Pay for Quality

KCE Reports 118 Pay for Quality 97
6.2.2.2 The United States
For decades, the US is characterized by many different P4Q schemes, using many
different initiators (a more extensive description can be found in chapter 4)
Consequently P4Q schemes are largely adopted by one payer at a time, although there
are several regional multi-payer initiatives. The P4Q concept became popular around
the time that the Institute of Medicine released its report ‘Crossing the quality chasm’
that indicated much underuse of Evidence Based Care and in which it was stated that
payment systems should recognize quality. Large employers, which are the most
important purchasers of private health insurance in the US, found the concept op P4Q
appealing. Companies like General Electric and IBM have followed high-reliability
manufacturing principles and supply chain principles in their own businesses and they
are frequently trying to apply these principles to health care purchasing. Around 2000-
2001 some big employers were organizing public reporting initiatives (the leapfrog
Group) and others began to get interested in Pay for Quality programmes. Although
some health insurance plans picked it up on their own, P4Q implementation in the US
would not have happened without the support of the employers.
Many of the P4Q experiments in the US were performed in the private sector.
Nowadays, more than half of managed care insurers, HMOs and PPOs are currently
using P4Q schemes. Most state Medicaid programmes are also using P4Q schemes.
Medicare, which is the most important payer in the US, has had a P4Q programme for
hospitals, named the Premier demonstration project, based on which experience
Medicare has the intention to launch a permanent P4Q hospital programme. According
to the US experts there is an extremely weak P4Q programme for physicians, involving
voluntary submission of quality data within Medicare.
According to US experts there is a link between P4Q and managed care in the US. In
some places where managed care was never important, there is much less of an effort
by payers to have any determination over what kind of health care services are
delivered. Consequently P4Q schemes haven’t been implemented that much in these
places.
Currently there are more than 100 physician targeted programmes and about 40
hospital targeted programmes, most of them run by private health plans. Providers have
multiple payers, each with their own P4Q schemes. This fragmentation makes it fuzzy
for physicians to distinguish the quality indicators for each P4Q scheme and to modify
behaviour accordingly.
In some metropolitan areas that have been dominated by managed care, new initiatives
tried to align different P4Q schemes by different payers in one scheme, as for example
in the Integrated Healthcare Association f (IHA) in California. The IHA has taken a lead
in coordinating a P4Q programme with the attempt to line up all care, measuring the
same thing and rewarding physicians and hospitals more or less in the same way. This
has led to a uniform P4Q scheme with only one set of indicators despite all the
different payers. 237 The programme is starting to expand the set of measures, not only
including effectiveness measures but also efficiency measures.
It must be noted that P4Q is only a part of all the activities that are being used in the US
to ‘buy on the basis of quality’. One of the other activities is ‘tiering’, in which patients
have to pay less for healthcare delivered by high quality and efficient providers and they
have to pay more for healthcare delivered by low quality and inefficient providers.
Likewise some health insurance plans offer ‘narrow networks’: instead of contracting
with every physician, purchasers contract with a smaller set of physicians who have
demonstrated better performance.
f For more information see the following link http://www.iha.org/