1. 1 The Relationship between Pay-for- Performance Incentives and Quality Improvement: A Survey of Massachusetts Physician Group Leaders Ateev Mehrotra, Steven Pearson, Kathryn Coltin, Ken Kleinman, Janice Singer, Barbra Rabson, Eric Schneider RAND Pittsburgh, University of Pittsburgh, Brigham and Women’s Hospital, Harvard Medical School, Harvard School of Public Health, and Massachusetts Health Quality Partners Supported by the Robert Wood Johnson Foundation Rewarding Results Initiative and an National Research Service Award (#6 T32 HP11001-17)

2. 2 Previous Research Few published studies on P4P incentives have shown limited or no impact 1 Few published studies on P4P incentives have shown limited or no impact 1 Potential reasons Potential reasons Providers reject concept Providers reject concept Magnitude not significant Magnitude not significant Insufficient time Insufficient time 1.Rosenthal and Frank. Med Care Research Review, Rosenthal et al. JAMA. 2005 Oct 12, 294:1788-93.

3. 3 Research Questions 1. What is the prevalence and magnitude of P4P incentives? 2. Are these incentives financially important to physician groups? 3. Do P4P incentives lead to increased use of QI initiatives? 4. How do physician group leaders view P4P?

4. 4 Study Sample 100 groups on Massachusetts 2005 physician group report card 100 groups on Massachusetts 2005 physician group report card Interviewed leaders of 79 groups between May and September 2005 Interviewed leaders of 79 groups between May and September 2005 Semi-structured phone interviews lasting 30- 60 min Semi-structured phone interviews lasting 30- 60 min

5. 5 Physician Group Characteristics (n=79) Number of Primary Care Providers % <= 10 MD <= 10 MD13 11-25 MD 11-25 MD28 26-100 MD 26-100 MD41 > 100 MD > 100 MD18 Significant Capitation (>25% of commercial revenue) 13

6. 6 Research Questions 1. What is the prevalence and magnitude of P4P incentives? 2. Are these incentives financially important to physician groups? 3. Do P4P incentives lead to increased use of QI initiatives? 4. How do physician group leaders view P4P?

7. 7 Prevalence and Magnitude of P4P in Massachusetts * Limited to 37 groups Groups with P4P incentives in health plan contracts 89% Overall revenue tied to P4P 2.2% (0.3 – 8.0)*

8. 8 Focus of Current P4P Incentives Among Groups with Any P4P (n=71) Measures Groups reporting any P4P tied to measure % HEDIS measures 100 Utilization measures 64 Use of EMR or other IT 51 Patient Satisfaction Survey Measures 35

9. 9 Research Questions 1. What is the prevalence and magnitude of P4P incentives? 2. Are these incentives financially important to physician groups? 3. Do P4P incentives lead to increased use of QI initiatives? 4. How do physician group leaders view P4P?

10. 10 Evaluation of Financial Importance Stratified by Revenue at Risk * Limited to 37 non-IPA groups with P4P Mantel-Haenzel chi-squared test for trend significant with p value of 0.01 % of Overall Revenue tied to P4P N*P4P are “very important” or “moderately important” to group’s financial success % <1%1911 1-3%922 >3%956

11. 11 Research Questions 1. What is the prevalence and magnitude of P4P incentives? 2. Are these incentives financially important to physician groups? 3. Do P4P incentives lead to increased use of QI initiatives? 4. How do physician group leaders view P4P?

12. 12 Use of QI Initiatives

13. 13 Relationship between P4P & QI Initiatives

14. 14 Variables Associated with Increased Use of QI Initiatives Odds Ratio (95% CI) P Value Pay-for-performance incentive1.6 (1.0-2.4) 0.04 Employed Physician Group3.2 (1.5 – 7.1) 0.004 Larger group (>39 physicians)2.2 (1.0 - 4.9) 0.06

15. 15 Research Questions 1. What is the prevalence and magnitude of P4P incentives? 2. Are these incentives financially important to physician groups? 3. Do P4P incentives lead to increase use of QI initiatives? 4. How do physician group leaders view P4P?

16. 16 Views of P4P % of Physician Group Leaders Physician groups should be paid based performance on HEDIS measures 77 P4P will lead to quality improvements over next 3 years 79

17. 17 Limitations Findings do not address any problems with how current P4P incentives are structured Findings do not address any problems with how current P4P incentives are structured Does not address actual performance on quality measures Does not address actual performance on quality measures Cannot comment on potential adverse impacts of P4P incentives Cannot comment on potential adverse impacts of P4P incentives

18. 18 Key Findings Vast majority of groups face P4P Vast majority of groups face P4P Leaders support concept of P4P tied to HEDIS measures Leaders support concept of P4P tied to HEDIS measures Current magnitude of P4P may be insufficient Current magnitude of P4P may be insufficient P4P incentives are associated with increased use of QI initiatives P4P incentives are associated with increased use of QI initiatives

19. 19 Policy Implications Support among physician leaders for incentives based on quality Support among physician leaders for incentives based on quality Help us understand the necessary financial magnitude of incentives Help us understand the necessary financial magnitude of incentives Demonstrate potential for pay-for-performance incentives to increase attention paid to quality improvement Demonstrate potential for pay-for-performance incentives to increase attention paid to quality improvement

20. 20 For further information: mehrotra@rand.org

21. 21 Independent Variables in Model P4P Incentive on that measure P4P Incentive on that measure Percentage of Employed Physicians (majority vs. less than majority) Percentage of Employed Physicians (majority vs. less than majority) Use of EMR (majority use EMR vs. less than majority) Use of EMR (majority use EMR vs. less than majority) Size of group (>39 PCP vs. 39 PCP vs. <=39 PCP) Types of MD (Mostly specialty vs. Equal mix or mostly primary care) Types of MD (Mostly specialty vs. Equal mix or mostly primary care) Significant capitation Significant capitation Part of a Network Part of a Network

22. 22 Assessing Prevalence of QI Initiatives  Focus on 8 HEDIS measures  Open-ended question  Follow-up questions to determine whether met criteria for 12 pre- specified categories of QI initiatives  Not all reported QI initiatives coded

23. 23 Measures Discussed in Interview HEDIS measures HEDIS measures Patient satisfaction survey results Patient satisfaction survey results Utilization measures Utilization measures Use of EMR or other IT Use of EMR or other IT Asthma Controller Medication Use Asthma Controller Medication Use Adequacy of Well Child Visits Adequacy of Well Child Visits Chlamydia Screening Chlamydia Screening Mammogram Screening Mammogram Screening HbA1c Screening HbA1c Screening Hyperlipidemia Screening in patients with CAD Hyperlipidemia Screening in patients with CAD LDL control among patients with CAD LDL control among patients with CAD Hypertension Control Hypertension Control

24. 24 Ideally What % of Overall Revenue Should be Tied to P4P Incentives? % of Physician Group Leaders Ideal Percentage 5% or Greater 91