Pay-for-performance: It's about cost control, not quality

I am always entranced when intelligent people become mesmerized by an idea that is patently stupid. Nowhere has this phenomenon been more in evidence than in the pay-for-performance (P4P) mania that is absolutely sweeping the nation.

There is so much energy being expended in efforts to rush out these programs that there seems to be none left over for a calm, rational assessment of the whole idea. This is the incarnation of the wonderful children's story, "The Emperor's New Clothes." A delightful charlatan convinced the emperor that the "clothes" that he sold him were invisible to anyone who was unfit for his office or unforgivably stupid. The inevitable result was that nobody wanted to appear stupid or unfit, so they all complimented the naked emperor on his beautiful clothing.

It would appear that this whole thing was enabled by some papers written about the care that patients received from visits to their physicians. These papers were long on sensationalism and short on scientific rigor; however, that's what is tailor-made for today's popular press. The qualifications of the reviewers can be questioned. What is not in question is their underlying bias.

The bottom line of the studies was the widely touted result that in only 50% of cases did the treatment meet the standards that had been preselected by the reviewers. It was then widely reported that the chance of obtaining proper treatment from American physicians was essentially random.

This, of course, is patently ridiculous, and even the most naive can poke innumerable holes in this argument. But this pronouncement was manna from heaven to employers, insurers and government agencies continually looking for any excuse to reduce physician reimbursement.

They all pounced upon these reports and in unison said, "Aha! We refuse to pay for poor quality care." And the concept of "pay for quality" or "P4Q" was born. This effort was short-lived for several reasons, the most significant of which was that nobody ever has been able to come up with an acceptable definition of "quality" health care. Also, physicians are ethically bound to achieve the best quality care possible for their patients. This means that if quality really could be defined, all physicians quickly would comply, and there would be no excuse for reducing payments to any of them.

The result was that the concept of pay for quality was scrapped before any programs were even designed, and "pay-for-performance" was born. Not only was this more alliterative, but performance standards also could be determined by anyone. As a matter of fact, this is exactly what has been going on at a furious pace.

The final touch was the development of "efficiency measures." The purveyors of P4P continue to insist that these programs are all about quality.

I flatly dispute that contention. Efficiency measures are cost-control measures, pure and simple. To even qualify to have your performance measures reviewed, you must first be a very low-cost provider. It would appear that in most P4P programs only those whose charges are in the lowest 15th to 20th percentile qualify.

Of course, you can enter a bidding war to see if you can become one of those "lucky" enough to be in the very low-cost group. That will qualify you to be measured against the insurers' or employers' performance measurers -- at least until someone puts in a bid lower than yours. Anyone who can't see where this ends needs help.

Conscientious physicians, as usual, have tried to make a silk purse out of this sow's ear by developing performance measures that are scientifically based and peer reviewed and that truly measure quality. The AMA-convened consortium consists of volunteer physicians who do in-depth outcomes studies on a wide variety of treatment modalities to establish "best practices."

The preferred treatments are listed as performance measures. Many if not most P4P plans use some consortium measures to add an aura of respectability to their programs. But none use only consortium measures, and all include the efficiency measures that make a mockery of the entire process.

Unfortunately, it is impossible to review all of the fallacies and problems that are associated with P4P, simply because the list is so long. But I'll review just a few.

First, and really most important, is the fact that the underlying assumption that P4P programs will improve care and save precious health care dollars is totally unproven. Furthermore, such an assumption is simply illogical.

Next, let's consider medical ethics, the cornerstone of our profession. The decision by a physician to attempt to qualify for a bonus payment by participating in a P4P program that has been designed by nonphysicians is clearly a business decision. To base a patient's treatment upon a business decision rather than a medical and scientific one is unethical.

Today it is reported that literally hundreds of P4P programs are being rolled out. This means that if a physician decides to participate in P4P plans, when a patient is seen in the office, the specific P4P plan of that patient's employer or insurer first must be determined. To qualify for a bonus payment, the P4P plan then must dictate the treatment.

A busy physician who sees several patients with the same diagnosis, but with different insurers and P4P plans, will find himself prescribing treatments that will be different in each patient. Again, the treatment prescribed has become a financial decision rather than a scientific one. How can anyone defend such a practice?

Another basic principle of P4P is public reporting. This means that whoever devises the P4P program will rate physicians based upon their compliance with that program. It is assumed that only 15% to 20% of physicians ultimately will qualify for a bonus in a specific P4P program.

These physicians, then, will be very publicly reported as preferred, superior, quality or whatever appellation that plan chooses. Furthermore, the insurer will "steer" patients to those physicians by requiring lower co-pays or other inducements.

Again, remember that regardless of the volumes of rhetoric, P4P programs are all about costs, not quality. But the public will be told that the designated physicians are chosen based upon quality. With this being the case, most of the public might believe that quality is actually being measured. Eighty percent to 85% of physicians who contract with an insurer will be reported as not preferred, substandard or whatever.

This is patently absurd. But it gives rise to numerous opportunities for our "friends" in the trial bar. Is there liability for a physician who doesn't notify a patient that he or she is nonpreferred? Is there liability for a physician who refers a patient to a nonpreferred physician? What about the hospital who has physicians who are nonpreferred for a patient's plan but who are on-call in the emergency department? There is no end to the liability mischief that can be caused by this public reporting of highly suspect data.

Remember that hundreds of P4P programs are being rushed out by the Centers for Medicare & Medicaid Services and private insurers. These plans are proposed to cover all specialties. To start a program, some measures can be cobbled together, but what about tomorrow? Are we to assume that an insurer will do a better job of keeping up with the explosive pace of medical progress than our specialty societies do? Of course it can't.

These are just a few problems with P4P that immediately come to mind. I'm certain that you can come up with many more.

It also would appear that an absolute prerequisite for all P4P programs is an electronic medical record. This means that mode of practice will be a decisive factor in qualifying for a P4P bonus. To date, EMRs are almost prohibitively expensive for most solo and small practices, the very practices providing about 60% of medical care today. All automatically will not comply and will be publicly reported as substandard or not preferred.

What a program!

The question I'm repeatedly asked is, "How can they do this to me?"

The answer is simple. You signed a contract with the insurer to become a participating physician. Several years ago, this seemed like a reasonable decision. But today, with sham negotiations, automatic reductions in reimbursement, payment denials, silent PPOs and now P4P with public reporting, signing a contract with anyone seems to be terminally stupid.

I can't for the life of me see why I would sign a contract that allowed me to be treated so shabbily. What do you think?