Pay-for-performance: Right rules reward quality

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.