Managed Care


Minimal improvement in quality seen in P4P

MANAGED CARE November 2005. © MediMedia USA
Compensation Monitor

Minimal improvement in quality seen in P4P

MANAGED CARE November 2005. ©MediMedia USA

Paying clinicians to reach a fixed performance target might produce little gain in quality, according to a study in the Journal of the American Medical Association.

Physician group quality reports were evaluated by PacifiCare Health Systems for its California and Pacific Northwest (Oregon and Washington) networks. Three measures of clinical quality were compared — cervical cancer screening, mammography, and hemoglobin A1c testing.

The only statistically significant improvement seen was in cervical cancer screening. The California network improved by 3.6 percentage points more than the Pacific Northwest network.

Groups with low baseline scores improved the most; groups with high scores improved the least. Groups that started out with high standards understood that they only needed to maintain the status quo to receive the bonus payments. The authors speculated that financial rewards for quality were too low to motivate substantial departures from the underlying trend in quality improvement.

Percentage point improvement in quality

Bonuses paid in first year ($0.23 PMPM for each performance target met)

Group 1: Physician groups with baseline performance at or above the target

Group 2: Physician groups with baseline performance below but within 10 percent of the target

Group 3: Physician groups with baseline performance more than 10 percent below the target measure

Source: Rosenthal MB, et al. Early experience with pay-for-performance. From concept to practice. JAMA. 2005;294(14):1788–1793.


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