How will pay for performance ultimately impact the quality of care?

“Pay for performance” made headlines again this week, when Health and Hospitals Corporation (HHC), the multi-billion dollar corporation which operates New York City’s public hospitals, announced that they will be linking physician reimbursement to pre-determined “quality” metrics and patient satisfaction scores.

This announcement comes quickly on the heels of details recently released by the Centers for Medicare and Medicaid Services (CMS) regarding its first Medicare payment adjustment to hospitals under the Hospital Value-Based Purchasing Program. The program, a main tenet of the Patient Protection and Affordable Care Act (ObamaCare), withheld or rewarded up to 1% of a hospital’s Medicare reimbursement based on how they performed on quality and patient satisfaction measures, the same measures now being used by HHC.

Overall, the CMS program is the first glimpse at the shift towards “pay-for-performance” under the new health law. This is an attempt by the government to move away from the current fee-for-service model, which compensates physicians for each service provided – a model that some believe provides incentive for doctors to perform an excessive number of unnecessary tests and procedures. Piggybacking on the outcomes measures developed as part of CMS’ new program, HHC has quickly linked performance on these federal benchmarks to the salaries of their physician employees.

While the CMS program does not yet directly impact the individual practicing physician, they will be included in a similar program, starting in 2015 for the largest group practices, and in 2017 for all practicing physicians in the United States. At that time, physicians’ Medicare reimbursement is going to be directly tied to how well they meet treatment benchmarks, how much it costs them to do so, and how patients perceive the care they received (again, through post-treatment satisfaction surveys). The list of benchmarks is extensive, and includes everything from how often you prescribe steroids for chronic lung disease (when appropriate), to how often you obtain blood samples in diabetics, to the number of times your patients went to the emergency room.  Each physician will receive a report from CMS, which breaks down their performance, and highlights where they stand in comparison to their peers. Those that provide the cheapest care, while meeting the highest pre-set standards, will be reimbursed the most. Sounds simple right?

My hospital, with almost 1.5% of our Medicare reimbursement withheld (including a penalty for a high 30-day hospital readmission rate), was one of the bigger losers under the new Value-Based Purchasing program (according to a Kaiser Health News analysis). The CMS report was covered extensively in health policy circles, and I am certain received due attention in hospital and insurance company executive offices. The shocking thing was, physicians at work were not talking about it.  I don’t think it is because nobody cares, it just seems to me that many cannot find the time to stay up to date on the “peripheral” subjects of medicine, such as health care policy and health care technology (EMR, apps, digital doctors, etc), as well as remain well-read on the newest advances in disease prevention, diagnosis, treatment, etc. At times, it seems that an MPH or MBA would be as useful to operate efficiently in the current health care environment as a medical license.

Clearly, the practice of medicine, perhaps better described as the delivery of healthcare, is undergoing a radical, permanent change, at least for the foreseeable future. After all, we are only a few weeks into the first year of ObamaCare, and already HHC, one of the largest hospital corporations in the country, has decided to hold their physician employees financially responsible for the mandatory changes outlined by CMS. The complexity of these changes makes their adoption into current practice a daunting task for many physicians.

The simple fact is, that the future of medicine looks very different than it did when many of today’s doctors started medical school, even for those who have graduated in recent years.  For those who entered the field to treat patients, cure disease and make a real difference in the lives of others, the current tasks that consume much of their time and energy are carrying them further and further away from that goal. The optimists in the field would like to believe that pay-for-performance is simply a resetting of the status quo, which will take considerable time and effort, but ultimately benefit our profession and our patients in the long term.

I am hesitant to agree with this view for two reasons, among others. First, I believe that many physicians are already at or near capacity in terms of their ability to deliver care, both in terms of organizational resources, and personal time and energy. Many individual and small-group practices simply do not have the resources to understand and implement the constantly changing mandates from CMS. Therefore, when you hand them a forever evolving checklist of arbitrary measures that they must follow in order to be reimbursed properly, you only increase confusion and frustration, and do little to impact productivity or foster a system that delivers better care.

Secondly, for any physician who sees their reimbursement cut by providing “sub-optimal care”, as deemed by CMS, what is to stop them from refusing to serve their sickest, most chronically ill and frequently hospitalized patients? In so doing, they raise the “quality” of care they provide, and lower the cost at the same time (they will not be responsible for those sick patients when CMS evaluates them the next year). Such a reaction to pay-for-performance would only further accelerate a current trend in medicine, which is seeing many physicians refuse to accept new Medicare patients.

It is impossible to forecast how pay-for-performance will ultimately impact the quality of care we provide, and the cost at which we do so.  But one thing is certain; the job of physicians providing that care becomes more difficult every day.

Thomas Santo is a physician who blogs at Scope of Medicine.

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