It is one of the broad but central tenets of capitalism and an oft-regarded recipe for success: "Work hard and you will be rewarded." While the concept loosely applies to the free market and various commercial industries, it rarely translates smoothly into the intricacies of healthcare. For practicing physicians, any number of factors may contribute to compensation, from practice management to third party reimbursement. But in recent years, many employers and insurance companies have implemented new frameworks for determining compensation. These pay-for-performance modalities (or "P4P") are still in the early stages of development and implementation (alpha versions), but they have become more common in primary care and may soon extend to various specialties, including dermatology.
The notion of compensation based on performance quality is not a new concept for practicing physicians, whose salaries are in some sense always connected to the quality of service and treatment they provide. But pay-for-performance measures aim to provide structure to this notion, rewarding physicians specifically for quality of care, as determined by evidence-based measures of treatment. The concept is potentially attractive for physicians and patients, but a number of questions remain as to the implications for the implementation of P4P frameworks on a wide scale. Moreover, how such systems may affect smaller specialties such as dermatology is also a concern for many in those specialties.
THE LOGISTICS OF P4P
The question on all physicians' minds concerning pay-for-performance is simple: Does it work? The answer, however, is more complicated than the question. According to experts, physicians in primary care and specialized care have yet to form a consensus on P4P, mostly because the effects of these programs are only starting to emerge, and the early lessons are leading to program redesigns that may make programs more effective moving forward. Although physicians would appear to be the only party affected (since pay-for-performance ultimately determines their compensation), the success of P4P programs will be measured by how all parties respond, including patients, as well as insurers and employers investing in the measures at the outset.
Opinions are still mixed at this juncture, even as P4P becomes more prevalent in primary care. "All parties want to see evidence that these measures really improve outcomes," says Dirk Elston, MD, Director of the Department of Dermatology and Director of the Dermatopathology Fellowship program at Geisinger Medical Center in Danville, PA. Primary care has been creating quality measures for several years, while dermatology and other small specialties are still very new to the process, according to Dr. Elston. "Most of the national healthcare priorities relate to chronic diseases managed by primary care physicians, and it is more difficult for us to create measures that will receive national endorsement," he adds. How soon P4P begins playing a more significant role in specialties like dermatology will depend upon the results of ongoing inquiries into its success in primary care. It's worth noting that CMS is moving in this direction, and that dermatology is in the PQRI measures set, which is likely to form the basis of any P4P effort.
Given the multiplicity of factors of pay-for-performance programs and their relation to healthcare, success is turning out to be difficult to measure definitively. Apart from the structure of the programs themselves, one must also step back and observe how these structures interact with other aspects of practice. Since it is still not possible to determine whether pay-for-performance will be successful, it is perhaps sensible to note the impetus for its action.
According to Cheryl Damberg, PhD, senior researcher for the RAND Corporation, the goals and potential ends of P4P may shed light on the means toward meeting those ends. "Medical group leadership see P4P as valuable in gaining the attention of their physicians and orienting them to provide the right care for designated conditions," she says. This trend is indicative of a perceived quality gap, according to Dr. Damberg, who recently co-authored a study examining the various components of P4P in a concentrated area to examine its effects from the front-lines.1 Dr. Damberg and her co-authors found that while physicians reported increased performance, feedback, and accountability, these changes had not translated into breakthrough quality measures over the initial investment period. She notes, however, that the changes that groups were making may translate into more significant long-term changes, as there was substantial investment in IT capabilities, data tracking, and feedback to physicians.
From a patient's perspective, ensuring that their doctor is providing the right care is a positive, according to Dr. Damberg. For physicians, the benefits are not as straightforward, as they might depend on their current method of practice. "For physicians who tend to practice in a reactive mode, without coordinating care across the many providers a patient sees, and who operate in a non-data driven quality improvement world, this change is hard—as it means investing in IT and managing to quality, and doing things in a more proactive fashion," says Dr. Damberg. She explains that this requires re-engineering, which is difficult for physicians without organizational support, i.e., solo practices and smaller practice lacking infrastructure. "At an individual physician level, the ability to fully engage is challenging given the many things that physicians are asked to focus on in a given day," says Dr. Damberg. "Therefore, while physicians like to receive bonuses, they may find it challenging to focus on the details of these programs and provide data to support measurement, accountability and P4P". This is also due to the lack of electronic data, as we are still in a mostly paper-based world," says Dr. Damberg.
The relationship of pay-for-performance to Health Information Technology (HIT) is particularly noteworthy, despite the fact that its nature has not yet been elucidated. However, there have been some signals indicating how P4P affects HIT, and vice versa. Some researchers and physicians note that because P4P programs are conducive to HIT, particularly in accelerating the adoption and use of Electronic Health Records (EHR). The suggestion is that EHR could allow for broader, more comprehensive measurement and feedback to physicians. But in a recent report, researchers found that pay-for-performance programs that do not directly emphasize health information technology use likely do not influence the adoption of EHR.2 Dr. Damberg further points out that the presumed relationship of P4P and its influence of the adoption of EHR may actually be reversed, i.e. EHRs may likely affect the ability of P4P to thrive. Nevertheless, the relationship is critical. "It will be increasingly difficult in the future for doctors to practice efficiently (and in a way that is profitable) absent the use of more IT capabilities," says Dr. Damberg.
MEASURE OF SUCCESS
Questions of whether pay-for-performance in concept is inherently productive or not may be irrelevant to the larger discussion of its use in medicine. Dr. Elston suggests that the success of P4P hinges almost entirely on the quality measures themselves, specifically how they are constructed and implemented. Well-constructed quality measures can improve patient safety and outcomes, he points out. Dr. Damberg observes that P4P also allows for the re-allocation of resources to support quality management, as well as help physicians understand which patients are not receiving the right care. "It has also, in a medical group environment, allowed groups to work to provide physician specific feedback to docs so they can improve," says Dr. Damberg. "If dermatologists are working in a group environment, there is no reason they wouldn't expect to see the same benefits."
However, the risks of enacting the wrong measures are significant. Says Dr. Elston, "Poorly constructed measures simply divert physician attention from more important work or, worse, create perverse incentive for physicians to abandon sicker patients or use overly aggressive treatment just so they measure well." He also points out that measures can divert focus away from other important patient safety activities that are not being measured. "As it exists now, P4P diverts attention away from other important patient safety issues that are not being measured," he notes. These may include drug interactions and unanticipated adverse events. These more intangible issues are inherent in any measurement system, according to Dr. Elston. Nevertheless, more emphasis should be placed on patient safety, as well as increasing efficacy, says Dr. Elston.
Dr. Elston explains that although these may not be the defining characteristics of P4P, they represent potential negative outcomes if measures are not properly constructed or rushed into use. This will likely take much work within smaller medical specialties and their respective medical societies. But it remains necessary toward ensuring success.
LONG TIME COMING
Part of the reason why P4P likely has not reached smaller specialties yet is that there has been a shortage of performance measures for clinical subspecialists. Dr. Damberg observes that this is beginning to change, as CMS is investing more than $400 million over the next five years in meaasures development. "The starting point for all measure is the clinical evidence," says Dr. Damberg. So the question in dermatology, according to Dr. Damberg, is: What does the evidence say about practices that improve morbidity and mortality? This is the starting point for the creation of all P4P measures. In primary care, Dr. Damberg explains that many medical groups and organizations are involved in and committed to designing these measures. Physicians have taken action through the American Medical Association's PCPI consortium, the AQA, the HQA, NQF, the Jt Commission, and CMS.
On the dermatology front, options are more limited. But Dr. Elston reminds that if and when P4P becomes a strong presence in the specialty, the importance of physician involvement may be even more essential than in primary care. "We can initiate some measures through PCPI but should have a greater involvement in developing measures, validating them, and approving them," says Dr. Elston. "As more dermatologists find that they need to report measures because of maintenance of licensure requirements, physician tiering, or a sincere wish to do the right thing, we need rank-and-file dermatologists involved in creating the right measures, so that they will be beneficial for our patients."
According to Dr. Elston, these measures should address quality of care, rather than simply cost-containment. Moreover, he notes, physicians should only be measured on what they can control, pointing to the AMA PCPI position statement on quality measures as an effective summary of the physician point of view.
Although dermatologists rightfully express concern with the potential of such a drastic change in reimbursement policies, Dr. Damberg argues that much of the criticism directed toward pay-for-performance programs to date is largely unfounded, particularly speculation about ignoring the needs of sicker patients. "Most incentives are very low-powered, and have not resulted in patient dumping," she says. Dr. Damberg further explains, "The key to constructing incentives is to ensure that they are targeted on measures that are actionable by physicians, showing plenty of variation, with the built-in need for improvement." Additionally, she notes, incentives should not be too large that they distort behavior in ways that create undesirable outcomes. "Incentive programs —version 2.0 and beyond— could be tailored to accomplish particular goals, such as reducing disparities," she says.
But the larger question about pay-for-performance, which engages the issue on both a conceptual and a practical level, is whether doctors will still have the discretion to not follow a measure when it is contraindicated. According to Dr. Damberg, the answer is yes. And as quality measures continue to be developed, this will be one of the major issues addressed. "In the UK program they allow exception reporting. In the US, the standard practice is that no one expects 100 percent compliance," she says. "The issue is raising 60 percent performance to 90 percent performance," she continues. While it will never guarantee 100 percent performance, P4P is designed to drastically improve performance quality, according to Dr. Damberg, which is the basis of designing measures.
QUALITY CONTROL
As P4P continues to gain prominence and normalize in healthcare, it is perhaps still too early to determine if its promise of rewarding physician excellence and overall cost savings will translate into enhanced healthcare and mutual patient and physician satisfaction. Recent feedback indicates that specialists on the whole may be warming to P4P,3 which may suggest that changes will happen sooner than expected.
No matter how fast this occurs, Dr. Damberg reminds that as P4P begins to unfold over coming months and years in dermatology, the central issue that P4P addresses is the creation of performance-based accountabilities. "These will be valued in all systems—public and private—in healthcare, education, transportation, etc.," she says. "The other issue in play is that P4P isn't the sole solution, but rather part of a larger package of changes that need to occur, including HIT adoption, quality improvement support, etc. for the overall improvement of healthcare and quality performance," Dr. Damberg observes.
As dermatologists face issues of physician tiering and maintenance of licensure, the AAD should provide a menu of quality measures suitable for every practice so that those who want to, or need to report voluntarily have measures they can choose that are appropriate to their practices, Dr. Elston says. The continued development of P4P would benefit with greater representation from specialists and a greater emphasis on patient safety, according to Dr. Elston. And as these measures continues to surface in the specialty, Dr. Elston reminds that the main thrust of P4P will come from the physicians themselves, "because we always strive to do the best for our patients," he says.
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