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Physician Pay-for-Performance Programs

By August 30, 2011Commentary

Pay-for-performance programs are becoming ubiquitous across all payers.  The evidence on whether and how well they work, however, is not well-established.  A recent paper published by the National Bureau of Economic Research reviewed the effects of a Canadian physician pay-for-performance initiative.  Evaluating the results of these initiatives in the US is difficult because physicians are subject to many varying reimbursement and quality programs and it is difficult to conduct real randomized clinical trials.  The Canadian study was somewhat simpler because Canada is a single payer system.   This study evaluated a pay-for-performance program initiated in Ontario and covers a ten-year period before and after the program was introduced and is able to compare physicians before and after they were in the program as well as physicians in the program with doctors outside of it. (NBER Paper)

The Ontario program had incentives for preventive care and care around specific treatment or needs.  In regard to preventive care, physicians are rewarded both for contacting patients about it and for actually delivering certain preventive items.  In some cases the physicians receive the payment directly, in others the group they are in gets it.  For the targeted services, the physicians are rewarded for delivery above a minimum and always directly receive the payment.  Not all physicians were eligible for or enrolled in the incentive program, providing for a natural experiment.  The researchers had data allowing them to adjust for patient population characteristics, as well as provider characteristics.  They also employed several strategies to help mitigate the effect of confounding variables.  In the end, 2,185 physicians were evaluated for their response to the pay-for-performance incentives.

There were three groups of physicians; those who were never eligible for the incentive program; those who became eligible after the program was started and those who were eligible at the start.  Overall, the results found a very modest effect of the incentives.  The bonuses for contacting patients in regard to preventive care appeared to have no effect.  The incentives did appear to improve rates of senior flu shot, Pap smear, mammography and colorectal cancer screening.  The payments for the specific services did not affect the delivery of those services.   In regard to preventive care, younger doctors, those in larger practices and those with the lowest baseline rates appeared to be most impacted by the incentive payments.  One possible explanation for the results is that the payments were not large enough, particularly in regard to costs of achievement, to move behavior.  Overall, the results suggest that caution should be used in assuming that pay-for-performance will necessarily change physician behavior.

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