Pay for Performance, how would it work in Healthcare?
Results! Results!! and Results!!! That is our business mantra. We are a performance-based society or that is what we like to believe. Then you would wonder why this system of pay for performance has not been applied yet to the healthcare industry. Or May be it has not been successfully applied yet!.......
How do you make sure it will work?
I would appreciate your kindness in providing your input at
http://blogs.biproinc.com/healthcare/?p=9
where the topic is discussed a bit in detail for your perusal.
Answers (10)
We only have to pay when we can see our primary care physician when we are sick, instead of a physician's assistant (glorified nurse). If our primary care physician is not available when we are sick and need him/her, we do not have to pay!
Jamie Marcellus R
Healthcare Executive
Best Answers in: Mentoring (1), Compensation and Benefits (1), Ethics (1)
P4P has shown some success in other healthcare systems such as British NHS and France’s system.
This said as Dr. Pandey mentions there are certain loopholes that need to be contained such as “cherry picking” wherby the facility/HMO/provider only rosters healthy individuals, so that they meet performance standards. This can be overcome with some controls.
AS for the profit question, I am going out on a limb to say that profit is not necessarily bad. Provided there is leadership with the ability to ensure there is a balance between quality of care and profit, so that it is not profit at all cost, there are significant opportunities for quick essential innovation, better quality (higher quality of care drives more patients to your org, thereby improving volumes etc) as well as access to much needed capital, and debt to finance new technologies, expansion etc. This is one area where hospitals fall down in Canada, because of their funding model (government funds based on funding model with some case weighted/case cost structures) there is no ability to raise capital, assume debt, etc as a means of getting better technologies such as PET scanners to improve the delivery of care (proper diagnosis, plus proper treatment is the pinnacle of quality care).
Fundementally, Dr. Pandey highlights an area that healthcare executives do not spend a lot of focus, at least not historically, which is different industries (manufacturing, quality innovation, etc) where there is a signifcant opportunity to learn and apply successful strategies (such as six sigma). This is critical to the future success of the healthcare industry.
JM
Peter M
Professional Manager of Operations and Process Improvement
Best Answers in: Organizational Development (1), Manufacturing (1)
The system would require an increased level of transparancy in relation to service outcomes. Large MCO/HMO's may create pay for performance within their own networks since they have access to service outcomes and claim histories related to the enrolled members seeking services with the networked doctors. As Jamie mentioned Pay for Performance can lead to economic advantages as well as an overall improvement in services rendered. To expand this at a National level would require data collection and data sharing currently not available. An undertaking this large would require the support of professional organizations such as CAQH and AMA to name a couple. Public awarness and public support would also be required. Independent organizations have and will continue to develop and deploy variations of pay for performance and those efforts should be compared and evaluated. Thanks for the great question.
Paul C
Business Analyst and Technical Writer
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I believe health care, at least in the USA (and probably elsewhere, too) used to be performance-based, back when the doctor was just a person in the neighborhood. If he (and pardon me for using the male pronoun here, it's just simpler for me - and when I think of old-time docs, I think of old white-haired men) did a good job, he got more business - patients. If he did a poor job, fewer people went to see him.
Pretty simple.
The same applied to specialists, but less so to hospitals, as they were fewer and further-between (but then, people didn't go to a hospital except for treatment of serious injuries, so their performance-releated results were less-scrutinized).
Word-of-mouth, or reputation, is how doctors got 'business'. And how they lost business, too. It was a simple, direct system which got ugly once government became involved (as most things do).
The main problem is: In countries with state-run healthcare systems, doctors have little-to-no incentive to perform at their highest level. They know they will see X number of patients, whether they do a good job for those patients, or not. Furthermore, since doctors in those places make FAR less money than doctors in countries without state-run healthcare, there are far fewer doctors; this means that getting 'rid' of an underperforming doctor is harder, because he's harder to replace - there are not as many people wanting to be doctors, you see.
Performance and innovation are stifled when the state runs the industry. Remove state-run enterprises, and you'll see improvement in results.
Dr. Pandey:
In regards to pay-for-performance how about this: A patient seeing a medical group has uncontrolled diabetes and hypertension, a condition she’s had for a while. For the geographical area in which this patient lives, and based on internal data, her insurance company knows that it would cost about $20,000 to treat her for one year. Suppose the insurance company gave the medical group the $20,000 up front for the year? If the medical group can manage and improve the patient’s condition in five or six months at a cost of $12K, they make a profit of $8K. If the patient gets worse and more medical attention is required, the medical group loses money. In the next calendar year, the insurance company would cut a check to the medical group of the patient’s choosing, on the evaluation of her care needs. If the patient still has uncontrolled hypertension and diabetes, the medical group would get a check for 20K and have the potential to make or to lose money depending on outcomes. If the patient is apparently healthy a check would be cut for $2,500. In the year period if the patient stays healthy there is potential for profit. If the patient develops a condition the medical group would lose money. This would bring health education and prevention upfront and center to doctors and the whole care network, which would be prompted by economics to spend more time talking about nutrition and exercise. As for the health plans, they would benefit from better patient outcomes and would align themselves with medical groups that obtain good results.
This is not a new idea it has been circulating in the literature for a few years.
Regards,
Robert
Bogdan C
Managing Partner & Business Intelligence Consultant at Business Intelligence & Administration Services
Healthcare as well as other domain activities supports the following attributes, if off-course it becomes possible for the founders.
- Efficiency;
- Professionalism;
- Motivation;
1. You can obviously get those 3 key aspects from the market. Integrating a high-level technology standard into a hospital or similar facility allows you to fast switch medical reports, synchronize and organize automatically procedures or steps to be followed that you would usually do with a simple paper and a pencil. This brings efficiency because the "resource" can concentrate on important activities and forget about the other "management" tasks automated.
2. For this you've got training procedures, how-how's explained as necessary for every individual. Besides the training method you have social integration, a good human-resource company can manage and advice the company's personnel in order to structure the pyramidal order considering their advices, containing information about: best environment for evolving, and related stuff.
3. Why not! Everyone knows that where's a good profit you can find good will, motivation and self-empowerment.
I do consider that paying for performance it's the easiest and safest way to reach the top but.. I'm not advising everyone to do that. Basically the management and business skills are the main factors that bring performance from the employees. The payment part it's just like a commune factor between individuals that accomplishes the stimulation role.
BC
Deanna A
Health Informatics Specialist at Down East Community Hospital
Best Answers in: Compensation and Benefits (1), Quality Management and Standards (1)
Paying for performance in healthcare is a very interesting concept. It would certainly ensure that clinicians would ensure they are giving top notch service to their clients so they could get maximum reimbursement. Too many clinicians will give bare minimum service, leaving the client dissatisfied or perhaps feeling like they were just another number in the many clients that the clinician sees. If the payscale was set so that clinician gave rates for the types of service the patients felt they were given it would quickly tell them how they are doing and where they could approve, which I think would make them strive to increase their performance so they get paid at the top of the scale rather than the lower part of the scale. This concept could definitely be a win-win situation where the clinician can get paid what they are worth and the patient gets quality service because the clinician wants to be paid for good service.
Jerry E
Auto, Home & Life Insurance Professional
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What are the results in healthcare that are being measured? And if those are the ones that you really want, build a pay plan that rewards accomplishing those results. It would be nice if the results were focused on healthy people rather than on profitability.
Doug H
Owner at Charter School Management Services, LLC
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Pay for Performance is much more difficult that most make it out. Most do it really poorly. You need to first look at your corporate goals, and then you need to define what performance in specific jobs looks like in order to align performance with the goal. Then you can begin to pay for performance. Until you correctly align the desired performance with the correct goals, you'll simply be rewarding adherence to a job description like so many others.
Steven R. Freedman S
known as the "WD-40 of HR" - I help organizations run more smoothly, efficiently, & effectively.
This is a pragmatic HR viewpoint. I don't think we can tie how many people get healed or how many people die to the performance work element. It's highly possible that a physician, nurse, medical facility could accurately diagnose a condition, treat it appropriately, and the patient may still not be cured/saved. At our present state of knowledge our bodies are still full of vagaries. At some point the genome study may yield the perfect pill made for each person's individual biological error/flaw to create perfect balance in the body, but we're not there yet. What we're left with is what the human providers do or should have done.
I think that leaves us with some very tangible, if not directly related to health improvement, metrics. For instance:
Diagnosis: Within 2 days if the diagnosis and treatment have not shown signs of patient improvement then a rediagnosis should take place. Every subsequent day without rediagnosis and with no patient improvement results in marks being taken away from the doctors score.
Medical Delivery: If in-hospital patients are to be given meds within X hours and the delievry is late, either an acceptable explanation is given to the patient and the doctor or a point is taken away from the medical deliverer.
Administration: If hospitals don't develop systems that populate multiple forms with patient data so patients don't need to be bothered with excess paperwork then a mark is taken away for every piece of paper that doesn't need to be personally handled by the patient.
Triage: Pain and Seriousness of Injury. Any time someone who is not in one of these two categories is given attention prior to the former then points should be taken away.
Metrics should be established for appropriate point levels for each medical staff member. Group metrics should be published within the organization so there will be motivation for improvement when unit A has more points than unit B.
Like I said, I'm an HR guy, not a medical one, but that's what I'd [propose.
