Pay-for-performance: Right rules reward quality

New AMA guidelines aim to make sure such programs keep their focus on patient care.

Posted April 11, 2005.

Print  |   Email  |   Respond  |   Reprints  |   Like Facebook  |   Share Twitter  |   Tweet Linkedin

Pay-for-performance seems to be all the rage these days. Medicare is testing it out. Some congressional lawmakers are interested in the concept. More and more private health plans and business coalitions are expected to give it a try this year.

These initiatives, which give physicians financial incentives to improve performance, hold the potential to do great good. If done properly, they can enhance the quality of care and patient safety. But if done poorly, they actually hurt patient care and damage the patient-physician relationship.

Already some efforts are raising red flags. One example is UnitedHealthcare's new tiered physician network program, which shares many commonalities with pay-for-performance. It encourages patients to see physicians the insurer deems to be cost efficient and high quality by charging more to see doctors who aren't on that list.

The problem, according to several medical societies, including the American Medical Association, is that the system is really based on cost, not quality.

So physicians have good reason to give a deep, hard look at any initiative purported to enhance performance. They must be able to weigh in knowledgeably on the budding trend if it sprouts in their communities and make an educated decision about whether to participate personally.

Now they have a tool to help. In March, the AMA unveiled new principles and guidelines that the Association and doctors can use to evaluate whether a pay-for-performance program is fair and ethical.

The package has five parts. They call for all such initiatives to:

  • Ensure quality of care. This must be the program's most important mission. To ensure that is the case, evidence-based quality-of-care measures, created by physicians across appropriate specialties, must be used. Variations in patient care must be allowed based on the treating physician's judgment and should not affect program rewards.
  • Foster the patient-physician relationship. Programs must not pose obstacles to treating patients based on their health conditions, ethnicity, economic circumstances, demographics or treatment compliance.
  • Offer voluntary physician participation. Doctors must not be forced to take part, and the programs must not undermine the economic viability of practices that do not join. The initiatives must support participation by physicians in all practice settings by minimizing potential financial and technological barriers.
  • Use accurate and fair reporting. Accurate data and scientifically valid analytical methods must be used. Physicians must be allowed to review, comment on and appeal the results before their use.
  • Provide fair and equitable incentives. Programs must rely on new funds. They should reward physicians, rather than punish them. Incentives should be provided for implementation of information technology. Programs should reward all participating physicians who meet the goals.

As pay-for-performance catches on, the physician community has the opportunity to help shape its direction. Doctors want to make sure the top priority is improving patients' well-being, not insurers' bottom lines. Use of the AMA's principles and guidelines would ensure that this focus doesn't waver.

Back to top

External links

American Medical Association on pay-for-performance (link)

Back to top



Read story

Confronting bias against obese patients

Medical educators are starting to raise awareness about how weight-related stigma can impair patient-physician communication and the treatment of obesity. Read story

Read story


American Medical News is ceasing publication after 55 years of serving physicians by keeping them informed of their rapidly changing profession. Read story

Read story

Policing medical practice employees after work

Doctors can try to regulate staff actions outside the office, but they must watch what they try to stamp out and how they do it. Read story

Read story

Diabetes prevention: Set on a course for lifestyle change

The YMCA's evidence-based program is helping prediabetic patients eat right, get active and lose weight. Read story

Read story

Medicaid's muddled preventive care picture

The health system reform law promises no-cost coverage of a lengthy list of screenings and other prevention services, but some beneficiaries still might miss out. Read story

Read story

How to get tax breaks for your medical practice

Federal, state and local governments offer doctors incentives because practices are recognized as economic engines. But physicians must know how and where to find them. Read story

Read story

Advance pay ACOs: A down payment on Medicare's future

Accountable care organizations that pay doctors up-front bring practice improvements, but it's unclear yet if program actuaries will see a return on investment. Read story

Read story

Physician liability: Your team, your legal risk

When health care team members drop the ball, it's often doctors who end up in court. How can physicians improve such care and avoid risks? Read story

  • Stay informed
  • Twitter
  • Facebook
  • RSS
  • LinkedIn