P4P Quality

Cost of Quality Reporting: $15.4 billion

Medicare aims to move away from fee-for-service reimbursement and towards value-based payment mechanisms based on quality of care.  Although the goal is laudable, there are a number of practical challenges.  First, most care is still provided via fee for service.  In 2013, 95% of all physician office visits were reimbursed using fee-for-service.  Second, collecting quality of care data comes with cost. A paper by Casalino et al. (2016) find that quality reporting is in fact extremely costly.

Each year US physician practices in four common specialties spend, on average, 785 hours per physician and more than $15.4 billion dealing with the reporting of quality measures. While much is to be gained from quality measurement, the current system is unnecessarily costly, and greater effort is needed to standardize measures and make them easier to report.

Clearly, measuring quality of care is important, but Casalino rightly notes that understanding the costs of reporting and identifying strategies to reduce the cost of reporting is vital if value-based purchasing would be able to improve the efficiency of the health care system.


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