1 National Evaluation Team (NET) Boston University School of Public Health and Department of Veterans Affairs Dan Berlowitz, MD, MPH Matthew Guldin, MPH Barbara Bakhour, PhD Mark Meterko, PhD James Burgess, PhD Bert White, MBA, D Min Gary Young, JD, PhD Financial support provided by Agency for Healthcare Research and Quality and Robert Wood Johnson Foundation

2 Seven Demonstration Projects Measuring Impact of Financial and Non-Financial Incentives (2002 – 2005) Blue Cross Blue Shield of Michigan Blue Cross of California Bridges to Excellence California Health Care Strategies/Medi-Cal Excellus/Rochester IPA Integrated Healthcare Association: Pay for Performance Massachusetts Health Plan Quality Partners

3 Blue Cross Blue Shield of Michigan Focus –Process of care measures –Medication safety –Patient safety –Community health initiatives Scope –91 hospitals –$31 million dollars

4 Blue Cross of California Focus –PPO Physician Report Card –Physician Recognition Payment Program  Clinical  Administrative  Pharmacy Scope –1,000 physicians with PPO contracts –BCC members in 6 Bay area counties –$1 million

5 Bridges to Excellence Focus (structural measures of quality) –Physician clinical performance Diabetes Care Link program Cardiac Care Link program –Administrative performance Physician Office Link program Scope –200,000 covered employees in 4 regions: Boston, Cincinnati, Louisville, Albany –Diabetes care $100/employee-patient

6 California Health Care Strategies/ Medi-Cal Focus –Contract specific incentives for well-child visits Enhanced fees, Bonus One-time grant –Improve encounter claims data –Improve pediatric access, HEDIS scores Scope –8 Medicaid HMOs –1 million Medi-Cal and SCHIP children

7 Excellus/Rochester IPA Focus –Adherence to Care Pathways for acute and chronic conditions –Automated reminder system Scope –400,000 HMO commercial members –$17 million dollars

8 Integrated Healthcare Association: Pay for Performance Focus –Standardized measurement algorithm 7 Clinical measures (e.g. pap smear) Patient satisfaction Information technology investment –Public, multi-payer scorecard Scope –6 California health plans –8 million HMO commercial members –Potentially over $100 million dollars

9 Massachusetts Health Quality Partners Focus –Public, multi-payer scorecard –Plan-specific financial incentives Scope –5 health plans –4 million HMO commercial members

10 Demonstration Projects Differ on Various Dimensions Regarding Quality Targets and Incentives Thresholds –93%, 89% –75%, 67%, 61% –83% –87% –96% Selected quality targets –HbA1c screening –Diabetic eye exam –Mammography –Pap smear –Childhood immunization, MMR

11 Eligible recipients –Contracting entities  Group practice  IPA  IDS  Hospitals –Individual physicians Demonstration Projects Differ on Various Dimensions Regarding Quality Targets and Incentives (cont.)

12 Type of financial incentive arrangements –Withhold (5% - 20% of claims) –Block bonus potential to group (e.g. $60,000/40 PCPs; $1.2 million/280 PCPs) –PMPM bonus potential for total panel (e.g. $1.50 PMPM; $3.00 PMPM) –Hybrid: withhold and bonus –Enhanced fee schedule in subsequent year Demonstration Projects Differ on Various Dimensions Regarding Quality Targets and Incentives (cont.)

13 Type of non-financial incentive arrangements –Honor rolls and handshakes –Education resources and subscriptions –Internal practice-wide and peer comparisons –Public report cards Demonstration Projects Differ on Various Dimensions Regarding Quality Targets and Incentives (cont.)

14 Components of payout algorithms –Quality measures (HEDIS, homegrown, outcome control) –Utilization – total medical expense trends –Information systems –Infrastructure –Patient access and satisfaction Demonstration Projects Differ on Various Dimensions Regarding Quality Targets and Incentives (cont.)

15 National Evaluation Team Activities Conduct comparative analyses with uniform data Technical support to local evaluators for each demonstration project

16 Key Research Questions Does linking financial incentives to quality goals lead to better quality of care? Is quality of care further enhanced when a combination of financial and non-financial incentives is linked to quality goals? What key characteristics of providers moderate the impact of a program that links incentives to quality goals? Does linking financialand/or non-financial incentives to quality goals have unintended consequences for quality of care?

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18 Data Collection Protocol Draw random sample of contracting entities in selected demonstration sites (~25-30/site) Conduct telephone interview with practice executive for contracting entity Conduct survey of physicians affiliated with contracting entity (~1500/site) Conduct site visits to selected contracting entities

19 Physician Survey Multi- Item, Likert Scale Questionnaire Examples: Awareness –Physicians are aware of the incentive features of health plan contracts that apply to them. Scope of control –Most physicians are able to achieve the quality targets set by health plans and other payers. Unintended consequences –Physicians’ efforts to achieve quality targets hinder them from providing other essential medical services.

20 Preliminary Results (Telephone Interviews and Pilot Surveys) Divergent opinions among physicians about importance of financial incentives: –Adequacy of dollars –Complex distribution formulas –Clinical validity is key –Concerns about data validity Divergent opinions among practice administrators about physician’s role: –Physician-centered –Doctor is necessary but not sufficient –System/management-centered