Unbiased Analysis of Today's Healthcare Issues
There have been many pay-for-performance (P4P) programs that have been implemented to attempt to improve quality and reduce cost. The vast majority of these programs have not been able to demonstrate large or even any improvement in quality or cost. Some researchers claim that these programs have not worked due to the size of the…
Does Medicaid use pay-for-performance (P4P) for providers? If so, how does it work? And does it affect quality and cost? These are the questions of interest to Rosenthal et al. (2015) in their study of P4P programs in Alabama, Minnesota, and Pennsylvania. Although all three focus on physicians, the Alabama program is a “medical home ”…
Clearly, there is no single answer to this question and the answer depends on a number of factors including the market structure, provider responsiveness to intrinsic vs. extrinsic motivation, provider sample size, and the ability to accurately measure quality of care. Douglas Conrad (2015) uses agency theory to provide an overview of existing value-based payment systems. The…
A common method for measuring the effect of policy interventions is the difference in difference (DiD) approach. In essence, one examines the change in outcomes among observations subject to the policy intervention and compare them agains observations that were not eligible for the policy intervention. A key assumption for this approach to be valid is…
Yesterday I posted about MIPS, the new Medicare physician reimbursement program set to begin in 2019. The Health Affairs blog provides a nice summary of some of the changes. First and probably most importantly, the formulaic approach to setting base payment rates is gone, replaced with automatic increases for all doctors from 2015 through 2019. For…
I have spilled much ink on this blog discussing the pros and cons of pay-for-performance approaches to medicine. Incentivizing high quality care is good in theory, but in practice changes in quality have been modest and providers may be able to readily game the system. Despite these challenges, Medicare announced this week that it would being tying 30…
A McKesson study cites 7 trends in value-based reimbursement: Rapid adoption of VBR. About 90% of payers and 81% of providers are already using some mix of value-based reimbursement (VBR) combined with fee-for-service (FFS). Collaborative regions are more aligned with VBR. Collaborative regions, where one or two payers and providers stand out, are more aligned…
Medicare is working hard to make sure that doctors are efficiently providing high-quality care. Programs such as the Physician Quality Reporting System (PRQS) and the Value-Based Payment Modifier all are aimed to improve quality and lower cost. The downside of such programs, however, is that the impose reporting burdens on physicians. For instance, Medicare can…
In pay-for-performance (P4P) or value-based purchasing (VBP) schemes, health care provider reimbursement rates depend on performance. Physicians can receive bonuses for following best practices, and hospitals can increase reimbursement rates from Medicare if they improve clinical processes and patient satisfaction. As an economist, rewarding good performance with financial payments makes perfect sense. Or does it?…
General Practitioners (GPs) in the UK NHS are paid a mixture of capitation, lump sum allowances, and a pay-for-performance bonus. The P4P element, the Quality and Outcomes Framework (QOF), rewards GPs according to their performance on a large number of indicators. QOF payments represented up to 20% of GPs ’ income in the first year…