Should Incentive Payments Be Pernicious?

Pay-for-performance payment model – healthcare payment systems that offer financial rewards to providers who achieve, improve or excel their performance on specified quality of care and cost measures (HealthCare Incentives Improvement Institute, N.D.)

First implemented in 1985 by Aetna (previously U.S. Healthcare), P4P programs were used to reward top performers and improve outcomes (Bruno, 2012). The incentives were meant to improve the quality of patient care by basing incentives on patient outcomes. Conversely, fee-for-service reimbursements are based on the treatments and set limits on the amount reimbursed for services. Because of these limits, incentives for use of pharmaceuticals and non-invasive procedures can impact how physicians practice.

It is commonly believed that the method of physician remunerations affects their professional behavior. As a result, payment systems are therefore manipulated in attempts to achieve policy objectives with the primary aim to improve quality of care, contain cost and maintain recruitment of human resources in underserved areas. (2,1)

In today’s seemingly ever-changing world of healthcare regulation, medical professionals are burdened with many compliance requirements. On October 14, 2016, the Department of Health and Human Services released its final rule implementing the Quality Payment Program as part of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). Starting January 1, 2017, clinicians who are reimbursed by the Centers for Medicare and Medicaid Services(CMS) are required to participate in the Quality Payment Program (QPP). (Centers for Medicare & Medicaid Services, 2016) The QPP replaced the Sustainable Growth Rate formula with the new payment structure in which clinicians are rewarded for delivering high quality care. There are now two pathways for

Championing a cause is a beautiful way for ordinary citizens to be involved in political activism. The modern party activist is more likely to be driven by purposive incentives than ever. This switch away from material and social incentives, driven by an increased awareness of social issues, has allowed party lines to blur in a way that has improved America's political sphere, and has allowed the increased participation of citizens in the democratic process.

These mandates also require that some establishments provide customers with a good outcome and experience while at their facilities. There are also incentives provided to doctors who correctly diagnose their patients for the very first time reducing the rates of readmission this also applied to those that provided outstanding follow up care for patients “The new law provides incentives for physicians to join together to form “Accountable Care Organizations.” These groups allow doctors to better coordinate patient care and improve the quality, help prevent disease and illness and reduce unnecessary hospital admissions. If Accountable Care Organizations provide high quality care and reduce costs to the health care system, they can keep some of the money that they have helped save. Effective January 1, 2012” ( HHS>GOV).

For anyone who has kept up with the news, the US healthcare system has undergone major changes in recent years. Insurance providers are no longer able to deny someone coverage based on pre-existing conditions. The advent of healthcare marketplaces has changed the way people purchase health insurance. Children can stay on their parents' health insurance plans until 26. Leading the healthcare revolution is InnovaCare Health. This organization is a leading provider of Medicaid and Medicare Advantage plans. InnovaCare Health recently announced it would partner with the Health Care Payment Learning and Action Network. This is a significant private-public partnership that seeks to change compensation models to reflect the quality of care instead of quantity. This new partnership reflects InnovaCare Health's to affect change in compensation sooner rather than later. The current healthcare model focuses on reimbursing physicians based on the number of patients seen or procedures performed. This encourages "treadmill medicine," or a model that focuses on rapid turnover. This can often lead to detrimental effects on patient health. The new quality model would reward physicians based on practice targets. Potential goals include HbA1c goals for patients with diabetes, the percentage of patients who smoke, and hospital stay after surgical procedures.

In recent years, emphasis has been placed on improving the quality of health care services and the overall patient experience. Innovative measures are needed to meet these expectations, while also containing the rising costs of health care. The government has enacted new laws in attempts to provide incentives that base Medicare payments in part on quality. In fact, the Patient Protection and Affordable Care Act of 2010, requires the implementation of value-based purchasing (VBP), which bases Medicare reimbursement rates on the quality of care (Kennedy, Wetzel & Wright, 2013). Hospitals may experience a decrease in revenue initially, however, it is theorized that the increase of transparency and accountability will serve as an incentive for improvements in the overall quality of care provided in the United States.

Value-Based Payments (VBP) is a tactic utilized by purchasers to encourage quality and the value of health care services (Health Care Incentives, 2017). Value-Based Payments offer financial incentives to doctors, hospitals, medical groups, and health care providers (Webb, 2015). The incentive is to provide better care for their patients and to focus on the quality of the care they are providing rather than the number of people they treat. This payment model is being used as a way to keep DSRIP sustainable (NYSDOH, 2015). The VBP Model offers a roadmap, which outlines a five year plan to attaining inclusive payment reform; which includes a shift to 80% VBP through Medicaid managed care plans (The Commonwealth Fund, 2017). This payment reform should be accomplished by the end of DSRIP enactment period of five years (The Commonwealth Fund, 2017).

First is that in pay-for-performance programs like value-based purchasing, healthcare facilities pick to serve the healthiest patients, while transferring sicker patients to other hospitals so they can more easily meet quality outcomes (Chen, Chung, Lin & Lia, 2010). This could make it harder for many of the sickest patients to find care. To address of this, quality measures should be created that keep the initial risk of the patient in mind so that the hospital isn’t punished for treating sicker patients. Another unintended consequence is physician frustration for the program due to noncompliant patients. It’s been shown that when instituting a pay-for-performance payment model, physicians become increasing agitated when noncompliant patients prevent them from reaching quality measure goals (McDonald & Roland, 2009). Again, to remedy this situation the quality measures should be made to not punish providers for outcome results that are out of their control. For example, non compliant patients could be noted and their health outcome could count less towards the overall quality score. Finally, an interesting result from the implementation of this provision is that there are mixed reviews on its effectiveness in increasing quality of care (Spaulding, Zhao & Haley, 2014). My response to this result is that it takes time for hospitals to change focus from quantity to

The predominant system of payment to healthcare service providers had been the fee-for-service system for years. This system rewarded the providers for the intensity of their work. However, greater volume of services was not necessarily associated with better service quality. This incentive structure had policy makers concerned and thus, came the pay-for-performance into being established to improve service quality. The use of this system has been expanded by the Patient Protection and Affordable Care Act (PPACA). Many studies were performed to identify ways to make the system more effective. However, the studies had somewhat mixed results.

The concepts of accountable care and triple aim are somewhat similar in nature with an encompassing goal of quality patient care. Accountable care emphasizes the provision of value-driven care that involves improving the patient health outcomes, reducing the amount of chronic illnesses among patients, and reducing the cost of health care within the United States through improved collaboration and coordination (Hacker & Walker, 2013). Similarly, the formulation of the triple aim by the Institute for Healthcare Improvement or IHI addresses three of the main problems facing the US health care system today namely: high cost, low quality, and poor health status (Tanenbaum, 2017). These two approaches dwells on the belief that precisely calibrated financial incentives will produce socially desirable ends (McCarthy, 2015). Their goals are somewhat aligned

The good intentions to improve the quality of health care sparked financial initiatives such as pay for performance and quality bonus payments. These financially influenced methodologies do not come without unintended and ethical consequences.

Financial Incentives in CDHPs: The principle behind CDHPs is that they increase the premium that patients have in their choices about utilization of therapeutic care. Patients who devour medicinal care and exhaust their PHA could be using the resource that they can keep and use their benefit in the future. Contrasted with patients with traditional insurance arrangements, in any event for spending beneath the

Instead of viewing healthcare as an expense, this system will cause Americans to think of healthcare as an investment and evaluate services and costs based on the return on investment. If this system is utilized, management will be forced to pay attention to refining the quality of care delivered to patients along with the timeliness and manner, which will lead to better clinical, quality-of-life, and economic outcomes (Watanabe et al, 2004). In order to try to implement this sort of reimbursement system, the system would need to reward specific behaviors that providers and patient’s display. It would also need to reward behaviors it wants to encourage such as preventative medicine. This system would reimburse providers based on the level of commitment they offer towards the health of individuals and the community.