Aligning incentives: The promise of pay for performance
New technology that enables providers to access payer data can make it easier to practice evidence-based medicine
This article was originally published on HHN Most Wired
Health care economics experts are telling us what other industries' quality pundits have long known: Higher quality lowers costs. The experts say that if evidence-based care was consistently practiced by clinicians, 30 percent to 40 percent of U.S. medical costs could be avoided, and the quality of care would improve at the same time. The potential savings to our health and economy are colossal: With annual health care expenditures now topping $1.8 trillion, the savings from evidence-based care would be nearly $500 billion per year.
But if our existing health care system pays all professionals the same, is it any wonder that patients receive evidence-based care only slightly more than half the time? Even worse, hospitals and clinicians who do the "right things" to improve patient health, quality of care and outcomes—such as ordering screening tests, tightly controlling blood glucose levels, or ensuring adherence to aspirin for heart attack survivors or ACE inhibitors to patients with heart failure—often end up getting paid less than those who don't. These evidence-based practices require business and clinical processes that are either not reimbursable or are reimbursed at a much lower rate in contrast to procedures that may be of minimal or even negative value to quality and outcomes.
Rewarding the right things
Government and commercial payers hope to change this with pay for performance: metric-based programs that pay hospitals and physicians differentially based on quality and efficiency targets. By introducing incentives and meaningful payments to providers for using proven methods to improve health, quality of care, and outcomes, U.S. payers hope to correct shortcomings in safety, quality, and efficiency.
In recognition of the importance of patients' health habits and decisions to adhere to or ignore evidence-based treatments, some payers are extending pay for performance to patients by introducing incentives and rewards for healthy behaviors. These pay-for-performance plans reward patients with programs, points, miles, music, gift cards, and kudos for everything from completing a health risk assessment form to engaging in regular exercise to lowering their weight, blood pressure, and cholesterol.
Under provider and consumer pay-for-performance programs, the incentives of payers, clinicians, and consumers are becoming aligned to improve the health of individuals and populations rather than improving proprietary claim reimbursement rules, adjudication processes, and collections.
Beyond incentives
Once health care stakeholders have collectively identified common incentives, enabling technologies are needed to amplify the collaborative efforts of clinicians, providers and public health agencies in promoting improved health and evidence-based practice.
Actionable information and effortless collaboration and workflow technologies that cross organizational boundaries are needed to support collaborative decision-making by providers, plans and consumers. Technology can drive success by enabling virtual team communications and workflow, coordination of care across multiple settings, and enabling the delivery of information to stakeholders in the context of their daily lives and workflow. Besides the quality and cost improvements of evidence-based care, online collaboration tools could also enable yield untapped benefits in administrative cost savings long before regional health information organizations go live. The reason: Today, nearly every collaborative administrative and clinical transaction between and among providers and health plans still occurs over the most costly channels: phone, in person, U.S. mail or fax. Health care has yet to realize the simple network benefits that other industries already enjoy.
In their own respective silos, both providers and health plans hold critical patient information that can benefit the other. For example, providers own deep clinical data about patient encounters and conditions. On the other side, health plans' financial, claims, risk and pharmacy data is the most comprehensive source of patient information because it includes data from multiple providers and facilities. Although most health plans claim to provide access to this patient information through self-service portals, what providers need is actionable information delivered to them in the context of their existing workflow to support collaborative care and disease management.
With new technologies that can unlock proprietary data stores, health plans are well positioned to transform their data silos into usable information and make it effortlessly available to providers. Rather than expecting providers to log on to a Web site for every payer with which they contract, payers can electronically deliver this data to providers to enable them to achieve pay-for-performance goals. Summary health records, alerts, surveillance tests due, med non-compliance alerts, multiple prescriber alerts, health risk assessments, and prescription histories can easily be automatically delivered and silently updated whenever new information becomes available.
Standardized pay-for-performance reports and dashboards can facilitate incentive support by making it easier for providers to forecast compensation and understand how they are faring against performance measures and their peers. Reports could include options for providers to engage in online dialogue with health plans to establish collaborative feedback to ensure success. The same software could host online educational Web conferences to help physicians improve their effectiveness in managing chronic diseases under pay for performance.
Once the incentives of providers, plans, and consumers are aligned and the technology is in place to promote collaborative and evidence-based care across multiple settings, patients will consistently receive high-quality treatment. This will move health care a quantum leap closer to an exemplary system that delivers on the promise of affordable personal and population health. Health plans, in cooperation with providers, have a unique window of opportunity to lead collaborative pay-for-performance efforts and deploy low-cost, scalable technologies to bridge the multiple points of failure and collaboration gaps in our fragmented care delivery system. And both will reap the benefits of improved quality, safety, outcomes, and breakthrough savings in medical costs.
 | Dennis Schmuland, M.D., director, Microsoft U.S. Healthcare & Life Sciences Health Plan Industry Management, is a board-certified family physician and fellow of the AmericanAcademy of Family Physicians. |
