The Effect of Pay‐for‐Performance in Nursing Homes: Evidence from State Medicaid Programs

Objective

Pay-for-performance (P4P) is commonly used to improve health care quality in the United States and is expected to be frequently implemented under the Affordable Care Act. However, evidence supporting its use is mixed with few large-scale, rigorous evaluations of P4P. This study tests the effect of P4P on quality of care in a large-scale setting—the implementation of P4P for nursing homes by state Medicaid agencies.

Data Sources/Study Setting

2001–2009 nursing home Minimum Data Set and Online Survey, Certification, and Reporting (OSCAR) datasets.

Study Design

Between 2001 and 2009, eight state Medicaid agencies adopted P4P programs in nursing homes. We use a difference-in-differences approach to test for changes in nursing home quality under P4P, taking advantage of the variation in timing of implementation across these eight states and using nursing homes in the 42 non-P4P states plus Washington, DC as contemporaneous controls.

Principal Findings

Quality improvement under P4P was inconsistent. While three clinical quality measures (the percent of residents being physically restrained, in moderate to severe pain, and developed pressure sores) improved with the implementation of P4P in states with P4P compared with states without P4P, other targeted quality measures either did not change or worsened. Of the two structural measures of quality that were tied to payment (total number of deficiencies and nurse staffing) deficiency rates worsened slightly under P4P while staffing levels did not change.

Conclusions

Medicaid-based P4P in nursing homes did not result in consistent improvements in nursing home quality. Expectations for improvement in nursing home care under P4P should be tempered.     

A Note on the Comparative Statics of Pay‐for‐Performance in Health Care

Pay‐for‐performance (P4P) is a widely implemented quality improvement strategy in health care that has generated much enthusiasm, but only limited empirical evidence to support its effectiveness. Researchers have speculated that flawed program designs or weak financial incentives may be to blame, but the reason for P4P's limited success may be more fundamental. When P4P rewards multiple services, it creates a special case of the well‐known multitasking problem, where incentives to increase some rewarded activities are blunted by countervailing incentives to focus on other rewarded activities: these incentives may cancel each other out with little net effect on quality. This paper analyzes the comparative statics of a P4P model to show that when P4P rewards multiple services in a setting of multitasking and joint production, the change in both rewarded and unrewarded services is generally ambiguous. This result contrasts with the commonly held intuition that P4P should increase rewarded activities. Copyright © 2015 John Wiley & Sons, Ltd.     

An Examination of Pay‐for‐Performance in General Practice in Australia

Objective

This study examines the impact of Australia''s pay-for-performance (P4P) program for general practitioners (GPs). The voluntary program pays GPs A$40 and A$100 in addition to fee-for-service payment for providing patients recommended diabetes and asthma treatment over a year, and A$35 for screening women for cervical cancer who have not been screened in 4 years.

Design

Three approaches were used to triangulate the program''s impact: (1) analysis of trends in national claims for incentivized services pre- and postprogram implementation; (2) fixed effects panel regression models examining the impact of GPs'' P4P program participation on provision of incentivized services; and (3) in-depth interviews to explore GPs'' perceptions of their own response to the program.

Results

There was a short-term increase in diabetes testing and cervical cancer screens after program implementation. The increase, however, was for all GPs. Neither signing onto the program nor claiming incentive payments was associated with increased diabetes testing or cervical cancer screening. GPs reported that the incentive did not influence their behavior, largely due to the modest payment and the complexity of tracking patients and claiming payment.

Implications

Monitoring and evaluating P4P programs is essential, as programs may not spark the envisioned impact on quality improvement.     

Effects of Changes in Diabetes Pay‐for‐Performance Incentive Designs on Patient Risk Selection

Objective

Taiwan''s National Health Insurance (NHI) Program implemented a Diabetes Pay‐for‐Performance Program (P4P) based on process‐of‐care measures in 2001. In late 2006, that P4P program was reformed to also include achievement of intermediate health outcomes. This study examined how the change in design affected patient risk selection.

Designs/Study Populations

Study populations were identified from a 2002 to 2003 period (Phase 1) and a 2007 to 2008 period (Phase 2), spanning pre‐ and postimplementation of reforms in the P4P incentive design. Phase 1 had 74,529 newly enrolled P4P patients and 215,572 non‐P4P patients, and Phase 2 had 76,901 newly enrolled P4P patients and 299,573 non‐P4P patients. Logistic regression models were used to estimate the effect of changes in design on P4P patient selection.

Principal Findings

Patients with greater disease severity and comorbidity were more likely to be excluded from the P4P program in both phases. Furthermore, the additional financial incentive for patients'' intermediate outcomes moderately worsened patient risk selection.

Conclusions

Policy makers need to carefully monitor the care of the diabetes patients with more severe and complex disease statuses after the changes of P4P financial incentive design.     

The Early Effects of Medicare's Mandatory Hospital Pay‐for‐Performance Program

Objective

To evaluate the impact of hospital value-based purchasing (HVBP) on clinical quality and patient experience during its initial implementation period (July 2011–March 2012).

Data Sources

Hospital-level clinical quality and patient experience data from Hospital Compare from up to 5 years before and three quarters after HVBP was initiated.

Study Design

Acute care hospitals were exposed to HVBP by mandate while critical access hospitals and hospitals located in Maryland were not exposed. We performed a difference-in-differences analysis, comparing performance on 12 incentivized clinical process and 8 incentivized patient experience measures between hospitals exposed to the program and a matched comparison group of nonexposed hospitals. We also evaluated whether hospitals that were ultimately exposed to HVBP may have anticipated the program by improving quality in advance of its introduction.

Principal Findings

Difference-in-differences estimates indicated that hospitals that were exposed to HVBP did not show greater improvement for either the clinical process or patient experience measures during the program''s first implementation period. Estimates from our preferred specification showed that HVBP was associated with a 0.51 percentage point reduction in composite quality for the clinical process measures (p > .10, 95 percent CI: −1.37, 0.34) and a 0.30 percentage point reduction in composite quality for the patient experience measures (p > .10, 95 percent CI: −0.79, 0.19). We found some evidence that hospitals improved performance on clinical process measures prior to the start of HVBP, but no evidence of this phenomenon for the patient experience measures.

Conclusions

The timing of the financial incentives in HVBP was not associated with improved quality of care. It is unclear whether improvement for the clinical process measures prior to the start of HVBP was driven by the expectation of the program or was the result of other factors.     

Higher Incentive Payments in Medicare Advantage's Pay‐for‐Performance Program Did Not Improve Quality But Did Increase Plan Offerings

Objective

To evaluate the effects of the size of financial bonuses on quality of care and the number of plan offerings in the Medicare Advantage Quality Bonus Payment Demonstration.

Data Sources

Publicly available data from CMS from 2009 to 2014 on Medicare Advantage plan quality ratings, the counties in the service area of each plan, and the benchmarks used to construct plan payments.

Study Design

The Medicare Advantage Quality Bonus Payment Demonstration began in 2012. Under the Demonstration, all Medicare Advantage plans were eligible to receive bonus payments based on plan‐level quality scores (star ratings). In some counties, plans were eligible to receive bonus payments that were twice as large as in other counties. We used this variation in incentives to evaluate the effects of bonus size on star ratings and the number of plan offerings in the Demonstration using a differences‐in‐differences identification strategy. We used matching to create a comparison group of counties that did not receive double bonuses but had similar levels of the preintervention outcomes.

Principal Findings

Results from the difference‐in‐differences analysis suggest that the receipt of double bonuses was not associated with an increase in star ratings. In the matched sample, the receipt of double bonuses was associated with a statistically insignificant increase of +0.034 (approximately 1 percent) in the average star rating (p > .10, 95 percent CI: −0.015, 0.083). In contrast, the receipt of double bonuses was associated with an increase in the number of plans offered. In the matched sample, the receipt of double bonuses was associated with an overall increase of +0.814 plans (approximately 5.8 percent) (p < .05, 95 percent CI: 0.078, 1.549). We estimate that the double bonuses increased payments by $3.43 billion over the first 3 years of the Demonstration.

Conclusions

At great expense to Medicare, double bonuses in the Medicare Advantage Quality Bonus Payment Demonstration were not associated with improved quality but were associated with more plan offerings.     

Testing the myth of fee‐for‐service and overprovision in health care

Paying on the basis of fee‐for‐service (FFS) is often associated with a risk of overprovision. Policymakers are therefore increasingly looking to other payment schemes to ensure a more efficient delivery of health care. This study tests whether context plays a role for overprovision under FFS. Using a laboratory experiment involving medical students, we test the extent of overprovision under FFS when the subjects face different fee sizes, patient types, and market conditions. We observe that decreasing the fee size has an effect on overprovision under both market conditions. We also observe that patients who are harmed by excess treatment are at little risk of overprovision. Finally, when subjects face resource constraints but still have an incentive to overprovide high‐profit services, they hesitate to do so, implying that the presence of opportunity costs in terms of reduced benefits to other patients protects against overprovision. Thus, this study provides evidence that the risk of overprovision under FFS depends on fee sizes, patients' health profiles, and market conditions.     

Administrative reform and pay‐for‐performance methods of primary health service delivery: A comparison of 3 health districts in Cambodia, 2006‐2012

Since 1999, performance‐based financing or pay‐for‐performance (P4P) methods have been piloted in the Cambodian public health sector, first as one part of external contracting approaches with international nongovernment organizations and from 2009 as a part of internal contracting arrangements between units within the Ministry of Health under a wider public sector administrative reform. This study analyses these reforms and compares outcomes in 3 health districts. The study analysed routine quantitative data for primary care service delivery by using the interrupted time series method. Qualitative data were collected from key informant interviews. Both the level and the trend line of key service delivery indicators during earlier contracting/P4P models were at least maintained and in most cases increased with the move to internal contracting. The results of the interrupted time series analysis were mixed, mainly due to contextual issues. Qualitative results indicated an increased sense of local ownership and financial sustainability. Despite the gains, the management of personnel and the implementation and the integrity of contract monitoring were found to be compromised in this case. To be fully effective, contracting and P4P approaches must be accompanied by changes in the structure and culture of government administration.     

Payment Mechanisms and the Composition of Physician Practices: Balancing Cost‐Containment,Access, and Quality of Care

We take explicit account of the way in which the supply of physicians and patients in the economy affects the design of physician remuneration schemes, highlighting the three‐way trade‐off between quality of care, access, and cost. Both physicians and patients are heterogeneous. Physicians choose both the number of patients and the quality of care to provide to their patients. When determining physician payment rates, the principal must ensure access to care for all patients. When physicians can adjust the number of patients seen, there is no incentive to over‐treat. In contrast, altruistic physicians always quality stint: they prefer to add an additional patient, rather than to increase the quality of service provided. A mixed payment mechanism does not increase the quality of service provided with respect to capitation. Offering a menu of compensation schemes may constitute a cost‐effective strategy for inducing physicians to choose a given overall caseload but may also generate difficulties with access to care for frail patients. Copyright © 2014 John Wiley & Sons, Ltd.     

Pay-for-Performance in the United Kingdom: Impact of the Quality and Outcomes Framework--A Systematic Review

PURPOSE Primary care practices in the United Kingdom have received substantial financial rewards for achieving standards set out in the Quality and Outcomes Framework since April 2004. This article reviews the growing evidence for the impact of the framework on the quality of primary medical care. METHODS Five hundred seventy-five articles were identified by searching the MEDLINE, EMBASE, and PsycINFO databases, and from the reference lists of published reviews and articles. One hundred twenty-four relevant articles were assessed using a modified Downs and Black rating scale for 110 observational studies and a Critical Appraisal Skills Programme rating scale for 14 qualitative studies. Ninety-four studies were included in the review. RESULTS Quality of care for incentivized conditions during the first year of the framework improved at a faster rate than the preintervention trend and subsequently returned to prior rates of improvement. There were modest cost-effective reductions in mortality and hospital admissions in some domains. Differences in performance narrowed in deprived areas compared with nondeprived areas. Achievement for conditions outside the framework was lower initially and has worsened in relative terms since inception. Some doctors reported improved data recording and teamwork, and nurses enhanced specialist skills. Both groups believed that the person-centeredness of consultations and continuity were negatively affected. Patients' satisfaction with continuity declined, with little change in other domains of patient experience. CONCLUSIONS Observed improvements in quality of care for chronic diseases in the framework were modest, and the impact on costs, professional behavior, and patient experience remains uncertain. Further research is needed into how to improve quality across different domains, while minimizing costs and any unintended adverse effects of payment for performance schemes. Health care organizations should remain cautious about the benefits of similar schemes.     

云南省龙陵县新型农村合作医疗定点医疗机构服务质量评价

目的:探讨不同人群对新型农村合作医疗定点医疗机构服务质量的评价情况,确保新型农村合作医疗制度的顺利推行。方法:采用流行病学现场调查方法。结果:全体调查对象对各定点医疗机构服务条件的评价分布差异分别都有统计学意义(P<0.001)。参合农民与医务人员对各定点医疗机构的服务态度、总体满意度和选择就诊的评价分布差异分别都有统计学意义(P<0.01)。经非条件Logistic回归分析表明,参合农民选择村卫生室就诊的主要原因是医生服务态度好、可信度高和就医方便等。医务人员选择县医院就诊的主要原因是医疗设备较好、总体满意度较高等。结论:各级定点医疗机构服务质量一般。建议有关卫生主管部门努力改善乡村卫生机构的服务条件,改善县级医疗机构的服务态度,严格控制农村医药费用的不合理增长。