Should physicians be paid for performance?

Controlling health care costs is, like baseball, a game of inches. If doctors can tackle a problem that can be inexpensive to fix, such as helping a patient lose weight, they may avoid more serious and costly problems such as diabetes and heart disease. Increasingly, they are being rewarded for such behavior by insurance companies and the federal government.

According to America's Health Insurance Plans (AHIP), the lobbying arm of the health insurance industry, these P4P (pay for performance) incentives are for a range of practices such as prescribing less costly generic medication instead of name brand drugs, utilizing technology effectively and maintaining a high level of patient satisfaction. Insurance companies are keen on P4P.
"These programs offer financial incentives and support to physician groups -- and, in some cases, to individual primary care physicians and specialists -- for meeting or exceeding absolute performance standards, for being top performers compared with peers and for making improvements over time," according to the AHIP.

When the American Academy of Family Physicians (AAFP) surveyed its members recently, it found that 31% of the respondents received such payments, a number which the group says is rising as health care payers -- privaye insurance, plus Medicare and Medicaid -- recognize that the U.S. health care system is too focused on volume instead of quality. Businesses, even after complaining bitterly about costs for years, are expecting a 9% increase for health insurance premiums this year. President Obama's Health Care Reform law, which he signed in March, will save $590 billion or more in national health spending through 2019, according to the liberal Center for American Progress. The bill will include provisions to encourage the growth of pay-for-performance incentives.

There are pitfalls that worry doctors. The AAFP has adopted a policy on P4P that would force doctors to forfeit payments if they try to game the system for financial gain by "inappropriately deselecting non-adherent patients" -- those who get sick more often. Doctors incur additional costs for things like information technology and paperwork to make sure that the programs are being done correctly. There also is a mountain of paperwork that needs to be done. A study in the Annals of Family Medicine found that costs per full-time clinician ranged from less than $1,000 to about $11,000 during the implementation phase and from $100 to about $4,300 in the implementation phase.

Heim sees the shortcomings of the health care system up close at the hospital where she works in North Carolina. One patient currently is in the ICU because he lacked health insurance to pay for an inexpensive blood pressure medication.

Hospitals and doctors who take these P4P bonus payments will soon get a curve ball from insurers who are expected to begin penalizing them for providing poor care. This will set the stage for new arguments over health care reform.

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