rewarding performance: three-year results from california's statewide pay-for-performance...

Rewarding Performance: Rewarding Performance: Three-Year Results from California's Three-Year Results from California's

Statewide Pay-for-Performance Statewide Pay-for-Performance ExperimentExperiment

Rewarding Performance: Rewarding Performance: Three-Year Results from California's Three-Year Results from California's

Statewide Pay-for-Performance Statewide Pay-for-Performance ExperimentExperiment

Cheryl L. Damberg, PhD, Kristiana Raube, PhD, Stephanie Cheryl L. Damberg, PhD, Kristiana Raube, PhD, Stephanie Teleki, PhD, and Erin dela CruzTeleki, PhD, and Erin dela Cruz

June 5, 2007June 5, 2007

Financial support provided by the California Healthcare FoundationFinancial support provided by the California Healthcare Foundation

Academy Health, 2007

Presentation TopicsPresentation Topics

IHA Pay-for-Performance program designIHA Pay-for-Performance program design

Year-to-year changes in performance scores Year-to-year changes in performance scores

Physician group responses to P4P post 3Physician group responses to P4P post 3rdrd incentive paymentincentive payment

ConclusionsConclusions


Evaluation of the IHA P4P ProgramEvaluation of the IHA P4P Program

A 5-year evaluation to assess the impact of A 5-year evaluation to assess the impact of the IHA P4P program on:the IHA P4P program on:

Changes in performance over timeChanges in performance over time

Changes in payments and the distribution of Changes in payments and the distribution of payments over timepayments over time

The relationship between structural The relationship between structural characteristics and performance scorescharacteristics and performance scores

Physician group responses to the incentive Physician group responses to the incentive programprogram

Leadership interviews with physician groupsLeadership interviews with physician groups


IHA P4P ProgramIHA P4P Program A statewide collaborative effort among:A statewide collaborative effort among:

7 major health plans and 225 medical groups7 major health plans and 225 medical groups 12 million commercial HMO and POS enrollees12 million commercial HMO and POS enrollees

Measurement started in 2003 for 1Measurement started in 2003 for 1stst payout in 2004 payout in 2004 33rdrd payout occurred late summer 2006 payout occurred late summer 2006

Design ElementsDesign Elements

Unit of paymentUnit of payment Medical groups (n=225)Medical groups (n=225)

# of measures# of measures 17 (clinical, patient experience, IT capability)17 (clinical, patient experience, IT capability)

Data sourceData source Administrative (plan or medical group self-report)Administrative (plan or medical group self-report)

Min of 3.25 encounters PMPYMin of 3.25 encounters PMPY

Earning potentialEarning potential Avg. bonus of 2-3% of cap (~$2.50 per member Avg. bonus of 2-3% of cap (~$2.50 per member per month)per month)

Scoring methodScoring method Most plans use relative rankingsMost plans use relative rankings

TransparencyTransparency Full transparencyFull transparency


Performance Measures Performance Measures MY Year 2005, Payout 2006MY Year 2005, Payout 2006

ClinicalClinical Asthma managementAsthma management Childhood immunization (MMR, VZV)Childhood immunization (MMR, VZV) Cancer screening (breast, cervical)Cancer screening (breast, cervical) Diabetes (HbA1c measure and control)Diabetes (HbA1c measure and control) LDL (screening and control: 03 cardiac; 04 cardiac and LDL (screening and control: 03 cardiac; 04 cardiac and

diabetic)diabetic)

Patient ExperiencePatient Experience Timely access to careTimely access to care Doctor-patient interaction/communicationDoctor-patient interaction/communication Specialty careSpecialty care Overall ratings of careOverall ratings of care

IT CapabilityIT Capability Integrate clinical electronic dataIntegrate clinical electronic data for population management for population management

Clinical decision making Clinical decision making support at point of caresupport at point of care through through electronic toolselectronic tools


Weighting of Measures in Payout FormulaWeighting of Measures in Payout Formula

Payout YearPayout Year 20042004 20052005 20062006 20072007

Clinical MeasuresClinical Measures 50%50% 40%40% 50%50% 50%50%

Patient Experience with CarePatient Experience with Care 40%40% 40%40% 30%30% 30%30%

IT Capabilities (add systemness IT Capabilities (add systemness measures in 2007)measures in 2007) 10%10% 20%20% 20%20% 20%20%

TotalTotal 100%100% 100%100% 100%100% 100%100%

Individual physician Feedback program Individual physician Feedback program ((optional add on bonusoptional add on bonus)) xx xx

Year-to-year improvement Year-to-year improvement ((optional optional in 06; begins 07 for all plansin 06; begins 07 for all plans)) xx


$55.0

$89.5

$144.6

$53.7$37.4

$83.4

$82.0

$119.5$137.1

$0.0

$40.0

$80.0

$120.0

$160.0

2004 2005 2006

Millions of Dollars

IHA Payouts Non-IHA Payouts Total Payouts

Changes in Payouts: 2004-2006Changes in Payouts: 2004-2006

∆∆=47% increase in IHA portion=47% increase in IHA portion


Total Payments to Physician Organizations*Total Payments to Physician Organizations*2004 vs. 2005 2004 vs. 2005

$0

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

$1,400,000

$1,600,000

$0 $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000 $1,400,000

2004

20

05

* Note: Truncated to groups receiving less than $2 million


3-Year Performance Changes3-Year Performance Changes

2003 (2004 payout) to 2003 (2004 payout) to

2005 (2006 payout) 2005 (2006 payout)


Modest Changes in Patient Experience ScoresModest Changes in Patient Experience Scores

MeasureMeasure 20032003 20042004 Mean Mean DifferenceDifference

Rating of Health CareRating of Health Care 70.0%70.0% 71.4%71.4% 1.4%1.4%****

Rating of Doctor Rating of Doctor 80.0%80.0% 80.7%80.7% 0.5%0.5%

Rating of Specialist Rating of Specialist 71.0%71.0% 71.9%71.9% 0.8%0.8%

Doctor CommunicationDoctor Communication 85.6%85.6% 87.0%87.0% 1.3%1.3%******

Timely Care and AccessTimely Care and Access 69.5%69.5% 70.2%70.2% 1.4%1.4%******

No Problem Seeing SpecialistNo Problem Seeing Specialist 59.5%59.5% 61.3%61.3% 2.2%2.2%******

Statistically significant at *** p<.001 ** p < .01; * p < .05


0

10

20

30

40

50

60

70

80

90

100

2003 2004 2005

Measurement Year

Mea

n S

core

Overall Mean

Quartile 1

Quartile 2

Quartile 3

Quartile 4

Asthma: All AgesAsthma: All Ages

Reduction of 5.6% points in variationReduction of 5.6% points in variation

21% point gain in 21% point gain in performanceperformance


0

10

20

30

40

50

60

70

80

90

100

2003 2004 2005

Measurement Year

Me

an

Sc

ore

Overall Mean

Quartile 1

Quartile 2

Quartile 3

Quartile 4

Breast Cancer ScreeningBreast Cancer Screening


3.5% point gain in 3.5% point gain in performanceperformance


HbA1c ScreeningHbA1c Screening

0

10

20

30

40

50

60

70

80

90

100

2003 2004 2005

Measurement Year

Mea

n S

core

Overall Mean

Quartile 1

Quartile 2

Quartile 3

Quartile 4


7.7% point gain in 7.7% point gain in performanceperformance


Diabetes HbA1c Screening: 2004 vs. 2005Diabetes HbA1c Screening: 2004 vs. 2005

0

10

20

30

40

50

60

70

80

90

100

0 20 40 60 80 100

2004

20

05


Breast Cancer Screening: 2004 vs 2005Breast Cancer Screening: 2004 vs 2005

0

10

20

30

40

50

60

70

80

90

100

0 20 40 60 80 100

2004

2005


IT adoption increases each yearIT adoption increases each year

0

10

20

30

40

50

60

70

80

90

100

Patient Registry Actionable Reports HEDIS Results

Number of Groups Measurement Year 2003

Measurement Year 2004

Measurement Year 2005

By 2005, 33-44% of Groups and 68-76% of By 2005, 33-44% of Groups and 68-76% of Patients Had Data Integration TechnologyPatients Had Data Integration Technology


More IT Functions are AdoptedMore IT Functions are Adopted

0

10

20

30

40

50

60

70

80

90

ElectronicPrescribing

ElectronicCheck of

PrescriptionInteraction

ElectronicRetrieval ofLab Results

ElectronicAccess of

Clinical Notes

ElectronicRetrieval of

PatientReminders

AccessingClinicalFindings

ElectronicMessaging

Number of Groups

Measurement Year 2003 Measurement Year 2004 Measurement Year 2005

By 2005, 1-39% of Groups; 20-64% of By 2005, 1-39% of Groups; 20-64% of Patients had Point of Care TechnologyPatients had Point of Care Technology


Physician Organization Responses to Physician Organization Responses to

Pay for Performance:Pay for Performance:

Findings from Leadership InterviewsFindings from Leadership Interviews


Physician Organization Responses to the Physician Organization Responses to the Incentive ProgramIncentive Program

Second round of interviews with physician Second round of interviews with physician leadership (3 years into program)leadership (3 years into program)

Study population: 35 physician organizations Study population: 35 physician organizations (POs) out of a universe of 225 in CA ((POs) out of a universe of 225 in CA (n=29 n=29 completed to datecompleted to date))

Cross section of groupsCross section of groups High, medium, and low performing PosHigh, medium, and low performing Pos

Reflects the spectrum of “winners and Reflects the spectrum of “winners and losers”losers”

Large and small POsLarge and small POs Reflects resource constraintsReflects resource constraints

Rural and urban POs Rural and urban POs


Support Quality Focus, but Face ConstraintsSupport Quality Focus, but Face Constraints

• Most said the organization provides Most said the organization provides support to addressing quality support to addressing quality Mean score = 4.0 (1 to 5 scale, with 5 = a lot of support)Mean score = 4.0 (1 to 5 scale, with 5 = a lot of support)

• Biggest constraints to improving quality:Biggest constraints to improving quality: Technology challenges, such as lack of EMRTechnology challenges, such as lack of EMR

Changing physician behaviorChanging physician behavior

Data issues, such as data integration, missing Data issues, such as data integration, missing information, etc.information, etc.

• POs feel they are moderately successful in POs feel they are moderately successful in monitoring their quality performancemonitoring their quality performance

Mean score=3.7 ( 1-5 scale, with 5 = very successful)Mean score=3.7 ( 1-5 scale, with 5 = very successful)


Is the Current Incentive Level of 1-2% of Is the Current Incentive Level of 1-2% of Capitation Right?Capitation Right?

Among those earning incentives, the amount was 2% Among those earning incentives, the amount was 2% or less as a percentage of total capitation paymentsor less as a percentage of total capitation payments

Mixed results on +/- ROIMixed results on +/- ROI

Widespread support for increasing incentivesWidespread support for increasing incentives to 5- to 5-10% of capitation payments (26 out of 29 POs 10% of capitation payments (26 out of 29 POs agreed)agreed)

This level would increase attention, provide a positive ROI This level would increase attention, provide a positive ROI and defray set-up costsand defray set-up costs

Some POs noted current levels have gotten their attention Some POs noted current levels have gotten their attention and urged them to make changesand urged them to make changes


Most POs Believe P4P Affects Organizational Most POs Believe P4P Affects Organizational and Physician Behaviorand Physician Behavior

• Increased organizational accountability for qualityIncreased organizational accountability for quality

New project managers, quality support, and medical New project managers, quality support, and medical directors directors

• Improvements in data collection, including IT adoptionImprovements in data collection, including IT adoption IT and data support staffIT and data support staff

Data mining capabilitiesData mining capabilities

EMRs, hardware, software, and web interfacesEMRs, hardware, software, and web interfaces

• Physicians are more directly managing patients and Physicians are more directly managing patients and working with administration to improve qualityworking with administration to improve quality

Bonuses tied to qualityBonuses tied to quality

Outreach to physicians; clinical and patient satisfaction Outreach to physicians; clinical and patient satisfaction guideline reviewguideline review


ConclusionsConclusions Modest positive changes occurring for most Modest positive changes occurring for most

measuresmeasures Combination of quality improvements and improvements in Combination of quality improvements and improvements in

data capturedata capture

Data capture continues to challenge small groups and some Data capture continues to challenge small groups and some IPAsIPAs

Challenges of how to improve patient experienceChallenges of how to improve patient experience

Performance payments have grown slowly over timePerformance payments have grown slowly over time $$ at risk for performance are still a small fraction of total $$ at risk for performance are still a small fraction of total

paymentspayments

Current level of incentives isn’t high enough to really get Current level of incentives isn’t high enough to really get attention of physiciansattention of physicians

Hard to incentivize specialists given absence of Hard to incentivize specialists given absence of measuresmeasures


Will P4P Solve the Cost and Quality Problems Will P4P Solve the Cost and Quality Problems in the U.S. Health System?in the U.S. Health System?

Improving the Improving the reliability of carereliability of care received from current received from current level of one-sigma to six-sigma?level of one-sigma to six-sigma?

Slowing the growth in healthcare costsSlowing the growth in healthcare costs to the rate of to the rate of growth in the GDP or general level of inflation?growth in the GDP or general level of inflation?

Reducing the number of deaths from medical errorsReducing the number of deaths from medical errors from from estimated rate of >100,000/year to below 5,000/year?estimated rate of >100,000/year to below 5,000/year?

Unlikely in near termUnlikely in near term

Need for other policy levers in conjunction with P4P Need for other policy levers in conjunction with P4P (e.g., broader performance measurement, (e.g., broader performance measurement, transparency, investments in information systems)transparency, investments in information systems)

rewarding performance: three-year results from california's statewide pay-for-performance...

Documents

performance measures

2006sheet2sheet3academy

iha portionchart137

payout formula7academy

physician groupsacademy

electronic toolsacademy

major health plans

performance program