Advantages & Disadvantages of Medicare Pay for Performance

Save
Pay-for performance programs in Medicare are an attempt to control costs while maintaining quality.
Pay-for performance programs in Medicare are an attempt to control costs while maintaining quality. (Image: Hemera Technologies/AbleStock.com/Getty Images)

In an effort to establish a more cost effective system of health care through the Medicare and Medicaid programs, the United States government has investigated “pay-for-performance” programs. In a pay-for-performance program, health care providers receive a portion of their remuneration for health care services in the form of bonuses based upon how well they meet predetermined performance measures.

Performance Measurements

Proponents of pay-for-performance systems generally cite quality of care as their primary objective. A 2006 Congressional Research Service report stated the Institute of Medicine (IOM) and the Medicare Payment Advisory Commission (MedPAC) have both come out in favor of an incentive program based on the quality of care. However, methods for defining and quantifying quality of care are complex. Typically, performance matrices are measured in terms of clinical outcome, process, structure or patient satisfaction. Regardless of how quality of care is defined and measured, the reality is that performance measurements will be balanced against cost.

Providing medical care based on financial incentives raises ethical issues.
Providing medical care based on financial incentives raises ethical issues. (Image: Hemera Technologies/AbleStock.com/Getty Images)

Clinical Outcomes

At first glance, clinical outcomes might be the preferred measurement standard, but establishing a matrix for reward thresholds based on clinical outcomes is almost impossible to accomplish due to varying objectives and the complexity of determining preferred outcomes. For instance, the preferred outcome for a patient with a chronic illness could be additional years of life based on statistical projections, but factors such as quality of life, patient wishes, patient compliance and other non-quantifiable variables are not easily factorable.

It's the payer, not the patient, who decides the objectives and how they will be evaluated.
It's the payer, not the patient, who decides the objectives and how they will be evaluated. (Image: Creatas Images/Creatas/Getty Images)

Process

Process, or the appropriate delivery of health care services and practice patterns, is easy to measure, but it not necessarily tied to quality of care or desired outcome. For instance, process-based pay-for-performance would require the use of certain diagnostic screening when a patient exhibits specific symptoms, or the dispensing of certain medication for specific conditions. This type of “boilerplate” medicine has been applied in managed care programs within the private insurance industry and has produced complaints from both doctors and patients regarding the inflexibility of treatment that compromises the interests of the patient.

The payer, not the doctor, decides which tests and treatments the patient receives.
The payer, not the doctor, decides which tests and treatments the patient receives. (Image: Comstock/Comstock/Getty Images)

Structural

Structural measures have to do with the adoption of health information technology (HIT) for electronic medical records. Structural measurement in a pay-for-performance system provides financial incentives for implementing effective HIT systems. The advantages of structural measurement are that compliance is easy to measure, and it can significantly reduce costs through efficiency while increasing the quality of care through the effective communication of comprehensive medical histories.

Patient Satisfaction

The advantage of using patient satisfaction as a measurement for pay-for-performance goals is that the data is easily collected and measured. But patient satisfaction is not a reliable indicator of quality health care. Patient satisfaction is often a result of clinical outcome rather than the quality or appropriateness of care provided. Outcome can also be influenced by patient compliance, over which the health care provider has no control. Additionally, a study of elderly patients published in the May 2, 2006 Annals of Internal Medicine found that there was no relationship between patient satisfaction and the quality of care.

Related Searches

References

Promoted By Zergnet

Comments

Related Searches

Check It Out

Are You Really Getting A Deal From Discount Stores?

M
Is DIY in your DNA? Become part of our maker community.
Submit Your Work!