Poll finds physicians very wary of pay-for-performance programs.

Some physicians call them scams. Others see them as the only way to motivate doctors to improve the quality of patient care.

But a large number of physician leaders aren't exactly sure what to make of the growing number of pay-for-performance programs rocking U.S. health care. The often-controversial programs pay bonus money to hospitals, clinics and individual physicians that meet certain benchmarks for patient care and outcomes.

A new national poll by the American College of Physician Executives found that nearly 40 percent of the 932 physician executives who completed the poll are already participating in some sort of pay-for-performance program.

Of the 53 percent who aren't yet involved in pay for performance (or P4P, as it's known), nearly 60 percent are considering it.

As one poll respondent put it, pay-for-performance programs "are an inevitable rising tsunami that will overtake us."

"It is embarrassing to have to be paid to improve quality ... our industry has been lax," another wrote.

And a critic put it bluntly: Pay-for-performance programs "are the most recent scam to be perpetrated on physicians. Agree to them at your own peril. All physicians will regret their participation in any such program."

The physicians who are participating in pay for performance heartily agree (75 percent) that the programs reward physicians who meet performance goals, and a good many (60 percent) also say the programs incentivize physicians to improve quality.

But when it comes to reducing medical mistakes, fewer P4P participants (38 percent) believe the programs are making a difference.

And some feel that pay for performance does have negative effects, as well, such as causing rifts among physicians who achieve performance goals and those who don't (18 percent) and demoralizing physicians who fail to meet the goals (17 percent).

Generally speaking, however, nearly 60 percent of physician executives who responded to the poll feel that P4P is here to stay. Only 18 percent think it's a fad.

"I think pay for performance is necessary to provide legitimate incentives for physician retention while at the same time aligning quality initiatives," one poll respondent wrote.

"Measurement often leads to amazingly better management," wrote another. "P4P is a great start."

Question of fairness

Nevertheless, physician leaders are skeptical about pay for performance; they aren't convinced it's fair.

About 57 percent of the poll respondents said it's too early to tell if pay-for-performance programs are fair or unfair for the way they dole out rewards for quality care.

This wariness was even more evident in the 292 comments that the respondents posted about pay for performance--some lengthy diatribes about the problems with P4P and others heaping praise on the programs for getting physicians to follow standard treatment protocols.

"Putting a significant amount of reimbursement at risk seems to be really the only way to get most physicians' attention regarding improving outcomes, improving patient satisfaction and complying with accepted guidelines," one respondent wrote.

Another replied, "Any incentive system can be 'gamed,' so it will be difficult to tell if these programs are effective until they are in place for some time."

"The devil is in the details," one respondent added. "How is the plan structured? What performance measures are being measured? Is the 'default' performance measure financially based? All of these issues need to be resolved for any plan to be accepted as a 'valid' attempt to reward quality, not just another excuse to ratchet down physicians' incomes."

One respondent worried about the equity of an existing pay-for-performance program.

"I think this (P4P) could be a Pandora's box. I could see physicians spending more time making sure they are meeting certain guidelines rather than treating patients. The same may be true for hospitals if the criteria and measurement of performance are not real and significant.

"We recently lost out on a (Blue Cross Blue Shield) bonus for pneumonia care when just a few cases in an incredibly busy March had slight delays in initiating antibiotics. If bonuses go to only those hospitals with superior staffing, we will have a situation where the rich may get richer and those institutions with economic and staffing challenges may fall further behind."

Another noted that with so many P4P programs cropping up around the country, there are good apples and bad.

"There is a plethora of these programs. Some are fair; others are not. Some programs are based on productivity regardless of quality of care (morbidity) or patient satisfaction. These programs put on the pressure of financial penalities if a certain goal is not achieved. Other programs raise the productivity goal every year which really frustrates many clinicians."

Many also questioned the data used to rate physician performance.

"The criteria that are being used in P4P are flawed. They are claims data that can be easily obtained by the insurance companies, but may not have clinical significance. The physicians need to be able to adjust the data on a case-by-case basis but this will never be allowed because it is too complex. This will cause physicians to do things just to be paid, not because they benefit the patient."

"They need to not be based on claims data which is incomplete, and need to be able to assess decision-making documentation for those situations in which physicians choose not to follow a guideline for good reasons and document why," another respondent wrote. "I've not seen any programs that do this--and these physicians are the very ones that we ought to be rewarding for thinking carefully about what they do, as well as documenting those reasons. This at the foundation of quality medicine."

And another respondent added, "The system we currently operate under is based on claims ... data and we have found serious errors in the reporting of data and it has had serious impact on our reimbursement, and unfortunately, (some) of the patients who the insurers claim have certain medical conditions ... in fact don't have these conditions. We are now fighting with the payer and our patients to get their medical record cleared of erroneous medical conditions."

Cherry picking and computers

One of the most alarming concerns about pay for performance is that doctors will avoid or dump the sickest patients in order to improve overall scores.

"There will be a dumping of non-compliant or difficult patients in order to have physicians' performances appear good," one respondent stated.

"Pay for performance in our clinic has the risk of docs working in tandem cherry picking the higher reimbursable charts. Trying to account for patient volume and charges is more cumbersome. We are probably going to continue to use multiple metrics to support annual increases."

Another respondent wonders how P4P works with chronic illnesses.

"Pay for performance sounds desirable but implementation will probably be unfair. For example, it is clear for short-term procedures, such as a surgical procedure. How does that compare in paying for performance in caring for a child with cerebral palsy, or any other chronic health condition of which we have more and more? It would be unwise for a physician to dedicate him/herself to such patients."

Computerization also plays a part in the pay-for-performance controversy. Some poll participants say P4P is just a convenient way to get physicians and health care organizations to adopt better technology.

"These programs will move adoption of EMRs forward, and that will improve the standard of care as the programs get better at identifying quality issues for the doctor to address. Unfortunately, the costs of incorporating an EMR are still prohibitive for the small practice, and it would be problematic if reimbursement to those physicians started to fall due to failure to comply with pay-for-performance standards."

"The IT infrastructure needed to properly collect and report data is making it difficult for physicians who are not part of big IPAs or physician groups to demonstrate outcomes," another respondent added. "Therefore, the results make it look like the big medical groups are doing better. These big groups are getting the money. The small IPA, solo physicians and/or small groups need this money to modernize their systems."

Another wrote: "If all physicians had robust computerized systems that could 'talk' to each other, then physicians and the patients would be in charge of quality. (Not payers; not hospitals) Present pay-for-performance efforts distract docs from the meaningful investment.... The (federal government) could encourage this by making the EHR companies solve compatability issues."

And one poll-taker says it's about time doctors hit the keyboards. Pay for performance "may finally propel medicine to catch up with the vast majority of other industries in computerization. The fact that most physicians are still using pen and paper is dumbfounding in the 21st century."

California model?

California--where pay for performance is well-established--drew comments from several poll respondents.

"P4P in California is a well-designed program that elicited input from employers, health plans, and physician organizations prior to implementation. It rewards groups based on quality, service, and information technology measures. It has helped create a stronger business case for quality, and has promoted accountability for health care outcomes."

Another physician executive agreed. "In California the P4P program is working very well with significant improvement in outcomes."

But others aren't convinced that California should be the model for others.

"In California there is an unfair advantage held by sophisticated, well-funded medical groups. As we move to administrative data only for paid incentives, groups unable to collect this information electronically will be disenfranchised," one respondent stated.

Another pointed out disparities. "In California, I perceive bias depending on what socio-economic community the group serves. I have become aware of a North-South differential in HMO capitation which favors Northern California groups which can offer open access to specialty care, generally a patient satisfier."

"It's all about the money," another stated. "P4P will die when the money dries up. In California, the P4P metrics are changing faster than the health care system can follow--and this year a cost-based metric (hospitalization rates) is to be added. This is the future of P4P: the employer coalitions driving this thought quality would bring down costs--since it is not, they are shifting to cost-reduction incentives. That is the future."

No new money

One of the biggest complaints about the current state of pay for performance is that most bonus money isn't new money. P4P typically redistributes existing funds.

"These generally are a smoke screen to hide overall reductions in reimbursements. Few actually put new money on the table," one respondent complained.

"It is unfortunate that most of them seem to be set up as a 'zero-sum game,' with winners and losers," another lamented.

Nevertheless, many respondents stated that pay for performance is at least a step in the right direction.

"If they are concise, agreed upon by both parties, verifiable by both parties, (pay-for-performance programs) can be effective. We have had such a relationship with a few payers. It has been profitable to both as we have shown them we save them money by practicing cost effective, good medicine.

And one stated, "We have historically tolerated wide variations in practice under the guise of 'the art of medicine.' As our knowledge base increases, it has become obvious that there ARE best ways to practice, yielding superior patient outcomes often with more efficient use of scarce medical resources. It only makes sense to reward those physicians who make the efforts to keep up with best practices and to encourage those who haven't to 'get with it!'"

And finally

In the end, it's clear that P4P is not a panacea for the quality problems that continue to plague health care. As one respondent angrily pointed out, improving quality isn't just the responsibility of physicians; it's the patients' responsibility, too.

"Why not have the patients pay the physicians FULL FEE and then reimburse them based on THEIR performance? If they lead healthier lifestyles (lose weight, exercise, etc.) or follow the advice of their physician (take their medication so they keep BP, cholesterol, blood sugar, etc. under control) they get reimbursed more money. This would provide an economic motivation for them to stay/be healthy. Eventually they will be healthier (at least theoretically) and would use less health care resources."

Bill Steiger is editor of The Physician Executive. He can be reached at 800-562-8088 or [e-mail]

RELATED ARTICLE: Details of the ACPE Pay-for-Performance Poll

* Dates: 8/22/05-9/29/05

* Sent to: 7,444 ACPE members (physician executives)

* Total respondents: 932

* Response rate: 12.5%

Titles of poll respondents

CEO, Administrator, President, Commander, Dean or     10%
similar
VPMA, COO, CMO, CIO, CQO, Chief of Staff, Vice        29.2%
Commander, Assoc Dean, or similar
Medical Director of a Hospital or Group Practice      20.9%
Clinical Department Chair, Chief of Service, Medical  20.3%
Director of Clinical Department, Residency Director,
Professor of Medicine or similar
ALL Other Positions including Practicing Physician,   19.7%
Consultant and Resident/Fellow

Types of organizations:

Hospital                   33.6%
Group practice             30.3%
Managed care organization  11.2%
Academic                    6.7%
Military/Government         4.9%
Other                      13.3%

Does your health care organization currently participate in a pay-for-
performance program?

                          Response %  Response Total

Yes                       39.6%       368
No                        53.3%       495
Don't know                 4.5%        42
Not applicable             2.6%        24

Total Respondents                     929
(skipped this question)                 3

[c]ACPE 2005 Pay-For-Performance Survey

Even though you are not currently participating in a pay-for-performance
prorgam, is it something you are considering?

                          Response %  Response Total

Yes                       57.5%       281
No                        29.2%       143
Don't know                13.3%        65

Total Respondents                     489
(skipped this question)               443

[c]ACPE 2005 Pay-For-Performance Survey

How long has your health care organization been involved with a pay-for-
performance program?

                          Response %  Response Total

Less than 1 year          21%          79
1-2 years                 34.6%       130
2-3 years                 17.6%        66
3-4 years                  8.8%        33
More than 5 years         18.1%        68

Total Respondents                     376
(skipped this question)               556

[c]ACPE 2005 Pay-For-Performance Survey

Do you believe the pay-for-performance program is:

                                              Response %  Response Total

Reducing medical errors & improving quality   37.8%       131
Incentivizing physicians to improve quality   60.2%       209
Rewarding physicians who meet                 75.2%       261
performance goals
Demoralizing physicians who fail to meet      16.7%        58
performance goals
Creating a rift among physicians who achieve  18.4%        64
performance goals and those who don't
Other (please specify)                        18.2%        63

Total Respondents                                         347
(skipped this question)                                   585

[c]ACPE 2005 Pay-For-Performance Survey

Generally speaking, do you believe pay-for-performance programs are a
fair way to reward physicians for quality improvement?

                                              Response %  Response Total

Yes, these programs are fair                  33.5%       291
No, these programs are unfair                  7.4%        64
Too early to tell if these programs are fair  57.4%       498
Don't know                                     1.7%        15

Total Respondents                                         868
(skipped this question)                                    64

[c]ACPE 2005 Pay-For-Performance Survey

Do you think pay-for-performance programs will remain a permanent part
of health care or are they just a fad?

                               Response %  Response Total

Permanent part of health care  59.8%       517
Fad                            18.1%       156
Don't know                     22.1%       191

Total Respondents                          864
(skipped this question)                     68

[c]ACPE 2005 Pay-For-Performance Survey