3 steps to quality pay for physicians

With physician compensation increasingly based on more than the number of patients treated, how can doctors ensure they hit quality targets and get paid fairly?

By — Posted July 23, 2012

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Physicians, both employed and independent, need to take steps to ensure they are receiving the appropriate share of pay-for-performance or value-based purchasing bonuses, medical consultants say.

Whether the quality pay program is from a health system, insurer, accountable care organization, patient-centered medical home or some other model, physicians need to understand what metrics they have to meet. In addition, doctors need to determine how to meet them and ensure they have the tools to do so.

Several surveys by health care consulting firms suggest that the days of most employed physicians earning a straight salary and independent ones being paid strictly on volume appear to be ending. A survey of 182 health care organizations by the international business consultancy Hay Group released Oct. 17, 2011, found that 66% incorporated quality measures into incentive programs for physicians.

Another study of 424 health care organizations by consultants Sullivan, Cotter and Associates released Jan. 10 found that 72% linked a portion of pay to quality.

The metrics used, how many there are and how much can be earned vary widely. For staff physicians, quality incentive programs primarily will be worked out with their employer. Independent physicians may work with initiatives from several payers.

Know what’s being measured

“Physicians need to push to get details in order to understand how their individual decisions affect the metric,” said Angela Bakker Lee, PhD, managing principal for health care providers with ZS Associates in Philadelphia. “If it’s not clear, you have got to ask.”

Information about the quality program should be provided by the sponsoring entity. Key questions for physicians: Will the assessment of the practice or the physician be based on insurance claims data or an audit of medical records? Will the practice be judged on improvement or whether it hits a particular target? Will a bonus be received only if the full target is met, or is there some prorating for lesser achievements? What will a health system or insurer provide to make it more likely that a physician can achieve the metric? Is it a reasonable target? Health care consultants say goals shouldn’t be too easy, but they should be possible.

“It’s important that the goal be attached to a measure that is realistic but be a stretch,” said James Otto, a senior principal with Hay Group.

Such programs tend to be non-negotiable by physicians, although independent doctors usually have an option not to participate.

Although the programs may not be negotiable, physicians can decide how to take advantage of them. Experts say physicians may find themselves juggling more than one set of measures. The recommendation is to analyze which are most worth the effort and focus on no more than three to five at a time. Measures should be relevant to the practice. For instance, a practice is unlikely to gain much from working with quality markers related to COPD if the practice has very few patients with the condition. When the program is just beginning, the targets should be fairly easy to hit.

“Early successes can be very motivating,” said Jeff Wasserman, vice president of strategy for Culbert Healthcare Solutions, a health care consulting firm in Boston.

Figure out how to get there

Once the quality measures have been identified and prioritized, the next question is how to meet them. In most situations, payers or health systems will tell a physician where they want clinical care quality to go, but it is usually up to him or her and other members of the care team to decide how to get there.

But you can’t know where you’re going if you don’t know where you’ve been. The organization sponsoring the quality program should provide baseline data. This usually takes about a year to collect from the practice and should help identify whether achieving a particular measure is feasible.

“They have to know where they are in order to know if something is attainable,” said Jeffrey Milburn, an independent consultant with the MGMA Health Care Consulting Group. “If they are supposed to get to 85% compliance and they are currently running at 30%, maybe that’s not a reasonable level.”

Medical consultants say doctors need to work with others at the practice to determine how a metric can be achieved. Is there something about how a physician works that needs to be changed? Does it need to be easier for patients to arrange care with other appropriate health professionals? Do staffers with specific characteristics need to be brought on board?

“Your goal should be to try to get the metric to be part of the workflow,” said Todd Shuman, MD, director of quality at Roper St. Francis Healthcare, a 657-bed system in Charleston, S.C.

For instance, if the metric is focused on colorectal cancer screening, does there need to be a reminder in the charts of patients of a certain age that this issue needs to be discussed during a visit? Or does the medical practice need a system for setting appointments for appropriate patients to have this screening? Or is that the job of the larger medical system, if a practice is attached to one?

“Sometimes, the practice needs to make the appointment for the patient,” Milburn said. “Sometimes it’s up to the group or the facility. The doctors have got to be involved and understand who’s doing what and how to implement the program.”

Make sure you have the tools

This next step may mean bringing in additional staff such as a case manager or allowing another entity to place personnel in your office. For instance, the third annual Healthcare Case Management e-survey of 153 hospital, insurance, physician and other health care organizations released May 14 by the Healthcare Intelligence Network found that 90% used embedded case managers in 2012. An embedded case manager may be provided by a health system or an insurer. Or a practice may be given money to hire its own.

Even without additional staff, physicians need to get buy-in from others at the practice. Quality bonuses of employed physicians are usually dependent not only on their performance but also on that of the department and the institution. Independent physicians may find that meeting various quality metrics requires cooperation from other staff. This could mean devising a performance program for them as well.

“Doing well on quality measures is a team sport,” said Brent Asplin, MD, president of Fairview Medical Group in Minneapolis, which in April 2011 shifted compensation for its 500 employed physicians to a model that bases about 40% of the total on quality measures. “It takes everyone working towards the same goals.”

But the key thing, say most health care consultants, is getting regular data on how the practice is doing. A survey of 4,500 health professionals by ZS Associates released May 14 found that 55% of primary care physicians and 54% of specialists said they did not receive sufficient progress updates. One of the complaints about the Medicare Physician Quality Reporting System program is that data given back to physicians come in so late that it is impossible make changes.

Medical practice consultants say getting data as close to real time as possible helps practices gauge progress and adjust. If that is not doable, weekly or monthly reports may get a practice where it wants to go. A physician’s performance should be compared against that of others in the group or national benchmarks.

“Things improve if we can show data, and the data is believable, and we can benchmark that data against something,” Dr. Shuman said. “Physicians respond to that.”

But the most critical piece of advice is not to ignore the move toward quality pay. The consensus is that this trend is not going away. According to a survey of 204 hospital executives released June 5 by Forbes Insights and sponsored by Allscripts Healthcare Solutions, 73% agreed completely or somewhat that physicians needed to shift from volume to value immediately. Thirty-nine percent expected a quarter of total revenue to be linked to value-based purchasing within five years. Seventeen percent said it would comprise half of revenue. So if a quality program is not available in a medical practice’s area, consultants suggest devising one in-house to be prepared for those that emerge in the future.

“If you want to have some control over your destiny, start getting together with your staff to figure out the most important metrics,” Wasserman said. “Develop some of your own benchmarks. When you have the data to demonstrate what you can do, start approaching the payers. Be a little more proactive, and tell them why these are the important things in your area.”

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New factor in physician compensation

Linking some proportion of physician pay to quality is an increasingly frequent feature of compensation plans, according to an annual survey by the international business consultancy Hay Group. The percentage including quality as well as patient satisfaction in the physician compensation structure, broken down by year:

Measure 2010 2011
Patient satisfaction 43% 62%
Quality 46% 66%

Source: Hay Group’s 2011 and 2010 Physician Compensation Surveys

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What is the PCPI?

Quality measures come from a variety of organizations, including the American Medical Association, which launched the Physician Consortium for Performance Improvement in 2000. The program has:

  • 170 member societies helping develop performance metrics
  • 46 clinical areas
  • 280 individual measures
  • 20 measures that were incorporated into stage 1 of the Centers for Medicare & Medicaid Services’ meaningful use incentive initiative for practices using electronic health records
  • 141 measures that have become part of the CMS Physician Quality Reporting System

Source: "PCPI and PCPI-Approved Quality Measures," American Medical Association (link)

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External links

“Getting From Volume to Value in Health Care: Balancing Challenges & Opportunities,” Forbes Insights, June, registration required (link)

American Medical Association on increasing physician’s performance improvement (link)

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