The Importance Of Pay For Performance In Healthcare

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.

Another reimbursement is the Pay-for-performance model where the providers are only paid when they are able to achieve a specific goal. “Insurers pay providers an “extra” amount if certain standards, usually related to the quality of care, are met”(Gapenski, 2013, p.69) The

According to the AMA, “fair and ethical PFP programs are committed to improved patient care as their most important mission. Evidence-based quality of care measures, created by physicians across appropriate specialties, is the measures used in the programs” (AMA 2005). Principals of the

Studies of reimbursement programs show more emphasis on penalties rather than incentives (Roland & Dudley, 2015). The strategic plan of the institution in this paper is to provide optimal patient care at the lowest cost. Executive leadership understands this plan and supports the importance of the pay for performance programs. The communication to all leaders on the pay for performance benefits is extremely beneficial in implementing change related to these projects. When the quality department works to develop new processes associated with pay for performance metrics, staff is more willing to support

Pay for performance is an incentive program. A way to compare is when in sports a player can make more money for doing better or meeting certain goals. So if a pitcher pitches a no-hitter he may receive an additional bonus on top of his salary. Pay for performance concerning health care is looking at not only success rates but overall outcomes. This means Patient A has a surgery she comes through without complications, and she heals quickly, is discharged and when she comes back for a follow-up everything is moving along as the physician plan. This is a good outcome. Now if the same patient, acquires an infection,does not heal in a reasonable amount of time or dies then the outcome is not favorable and pay for performance is affected. because pay for performance is difficult to measure in long term situations many times, the outcomes are measured in sections such as various components that create a patient’s overall health rating. for instance, Patient B is 300 lbs suffers from high blood pressure, high cholesterol, and diabetes pay for performance would look at each component and see if the health services being provided are aiding in the betterment of the patients health. At the core pay for performance is more about accountability, keeping medical professionals abreast of what is really going on with patients regardless of income or background.

The goal is pay for performance programs is to reward high performing employees and encourage them to continue the good work.

Value-Based Purchasing System was created and implemented by the Center for Medicare and Medicaid Services to link Medicare payment to value based systems to improve quality of care provided to patients in an inpatient or outpatient setting. Value-Based Purchasing Systems reward excellence in measuring and reporting in excellent health care delivery to patients. An effective Value-Based Purchasing System is an external motivator for providers to re-engineer the way health care delivery is approached. Healthcare facilities that adopt a Value-Based Purchasing System and score high and maintain a high score can benefit from incentive payments. The Center for Medicare and Medicaid scores hospitals on Achievement Points, Improvement Points, and

Health care in the U.S is among the highest in the world, with a combination of public and private insurance. For decades the cost of health care has been on the rise and will continue to rise. In response to wide variation in quality and outcomes as well as escalating health care costs, the U.S health care system is moving away from a volume-based payment system to a quality-and value-based system (Srinivasan & Desai, 2017). Through the constant and rapid changes in healthcare, many payers are requesting providers to shift from volume-based care, which is a fee for service to a value-based reimbursement structure. Value-based reimbursement measures the value of reforming payment so that payment reflects the value of care. Value-based

Unlike the traditional fee-for-service model which paid providers for the volume and complexity of care provided or the lump-sum model which paid based on a disease process and the given set of services expected, value driven health care follows a pay-for-performance system. Pay-for-performance covers a group of policies designed to promote improvement in quality, effectiveness and the overall value of healthcare. This is done through provision of incentives or bonuses, if you will, for meeting or exceeding mandated quality and performance measures (James, 2012).

Research studies on the incentive systems for health care providers, have been suggesting that providers who care for disadvantaged patient populations tend to perform less well on the quality measures that are commonly used in pay-for-performance programs. This leads to the redistribution of the much needed resources away from the providers who need it the most. They may also widen the gap in resources with providers who care for disadvantaged patients and the ones who do not, and also lead to providers altogether avoiding the disadvantaged patients as they may worsen their performance scores, under the current framework of the pay-for performance scheme.

This article gives background information on MACRA, which was one of the first steps in overhauling the physician payment system. It focused mainly on several payment models that were voluntary for physicians, a pay for performance model and advanced alternative payment. Through CMS this law attempted to achieve better quality care and to not incur unnecessary costs and was aimed to provide a greater alternative to the Sustainable Growth Rate System. Focuses on how physician groups large and small are strategically planning on how to access each of the models and whether or not physicians will participate in them.

This essay examines developing trends in healthcare delivery in the U.S. Until recently, organizations were paid on the basis of transactions, that is, by visits or by procedures. In some markets, however, new payment models are emerging that, instead, base payments on producing outcomes. This transition will no doubt be complex and challenging.

Pay for performance in healthcare provides financial incentives to clinicians or hospitals in order to improve health outcomes. Clinical outcomes, such as improved survival, are not easy to measure, therefore pay for performance systems usually measure process outcomes.

The principle behind value-based payments is to bring the financial incentives/penalties into parallel with measures of cost, quality, and outcomes in healthcare. Initiatives towards value-based healthcare systems have been growing in recent years. There four main types of value-based payment models, including shared savings, bundles, shared risk, and global capitation (Gerhardt, 2015). The shared savings model uses a reduced fee-for-service payment system that rewards an organization for spending less than a targeted budget with a monetary bonus (equal to a percentage of the amount of savings achieved). In the bundles model, all the payments for a single episode of care (certain illness, time period, hospital visit) are aggregated into a package payment for a group of providers as opposed to the separate payments for each individual provider, hospital, and service. As a reward for reducing expenditure on parts of care provided in a bundle, organizations are able to keep money saved. Next, the shared risk model is similar to the shared savings model but also incorporates the risk of paying a penalty for spending more than the targeted budget. Finally, the global capitation model gives providers full financial responsibility for the care of each individual, as providers are given per-person, per-month payments regardless of services

The Pay-for-performance financial bundle strategy serves the interest of the patient as a private payer, as well as a healthcare organization, because medical staff must perform quality care with less medical error in return for good outcomes. This allows the financial system to rate performance based on outcome, keeping the healthcare organization competitive within the industry, and the patient as the customer, private payer receiving the best of care for their valued