Quest for a quality bonus: How best to position yourself for a benefit

These programs are here. Preparing to encounter them will take some effort, but it also could lead to rewards.

By Mike Norbut — Posted June 7, 2004

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The catchphrases are popping up like weeds these days. Pay for performance, quality bonus initiative and incentive pay plan are the most common terms being used to refer to what many consider to be the latest trend in medicine.

The words have different meanings to different doctors, of course. For some, the terms have little value because programs aren't offered in their area, or the work required to qualify for a bonus is too cumbersome. Others believe in the ideas and are working to capitalize on the money being floated by health plans and employers alike.

Whether you're skeptical or optimistic, however, consultants and other experts suggest you start preparing for the arrival of these programs, which are growing in popularity. Not only can you stand to gain financially by having proof of your performance when health plans come looking for information, but you also might be able to improve the efficiency of your practice in the process.

"Physicians need to get ahead of the curve. They've been reactive for too long," said Joe Mack, vice president for Aon Healthcare Alliance in its Irvine, Calif., office. "The reality is, physicians need to be proactive, so they don't get bogged down in one plan or initiative."

Last year, 40 entities, including health plans, employer coalitions, and the Centers for Medicare & Medicaid Services, had fledgling pay-for-performance programs, and that number is expected to grow to 80 in 2006, according to research by Med-Vantage Inc., a San Francisco-based consulting and market research firm that focuses on quality bonus initiatives.

The Center for Studying Health System Change, a Washington, D.C.-based policy research organization, recently released a report on quality bonus initiatives, finding that programs were available in seven of 12 communities studied.

Among the higher profile programs across the country is the aptly named "Pay for Performance" initiative, which is run by the Integrated Healthcare Assn. and involves six of California's largest health plans. The plans, which developed a common set of measurements, have pledged to give participating physician groups more than $100 million for quality care.

Another program, called Bridges to Excellence, is an employer-sponsored quality bonus model that pays physicians in a few pilot cities on a per-patient basis for meeting standards for quality diabetes care, cardiac care, and for installing technology upgrades that help reduce errors and improve quality. CMS, meanwhile, has developed quality bonus pilot programs for physicians and is using measurement subsets created by the AMA's Physician Consortium for Performance Improvement as the foundation of its initiative to encourage the adoption of technology and electronic medical record systems.

"It's not just a trend, it's an avalanche," said Geoffrey Baker, president of Med-Vantage.

Collecting data

And physicians would be wise to start planning for the continuing development of these ideas, consultants said. The keys, of course, are knowing what to measure and collecting the useful data. Getting ahead of the payers also is important, so the discussion about what measurements to use can be more of a negotiation than a mandate.

While many payers tend to use claims-based data to make judgments, physicians generally prefer to focus on evidence-based guidelines. If they can prove efficiency and quality care achievements with their own measurements, they might be able to convince a plan to do it their way.

"Once you take away the variabilities and duplication, it's automatic that it would help improve the bottom line," said Sukumar Ethirajan, MD, an oncologist in Overland Park, Kan., and president of the Metropolitan Medical Society of Greater Kansas City. "Health plans, without faulting them, cause too much variability in medicine. Evidence-based guidelines are 95% conformity."

At some point, if one hasn't already, a health plan you contract with likely will introduce a quality bonus initiative based on its own set of measurements, or it will simply create a scorecard based on data for your practice. If you haven't started collecting information, you will be forced to scramble to supply it, with the penalties for incomplete information ranging from missing out on a bonus to receiving a poor grade, which could affect future revenues and patient flow.

Of course, as one health plan in a region starts a program, competing initiatives are sure to follow, and each one will likely differ enough to drive doctors crazy. Physicians who have the technology available to track vital data and prospectively gather their own information can "tell their own story," Mack said, rather than try to respond to each plan individually.

"It may be anecdotal today, and it may not serve a purpose now, but at some point, you may be able to say to CMS, 'We do this well,' " said John Edelston, president of HealthPro Associates Inc., a consulting firm based in Westlake Village, Calif. "I encourage groups to start collecting and learn more about what data elements are necessary."

Simply collecting data doesn't necessarily mean it will have an effect on your negotiations, however. Robert Kopelman, MD, a nephrologist in Bakersfield, Calif., said the dialysis center owned by his six-physician group started collecting data on its ability to monitor and maintain vascular accesses before the veins failed and required repair. The center was able to show a considerable number of procedures it avoided by carefully monitoring the vessels, but when it came time to present the information to a health plan, "I'm not convinced they responded to that," Dr. Kopelman said.

The practice did help the center improve its efficiency, however, and it helped its reputation with patients, he said.

"I think the patients we take care of recognize they're receiving a higher level of care," he said. "That's helped us in our growth of our patient base."

Physicians and consultants alike tout data collection and analysis as a way to help a practice cut costs, but it's also a costly investment for small groups that have limited resources. Bonus plans, meanwhile, are still concentrated mostly on the large-group level, although the next step will be filtering the money down to individual doctors. IHA's initiative, for example, is looking at ways to make part of the bonus formula contingent on group measurement and bonus plans that include individual doctors, said Tom R. Williams, the California group's executive director.

Until ideas like that are widespread, consultants foresee IPAs becoming a more useful tool for smaller groups. The ability to band together might help practices make technology investments and join in quality bonus initiatives.

One physician organization that is looking to capitalize on the pay-for-performance movement is the Kansas City Independent Physicians Assn., which has taken the initiative with technology investment, data collection and a proactive approach to health care. The IPA is vying for Kansas City to be the next site for the Bridges to Excellence program, has initiated discussions with payers and employers regarding a regional report card, and also is working closely with the AMA's physician consortium on quality measurements. The ultimate goal of the IPA's "Clinical Integration Program" is to position members for pay-for-performance reimbursements through a reporting system that eventually will graduate to an electronic medical record system.

Most important, the IPA is taking its quality tracking system directly to employers in an effort to contract directly with them and bypass the health plan.

"We have a strong feeling of getting on the front end of change rather than the back end," said Mike Reardon, president and chief operating officer of the IPA. "I think [physician members] are seeing the programs more as opportunities. They see what's coming around the corner."

Important information

But if you've never collected data before, where do you start? While health plans like to put their own individual stamp on their bonus plans, many stick to the same general preventive measures and satisfaction components, consultants said. For example, the "Pay for Performance" initiative, which six health plans helped develop, gives weight to measurements such as childhood immunizations, breast and cervical cancer screenings, cholesterol management and diabetes control. It, too, has patient satisfaction and technology components.

There is a distinct regional flavor to the IHA program, though, namely a measurement of screening for Chlamydia, which has drawn considerable attention in California. Other regions have different important issues, which could end up in a bonus plan if it's costing an insurer a lot of money.

Consultants warn physicians not to jump at every bonus opportunity that comes along, though. Just because a health plan offers extra money for providing quality care doesn't mean it will be cost-effective for the practice, they said. Groups should analyze the programs, including estimating the cost of collecting the data for each health plan, before deciding which ones will be worth pursuing. An ambitious bonus plan might not be worth as much if members of that health plan make up only a fraction of your patient population, consultants said.

Of course, some plans will be no-brainers. Don Fixler, MD, a family physician in Cincinnati, said he was looking for ways to participate in diabetes education programs when he came across Bridges to Excellence. The application process was time-consuming, but he now receives extra money for providing the same care.

"They're promoting the standard of care for diabetes," Dr. Fixler said. "If you're already doing it, it solidifies what you're doing. If you're not, it gives you direction."

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Measure performance

The Integrated Healthcare Assn.'s "Pay for Performance" initiative is a work in process, with health plans constantly tweaking the measurements that will dictate what physician groups have to do to earn a bonus check. Measurements for 2004 include:

Clinical (40% of total score)

  • Asthma management -- appropriate use of medication
  • Breast cancer screening
  • Cervical cancer screening
  • Childhood immunization status
  • Chlamydia screening
  • Cholesterol management -- LDL screening and control
  • Diabetes management -- HbA1c screening and control

Patient satisfaction (40% of total score)

  • Doctor-patient communication
  • Overall ratings of care
  • Specialty care
  • Timely access to care

IT investment (20% of total score)

  • Clinical decision support at point of care
  • Clinical electronic data set integration at group level

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