Do pay-for-performance (P4P) programs work? P4P programs pay paying providers (or health plans) more if they have better outcomes or follow specific best practices. Whether or not they lead to better outcomes has been much debated. However, many P4P programs implemented in the real world have been evaluated using a pre-post design which could create endogeneity if the date of the P4P implementation is not random.
In contrast, a recent paper by Petersen et al. (2017) uses a cluster randomized controlled trial design to see whether or not a program to incentivize providers based on the quality of care given to patients with hypertension leads to better outcomes. This particular study looks at the effect of the hypertension P4P program specifically among black hypertensive patients. Providers were provided training about the JNC 7 hypertension guidelines.
In the study, the trial:
…randomized 12 VA hospital-based primary care clinics to one of four study groups, differentiated by the type of incentive rewarded: (1) physician-level (individual) incentives; (2) practice-level incentives; (3) physician- and practice-level (combined) incentives; and (4) no incentives (control)…To ensure that facilities of the same type would not be concentrated in one arm, randomization was constrained on hospital teaching status, geographic location, participation in the Antihypertensive and Lipid-Lowering Treatment to Prevent Heart Attack Trial (ALLHAT).
Physicians who had better outcomes (in the treatment arms) received higher payments. These outcomes included:
- proportion of sampled black hypertensive patients receiving guideline-recommended antihypertensive medications,
- proportion with controlled blood pressure,
- proportion with uncontrolled blood pressure who received an appropriate clinical response to an uncontrolled blood pressure (e.g., lifestyle recommendation for stage 1 hypertension or guideline-recommended medication adjustment)
On average, the total additional payment per physician during the study was $2,744.
P4P programs can also lead to gaming. Providers who want to maximize their bonus payments may focus on treating patients that are more likely to be adherent to treatment recommendations or who are relatively more healthy. To test this, the authors look at “whether a patient switched providers, panel turnover among physician participants, and visit frequency.”
Using this approach, the authors found that:
The proportion of black patients who achieved blood pressure control or received an appropriate response to uncontrolled blood pressure in the final performance period was 6.3 percent (95 percent confidence interval [CI] 0.8– 11.7 percent; p = .03) greater for physicians in the intervention group than for physicians in the control arm…However, after correcting for multiple comparisons (five study outcomes), the significance threshold did not meet the new adjusted significance level of 0.02.
There was no difference between the arms in patient switching rates and it appears that providers did not decrease visit rates for black patients.
In short there is some suggestive that the P4P improved hypertension outcomes. Of the five outcome measures considered, all improved more in the intervention arm, but only two of these five results had a p-value of 0.05 or lower.
Healthcare Economist’s Discussion
Even if hypertension outcomes improved, however, it is not clear that P4P is optimal. For instance, providers may increase their effort to treatment hypertension and improve intermediate hypertension outcomes, but may do this at the cost of focusing on a patient’s other diseases. In particular, consider the case of a patient who has hypertension as well as a rare but more severe disease. If the patient is requesting care for their rare disease, providers could treat the patient’s top priority at the risk of decreasing their quality score or they could focus on hypertension care but upset patients by not focusing on the patient’s most severe issues of the day. This multitasking problem is well known in the field of economics, including work by the 2016 Economics Nobel Prize winner Bengt Holmström.