Author's commentary In March 2005, the AAPA's Quality Care Committee* submitted a policy paper on quality incentive programs (better known as pay-for-performance) to the House of Delegates. The intent of the policy paper is to inform PAs about the growth of quality incentive programs, identify the important criteria and principles the programs should possess, and consider their positive and negative impact on PAs and the health care system. Ideally, having a better understanding of quality incentive programs will allow PAs to help guide the development and implementation of quality incentive programs.
*The members and staff of the 2004-2005 Quality Care Committee were Lisa Mustone Alexander (chair), Dave Coleman, James Delaney, and Debra Herrmann. Board advisor was Greg Bennett. Staff advisors are Steve Crane and Bob McNellis. Staff member Michael Ellwood worked extensively on the policy paper.
Over the past 2 years, quality incentive programs have gained momentum and increased in scope. The Leapfrog Group has a Web-based compendium of quality incentive programs which contains more than 90 incentive and reward programs targeting consumers, health plans, hospitals, and physicians. Over half of these programs are targeted at physicians and may provide financial and nonfinancial incentives.
The Centers for Medicare and Medicaid Services (CMS) has had quality incentive programs in place for hospitals since 2003. In January 2005, Medicare launched a pilot program in ambulatory settings to evaluate quality incentive programs in 10 large physician practice groups across the country. MedPAC, the advisory group which recommends Medicare policy to Congress, recommended in its March 2005 report that CMS begin to institute broader quality incentive programs for hospitals, home health agencies, and physicians. In August, two bills in Congress specifically targeted new pay-for-performance programs for physicians.
The Senate bill (S. 1356) would create pay-for-performance programs for Medicare providers but would not address the physician reimbursement schedule. The House bill (H.R. 3617) not only introduces pay-for-performance but also completely revamps the current reimbursement formula with payments based on the Medicare Economic Index. Physicians reporting or meeting quality measures would receive full annual updates, while those not reporting or meeting the measures would receive a reduced payment update, so-called “value-based purchasing.” The quality measures and standards are yet to be determined. Many physician groups support pay-for-performance as long as it involves elimination of the sustainable growth rate aspect of physician reimbursement.
This article presents excerpts from the Quality Incentive Programs policy paper that was adopted in May 2005 and offers commentary on what it means to practicing PAs.
AAPA's policy on quality incentive programs
The American Academy of Physician Assistants encourages continued efforts to promote improvements in patient care. AAPA supports the development of quality incentive programs, often referred to as “pay-for-performance,” when the incentives are based upon achievement of evidence-based clinical benchmarks, patient satisfaction, and the adoption of health information technology.
In addition, AAPA believes that quality incentive programs should include these key principles:
- Focus on processes that lead to better patient outcomes
- Foster the team approach to care
- Offer voluntary practice participation
- Use reliable and accurate patient data
- Provide feasible and practical reporting
- Ensure programs are fair and equitable, accounting for differences in practice settings and population groups.
The tension between health care costs and quality
Commentary The new focus on quality incentive programs follows previously unsuccessful attempts at more comprehensive health care reform in the early 1990s and the managed care movement of the late 1990s. One of the weaknesses of managed care was its major focus on limiting the allocation of health care resources, which led to dissatisfaction on the part of many patients and providers by making it more difficult to obtain some health services. Both reform movements grew out of the exponential growth in health care spending in the United States over the past 20 years. Current estimates are that the United States spends more than $1.7 trillion on health care, over 15% of the gross domestic product. This is twice the per capita average of most industrialized nations.
Large national expenditures on health care are not necessarily detrimental if those expenditures provide high quality care and good health in return. However, many health economists and analysts argue that we do not get the highest quality care for the health dollars spent. Recent reports have documented a high prevalence of medical errors and significant disparities in the quality of care. Data have demonstrated that many institutions and providers do not comply with standards for prevention, diagnosis, and management of disease. Quality incentive programs are the next iteration of health care reforms attempting to both lower cost and improve quality.