Effective Quality Incentives Remain Elusive

New study results suggest that pay-for-performance may not work sufficiently to incentivize quality improvement among some physicians. The study found that pediatricians in an accountable care organization who received small incentives did improve quality, but not as significantly as doctors employed by a hospital.


The study, published in JAMA Online, focused on quality performance across three physicians groups: community doctors who were offered about $40 per patient to meet targets for well-care visits, immunizations, lead screening and other quality measures, community doctors who received no incentive and a group of doctors employed by a hospital who also were not paid any incentive.


Results showed the following:

  • Doctors employed by the hospital improved quality more significantly on eight measures compared with community doctors who received an incentive.


  • Community doctors who received an incentive did better than community doctors who didn’t receive an incentive on five quality measures.


“The findings underscore the challenge that policymakers and the industry face finding ways to tie payment to performance. Research on how best to design incentives is limited and results are mixed, and other factors—such as introduction of electronic medical records—could also play a role.” (“Incentives for quality a challenge for ACOs,” Modern Healthcare, January 25, 2016)


Non-financial incentives may be effective when used in combination with financial payments. For example, quality improvement support could work in conjunction with quality payments to improve performance. The authors wrote that employed hospital physicians might have benefited from clinical decision support from electronic medical records or other hospital quality-improvement efforts.


“Pay for performance resulted in modest changes in physician performance in a pediatric ACO, but other interventions at the disposal of the ACO may have been even more effective. Further research is required to find methods to enhance quality improvements across large distributed pediatric health systems,” the authors wrote. (“Evaluating a Pay-for-Performance Program for Medicaid Children in an Accountable Care Organization, JAMA Online, January 25, 2016)



And of Interest: Hospitals Welcome Lower Fuel Prices


Fuel in general is one of the single largest expenses for a hospital, according to hospital operations experts. The significant drop in fuel prices means significant savings for hospitals on fuel for their vehicle fleets for deliveries, security and maintenance personnel; and petroleum products for heating systems. Lower petroleum costs also mitigate inflation for medical supplies that use petroleum-based plastic.


The price of natural gas used for heating has also been low over the past couple of months, dropping sharply in mid-December, and trending much lower than usual over the past year.


Hospitals use gas for boilers, which provide heat, or to power electric generator equipment. Nearly all hospitals use steam in some way or another, said a supply chain expert. (“Low gas prices fuel hospital savings,” Modern Healthcare, January 21, 2016)



iProtean subscribers, the advanced Finance course, Integrating Population Health Management into Your Strategic and Financial Plans, Part Two is in your library. This course continues the discussion by experts Marian Jennings, Mark Grube and Nathan Kaufman and covers whether population health management should be a priority for all hospitals/systems, transitioning and success indicators, risks and benefits of partnering for population health initiatives, and the population health hierarchy.



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