1. Bruce Guthrie Glenna Auerback Andrew Bindman What changed when incentives changed in California Medicaid?

2. Pay-for-performance as panacea? “Pay for performance’s goal is not simply to reward those who perform well or to reduce costs. Rather, it is a mechanism to align incentives to encourage ongoing improvement in a way that will ensure high- quality care for all.” Institute of Medicine 2006

3. Pay-for-performance in Medicaid Public insurance for the poor & disabled Federally defined minimal provision, but considerable State autonomy Mixed public-private provision Cash-strapped

4. California Medicaid Medi-Cal Managed Care 8 counties with a single health plan 14 counties with a choice of health plan

5. The ‘pay’ in Medi-Cal pay-for-performance Auto-assignment of new enrollees who don’t choose a plan –~25% enrollee turnover annually –~25% of new enrollees don’t choose a plan –~5% of plan membership at risk each year Attractions –Cost neutral and simple to implement Disadvantages –Variable and opaque incentive

6. The ‘performance’ in Medi-Cal pay-for-performance Composite quality score determines auto- assignment share Five HEDIS measures –Childhood immunisations –Well child checks –Adolescent well care –Timeliness of pre-natal care –Appropriate medications for people with asthma

7. Research questions Qualitative 1.Were plans incentvized? 2.What did plans do in response? 3.What are the perceived consequences Quantitative 4.Did incentivized quality change? 5.Did non-incentivized quality change?

8. Methods - qualitative Documentary analysis –Public reports –Advisory Group minutes and briefing notes Semi-structured interviews with: –Plan CEOs, Medical Directors, QI Directors –Other members of Stakeholder Advisory Group –20 interviews with 29 participants –12 out of 15 plans in affected counties

9. Methods - quantitative Comparison of changes in quality in: –Managed care counties with choice of plan (intervention) –Managed care counties with a single plan (control) Difference-in-differences analysis of changes in quality from ‘before’ to ‘after’ implementation HEDIS data for 4 incentivized and 4 non- incentivized measures 2004-2007 Preliminary/premature results for discussion and to demonstrate methods

10. Q1. Were plans incentivized? Performance based auto-assignment is an incentive –Members as money –Members as mission But it’s one incentive among many –State regulation –Internal motivation to deliver high quality –Business case

11. “We’re doing the Lord’s work, we’re protecting the safety net.” Chief Executive Officer “I think of it as membership, but of course, marketing and finance think of it as dollars.” Medical Director

12. “Well [auto-assignment] is definitely one of the drivers, you know, of what are we going to work on this year. … The other drivers, you know, you’ve got the HEDIS, the Minimum Performance Level drivers. You’ve got your collaboratives.” Medical Director

13. Q2. What did plans actually do? Member focused QI –Information, reminders, incentives Provider focused QI –Information, technical support, incentives Improve data collection –Reliable data collection, data warehouses Change in focus more than de novo QI

14. “When they chose those five HEDIS rates, those became the sacred five. … We have a small provider incentive that is limited to a certain number of providers … All the time, people are asking me “Can we add another one [provider]?” and Well Baby is not one of the five… Would I rather spend that money on one of the five, well yeah. Those are the five.” Quality Improvement Director

15. Q3. Perceived consequences Better HEDIS scores –Better quality of care? –Better quality of data? Risk of crowding out other QI activity Risk of decreased collaboration with competitor plans in QI work with providers

16. “I think there is early evidence in increases in our HEDIS scores that are having an impact on patient care, but … there is a reporting aspect to this as well. That you could have an improvement in how you collect data, that will also improve your HEDIS scores.” Medical Director

17. “I think what it’s done is made you have to go out and spend a lot of money to try to collect the data … So you’re actually kind of diverting probably, dollars from providing actual quality into documenting quality.” Vice President

18. “I would prefer it not to be competitive. … I think what’s most effective is change at the provider level. And change at the provider level requires co-operation among payers.” Chief Executive Officer

19. Summary of qualitative findings Incremental not transformational Expect to improve incentivized measures Concern that non-incentivized care could be made worse Concern about competition reducing collaborative work with providers

20. Q4. Did incentivized quality change? Same for: Timeliness of prenatal care Appropriate asthma medications No difference (3 measures) Significant difference (1 measure)

21. Q5. Did non-incentivized quality change? No difference (3 measures) Significant difference (1 measure) Same for: Post-natal care Chlamydia screening

22. Implications for US policy More evidence that pay-for-performance isn’t rapidly transformational Transparency of incentives Who should be incentivized Scope of pay-for-performance Competition with incentives vs a coherent single system

23. Implications for the UK Pay for performance as a useful, but uncertain tool Incentives for quality when cash is tight Pay for performance for UK hospitals? Policy debate about relative effectiveness of competition vs collaboration vs command –Competition between providers vs competition between purchasers

25. Thank you!