economic payback. The $5 spent by an employer
or health plan on a flu shot predictably will prevent a significant
percentage of people from missing 5 days of work THIS YEAR (not 10
or 15 years from now). The math works here, but not for many
PATIENT SATISFACTION. The problem
with rewarding patient satisfaction is that it isn't necessarily
linked to clinical quality. Consider two situations: 1) Incompetent
clinician, great bedside manner, and 2) great clinician, lousy
bedside manner. Who will get the higher patient satisfaction scores?
Medical care is a unique challenge
for consumers --perceived quality (satisfaction) and actual quality
don't necessarily go hand in hand.
CLINICAL OUTCOMES. The challenge with
rewarding improvement in clinical outcomes is that we haven't agreed
yet on WHAT to measure and HOW to measure it.
In theory, measuring improvement in
clinical outcomes is the obvious and best place to focus. In
practice, however, this is not an easy place to start...it's like
learning to swim in the deep end of the pool.
Two examples of multi-year attempts
to measure clinical outcomes point out the methodological and
political challenges. The first example is the multitude of studies
examining mortality rates for open heart surgery (i.e., % of
patients who die after surgery). Even after studying and refining
this measure for a decade, researchers are still receiving
criticisms--"It's the wrong thing to measure....your data is
invalid....my patients are sicker than your patients".
A second example--developing clinical
guidelines for back surgery. The Agency for Health Care Policy and
Research (AHCPR) took on this task in the mid 1990s, only to run
into multiple political buzz saws. While the effort was aimed at
improving quality, it raised the specter of reducing surgeries and
of pitting physician against physician. This noble, but politically
unwise, effort almost cost the agency its access to federal funding
and its life.
AHCPR has been reincarnated into the
Agency for Healthcare Research and Quality (AHRQ), and has refocused
on primarily developing quality measures and guidelines.
The bottom line issue with metrics
for clinical outcomes is one of timing. There are a number of
initiatives under way developing standardized metrics for measuring
clinical outcomes (for example, see the IOM's
National Health Care Quality Report".
In the long run, it makes great sense
to incentivize improved outcomes....but only after we figure out
WHAT to measure and HOW to measure it, and we ensure that needed
cultural changes have begun.
FOR CHRONIC CARE IS A GREAT IDEA.
Is focusing payment incentives for
quality on chronic conditions a good idea? YES!!
Chronic care is becoming increasingly
important. According to the
National Health Care
Purchasing Institute (a Robert Wood Johnson Foundation
Initiative), "It seems natural to apply incentives to improve the
quality of care provided to patients with chronic conditions. Why?
Chronic conditions are prevalent, expensive, and the number of
people afflicted by them is increasing. Chronic conditions are now
the leading cause of illness, disability, and death in the United
Just to be fair, there also are challenges associated with financial
incentives for chronic care. These challenges include: improvements
in chronic care depend on a wider local care system, with physicians
being only one player in that system; many of today's chronic care
scorecard measures focus primarily on process (e.g., HEDIS
measures), rather than patient outcomes; factors beyond the scope of
a physician's influence affect chronic care, e.g., patient
lifestyle, patient adherence to treatment, etc.
However, rewarding improvements in
chronic care doesn't have many of the drawbacks noted above:
PFP-Cost, it doesn't raise the specter of denying care.
prevention, there are many (not all) cases in which improving
chronic care will have short-term economic benefits.
patient satisfaction, chronic care improvement does have a high
correlation with clinical improvement. The evidence to date from
disease management programs shows both extremely high levels of
patient satisfaction AND real clinical improvements.
clinical outcomes, chronic care measures are "relatively"
focused and "relatively" advanced. (The " " around relatively
acknowledges that we still have a long way to go here.)
What a concept--paying physicians to
improve performance! Makes perfect sense.
"The Growing Case for
Using Physician Incentives to Improve Health Care Quality"
National Health Care Purchasing Institute, December 2001
Incentives in HMOs"
National Bureau of Economic Research, October 2001
to see in pdf format
Likely to Face Quality Incentives than Incentives That May Restrain
Center for Studying Health System Change, January 2002
CONFERENCE -- THE
HEALTHCARE OUTSOURCING CONGRESS
The Center for Business Innovation (TCBI)
THE HEALTHCARE OUTSOURCING CONGRESS
March 7-8, 2002, Hyatt Regency New Orleans, New Orleans, LA
The Premier Conference & Exhibition
For Leaders and Key Decision-Makers From Hospitals, Health Systems,
Physician Groups and Managed Care Organizations. For additional
information click here.
As an E-CareManagement News
subscriber, you are entitled to $300 off the applicable registration
fee (this discount cannot be combined with any other discounts).
Please register by phone only (310-541-5932) to receive this special
low rate and mention keycode BHT.
PERSPECTIVES ON EVIDENCE BASED MEDICINE
"Lynn Payer's Medicine & Culture Revisited"
Harris Interactive; Volume 1, Issue 34--December 20, 2001
This essay is a tribute to recently
deceased author Lynn Payer, whose book "Medicine and Culture"
compares and contrasts the practice of medicine in the U.S.A.,
Britain, Germany and France.
"The big picture which emerges from
Medicine & Culture is that doctors in the four countries practice
medicine very differently because their national culture, history
and medical training are fundamentally different."
HEALTHCARE FOUNDATION SPONSORS NEW E-HEALTH REPORTS
by First Consulting Group for the California HealthCare Foundation,
So far e-disease management is delivered in four operational models:
1) Patient self-directed
2) Patient support with electronic linkage to the case manager
3) Patient support with electronic linkage to the patient's
4) Clinician practice site
Recommended starting points include:
first on the disease management program--patients and their
needs as well as its organizational structure--and then on the
the program with physicians in the lead and active participants
in the design.
e-disease management as a way to support the patient-physician
e-disease management as a serious project that needs assigned
accountability and staff resources.
sure to add value for physicians and their patients....
by First Consulting Group for the California HealthCare Foundation,
This report defines Web-based communications in health care and
examines the value, operational models, technology, and attitudes of
clinicians and patients. It also reviews implementation, case
examples, best practices, and legal and regulatory issues.
health plan contracting regains momentum"
Employee Benefit News, January 2002
Another trend revived from the 80s -- providers (hospitals and
doctors) contracting directly with employers for health care
Will this trend evolve to include
employers contracting with providers for disease management
services? Stay tuned.
KEYS TO IMPROVED
DIABETES CARE: INTENSIVE THERAPY, TEAM APPROACH
"Improving Care for Diabetes Patients Through Intensive Therapy and
a Team Approach"
Agency for Healthcare Research and Quality (AHRQ), November 2001
Providers can help patients achieve good glycemic control and
postpone major complications of the disease through a combination of
intensive drug therapy and a team approach to care.
US BANCORP PIPER
"Health Care Information Technology Market Update: 2002 and Beyond:
It's Still a Clinical World"
US Bancorp Piper Jaffray, December 2001
"We believe that the industry response to these changes (reducing
medical errors and improving clinical quality) has been epitomized
by the adoption of clinical and workflow IT solutions. By acquiring
these solutions and adopting the corresponding changes in workflow
and productivity management, the industry, especially major
hospitals in the United States, has shown its desire to reduce
costs, improve profitability, and save patients' lives."
"Rx Health Care: Pharmacy Benefit Managers"
US Bancorp Piper Jaffray, December 2001
Most PBMs have several core business lines. Drug card (retail) and
mail order are the original business lines that built the industry.
Disease management, specialty distribution, and other segments are
newer, less easily commoditized, and more profitable.
Adjustment for Asthma: Variations by Methodology and Implications
Center for Healthcare Strategies, December 2001
MANAGEMENT--GENOMICS AND GENETICS
"A Revolution in R&D: How Genomics and Genetics are Transforming the
Boston Consulting Group, November 2001
Disclosure -- No clients were
mentioned this issue.
E-CareManagement News is an
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