California doctors to see higher pay-for-performance pay

California physicians are expected to share $70 million to $80 million in bonus payments from their participation in a private pay-for-performance plan.

Although the size of the payout hasn't been finalized, it's anticipated to top the $40 million doctors received in 2004 from the Integrated Healthcare Assn.'s pay-for-performance program, said Ronald Bangasser, MD, a family physician who is on IHA's board of directors and is a past president of the California Medical Assn.

The key reasons for the expected payment increase are that there were more clinical performance measures, and that participating physicians improved upon their first-year performance, Dr. Bangasser said.

Under the 2½-year-old program, seven of the country's largest health plans have pledged to pay tens of millions of dollars in annual bonuses to physicians who meet certain clinical, patient satisfaction and information technology criteria. IHA has forwarded the report to the insurers, who use it to determine how much they will pay some 35,000 physicians in 225 medical groups.

The flow of payments was expected to start as early as late July, said Tom Williams, executive director of IHA, Walnut Creek, Calif., which runs the pay-for-performance program.

On the clinical side, doctors performed well across all 14 clinical measures revolving around childhood immunization, cervical and breast cancer screenings, and asthma, diabetes and cholesterol management.

While the rate of improvement varied from measure to measure, some were more statistically significant than others, meaning that those results weren't likely due to chance, said Linda Shelton, an assistant vice president at the National Committee for Quality Assurance, Washington D.C., which collected and analyzed the data for the report. Those areas included cervical cancer, asthma and diabetes care, she said.

More groups meeting criteria

In 2004, the calendar year studied for the 2005 payouts, 119 out of the 225 medical groups received partial or full credit for meeting the technology component, compared with 74 out of 215 medical groups in 2003. A big reason for the overall jump is that the information technology component counts for 20% of a doctor's score, up from 10%, Shelton said. "Twenty percent is a lot. That's enough to get people's attention."

The clinical and physician satisfaction components each count for 40% of doctors' scores.

To meet the technology component criteria, physicians had to demonstrate ability to integrate data from multiple electronic sources, use certain technologies at the point of care or both, Shelton said. Point-of-care technologies included writing prescriptions, checking drug interactions and retrieving laboratory results electronically.

Although IHA can't claim at this time that the clinical improvement is directly tied to use of information technology, "we did see a correlation between those who scored well on information technology and those that did well clinically, both in year one and year two," Williams said.

He added that the Rand Corp., a Santa Monica, Calif., think tank, and the University of California Berkeley are conducting a multiyear evaluation of the program that will address that issue, among other things.

So far, the CMA is pleased with the success of the program but at the same time wants to ensure that every physician in California is able to participate in pay-for-performance, particularly those in solo and small practices, Dr. Bangasser said.

While some of those doctors are probably participating in the IHA program through independent practice associations, most physicians are from large groups, he said.