Pay for Performance
Pay For Performance Jentry Pippin HCS/531 December 24, 2012 Jody Sklar
Pay For Performance Prior to the 2000s, fee-for-service systems dominated how health care providers received payment for providing care to patients. Under the fee-for-service system, physicians received payments, according to the volume of patients and the complexity of services. Two reports written by the Institute of Medicine clearly substantiated serious deficiencies in the quality of health care in the United States. The findings prompted the need to develop initiatives to pay health care workers based on quality. The following discussion defines pay-for-performance, explains the effects of reimbursement under this approach, details the impact of system cost reductions on the quality and efficiency of health care, the effects of this model on health care providers and customers, and the effect pay-for-performance will have on the future of health care. The Definition of Pay for Performance Pay for performance models reward providers, such as physicians, other health care providers, hospitals, and medical groups under contract for meeting pre-established performance measures to improve quality and efficiency in health care delivery. It is popular among policy makers and private and public payers, such as Medicare and Medicaid. The first initiative adopted by one of the nation’s largest health care plans, PacifiCare Health Systems, began paying medical groups in California bonuses for meeting or exceeding 10 clinical and service quality targets in 2003 (Meredith, Richard, Zhonghe, & Arnold, 2005). Service
Pay For Performance Prior to the 2000s, fee-for-service systems dominated how health care providers received payment for providing care to patients. Under the fee-for-service system, physicians received payments, according to the volume of patients and the complexity of services. Two reports written by the Institute of Medicine clearly substantiated serious deficiencies in the quality of health care in the United States. The findings prompted the need to develop initiatives to pay health care workers based on quality. The following discussion defines pay-for-performance, explains the effects of reimbursement under this approach, details the impact of system cost reductions on the quality and efficiency of health care, the effects of this model on health care providers and customers, and the effect pay-for-performance will have on the future of health care. The Definition of Pay for Performance Pay for performance models reward providers, such as physicians, other health care providers, hospitals, and medical groups under contract for meeting pre-established performance measures to improve quality and efficiency in health care delivery. It is popular among policy makers and private and public payers, such as Medicare and Medicaid. The first initiative adopted by one of the nation’s largest health care plans, PacifiCare Health Systems, began paying medical groups in California bonuses for meeting or exceeding 10 clinical and service quality targets in 2003 (Meredith, Richard, Zhonghe, & Arnold, 2005). Service
References: Health Policy Brief: Pay-for-Performance. (2012, October 11). Health Affairs. Retrieved from http://www.healthaffairs.org/healthpolicybriefs/brief.php?brief_id=78 Liang, B. A., & Mackey, T. (2011). Quality and Safety in Medical Care: What Does the Future Hold?. Archives Of Pathology & Laboratory Medicine, 135(11), 1425-1431. doi:10.5858/arpa.2011-0154-OA Meredith, B. R., PhD, Richard, G. F., PhD, Zhonghe, L., MA, & Arnold, M. E., MD, MA. (2005). Early experience with pay-for-performance: From concept to practice. The Journal of the American Medical Association, 294(14), 1788–1793. Retrieved from http://jama.jamanetwork.com/article.aspx?articleid=201673 Shaman, H. (2008). What you need to know about pay for performance. Hfm (Healthcare Financial Management), 62(10), 92-96.