Practices in low-income areas score lower on pay-for-performance measures

Authors of a new study say the findings highlight why patient socioeconomic data should be a factor in quality pay plans.

By Victoria Stagg Elliott — Posted May 24, 2012

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A study in the May Journal of General Internal Medicine confirmed what many have long suspected: Medical practices in higher socioeconomic areas tend to do better in pay-for-performance programs than those in lower ones.

“Pay-for-performance programs are here to stay, but there is plenty of room for improvement on how these programs are being designed,” said Alyna T. Chien, MD, lead author and assistant professor at Harvard Medical School in Boston.

Authors analyzed data on 160 physician organizations with 11,718 practice sites participating in a pay-for-performance program run by the Integrated Healthcare Assn., based in Oakland, Calif. IHA runs the largest nongovernment, multipayer program in the U.S. Participating independent practice associations and medical groups are paid for achieving measures of clinical quality and the patient experience as well as using information technology and registries. Socioeconomic status of a practice’s location is not a factor in the program, which paid out $45 million to physician organizations in 2011 for quality measures met in 2010.

Physician organizations in the study had an average IHA pay-for-performance score of 69, but the lowest socioeconomic areas had a mean of 62. Those in the highest-ranked socioeconomic areas averaged 76 (link).

“In general, pay-for-performance programs haven’t taken into account where the practices are located and what kind of resources they may have in that area,” Dr. Chien said.

Researchers believe that practices in poorer areas treat patients with less education who may have a harder time following a physician’s recommendations. In addition, the areas may not have conveniently located specialists, pharmacies, laboratories and imaging facilities.

The authors suggest taking socioeconomic status into account to reduce the risk that these programs would reduce the gap between practices in rich and poor areas. In addition, studying those practices in lower socioeconomic areas able to meet quality measures despite this handicap may indicate courses of action for medical practices. Four of the 32 physician organizations in the lowest socioeconomic quintile were in the highest pay-for-performance ranking.

IHA’s pay-for-performance program does not formally account for socioeconomic status, and there are no plans to do so. The program does, however, take into account how much a practice has improved, which may allow those in lower-income areas to better meet performance measures, said Dolores Yanagihara, MPH, one of the study’s co-authors and director of IHA’s pay-for-performance program.

The challenge with taking socioeconomic status into account for pay-for-performance “is that there is no standard or industry-accepted way to do this,” she said. “Considerable work has been done on adjusting for other things, like differences in age, gender, health status and case mix, so there are standard methods for these types of adjustments. However, not nearly as much work has been done on the impact of socioeconomic status on quality performance. Studies like this one and others are pointing to a need for this, which will hopefully prompt more work in this area.”

Pay for achieving quality markers or other benchmarks is an increasingly common factor in physician compensation. Sixty-four percent of the 182 health care organizations surveyed by the Hay Group, a management consulting firm based in Philadelphia, offered an annual incentive plan to physicians, according to data released Oct. 17, 2011.

Of organizations offering such a compensation arrangement, 66% incorporated quality measures. Sixty-two percent used patient satisfaction, and 52% relied on group performance. Quality metrics also are a key part of accountable care organizations.

American Medical Association policy states that fair and ethical pay-for-performance programs support the patient-physician relationship and overcome obstacles to care regardless of health status, ethnicity, economic circumstances, demographics or treatment compliance patterns. Physician participation should be voluntary.

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